This section establishes the official name of this set of rules, called the "California Financing Law."

This law is about improving and regulating lending practices in California. It aims to ensure borrowers have enough access to credit while making sure the lending laws are clear and modern. It promotes fair competition among lenders, safeguards borrowers from unfair lending practices, and ensures the development of economically sound and fair lending systems. Additionally, it safeguards property owners from dishonest practices that could harm clean energy financing projects. The law applies to consumer loans, commercial loans, and program administrators, outlining which chapters they are subject to. This section became effective on January 1, 2019.

This law section explains that certain types of lenders and brokers in California are considered exempt from particular regulations due to their existing status under the law. These include personal property brokers, consumer finance lenders, and commercial finance lenders who were previously governed by older laws. This exemption will apply even if some parts of the law are found invalid for certain lenders or categories.

This law section says that the definitions provided in this article should be used to interpret this division, unless it’s clearly meant to be understood differently based on the context.

An 'assessment contract' is an agreement between property owners and a public agency where the agency imposes voluntary assessments on the property. These assessments help fund energy efficiency improvements through a PACE program. PACE stands for Property Assessed Clean Energy and involves a financial arrangement for upgrading properties to be more energy-efficient.

This type of contract is temporary and will be repealed after January 1, 2029.

An 'assessment contract' is an agreement between all property owners of a piece of real estate and a public agency. In this deal, property owners agree to a voluntary assessment (extra charge) on their property for the public agency to fund and implement efficiency upgrades, like energy-saving improvements. These upgrades are funded through a PACE assessment or a special tax. This law takes effect on January 1, 2029.

This section defines a 'broker' as anyone who works in the business of arranging or carrying out tasks as a broker specifically related to loans provided by a finance lender.

This law defines the term “Commissioner” as referring specifically to the Commissioner of Financial Protection and Innovation.

This section specifies that several financial and commercial terms, like "security interest," "accounts," and "instruments," are defined according to the Uniform Commercial Code (UCC). This means their definitions in this context match those outlined in the UCC.

This section defines a "Licensee" as any finance lender, broker, or program administrator who is granted a license as outlined in this division. This part of the law went into effect on January 1, 2019.

This section defines the term "person" to include a wide range of entities, not just individuals but also corporations, partnerships, LLCs, joint ventures, associations, joint stock companies, trusts, unincorporated organizations, governments, and political subdivisions of governments.

A "finance lender" is anyone who makes consumer or commercial loans, which basically means lending money to individuals or businesses. This can involve securing the loan with personal property or liens on income, like wages or commissions, even if the borrower keeps using the property.

The law makes it clear that a finance lender also includes someone acting as a personal property broker, according to the California Constitution.

This law states that employees who work at the licensed location of a finance lender, broker, or program administrator are generally not considered finance lenders, brokers, or program administrators themselves. However, when these employees perform their regular job duties, they are exempt from any laws that their employer is exempt from. This has been in effect since January 1, 2019.

This law defines a 'regulatory ceiling provision' as a part of the law that states an original principal loan amount. If the loan amount is at or above this specific amount, certain sections of the law won't apply to that loan.

This section defines key terms related to finance lending and mortgage regulation in California. It includes definitions for a branch office license, depository institution, and federal banking agencies. It also explains terms like the Nationwide Mortgage Licensing System, residential mortgage loan, and the SAFE Act, a federal law concerning mortgage licensing. The section describes what a unique identifier is and defines nontraditional mortgage products as any mortgage that isn't a 30-year fixed rate. Lastly, it clarifies 'expungement' as a legal process to clear a criminal record, with variations for different states.

This law defines a 'mortgage loan originator' as someone who handles or negotiates the terms of residential mortgage loans for compensation. Not everyone involved in mortgage processes is classified as a loan originator; exceptions include those performing administrative tasks, individuals renegotiating existing loans, and those involved in timeshare credits.

A key exemption is for employees of nonprofit organizations that work solely to provide loans on terms beneficial to borrowers. Such nonprofits must register annually and prove they serve public purposes rather than commercial interests. The term also distinguishes 'registered mortgage loan originators' as those employed by specific institutions and registered through a nationwide system.

If you're a loan processor or underwriter who doesn't publicly claim to do the work of a mortgage loan originator, you don't need a separate license as one. This means no advertising or promotional materials suggesting you perform those duties.

If you're working solely in processing or underwriting, stick to those tasks and don't promote yourself as if you handle mortgage loan origination.

Independent contractors, however, must get a mortgage loan originator license to do these jobs for residential mortgages. They also need a unique ID through the Nationwide Mortgage Licensing System.

The term 'PACE assessment' refers to an agreement where a property owner agrees to a special tax or assessment to finance energy-efficient improvements or renewable energy projects on their property. This voluntary arrangement is explained in detail in another part of the law, specifically the Public Resources Code.

The term “PACE program” refers to a program that provides financing for making efficiency improvements on properties, like energy upgrades. This funding is added as an assessment on the property. The program can be set up in one of three ways: under certain provisions of the Streets and Highways Code, through the Mello-Roos Community Facilities Act, or by a charter city using its constitutional powers. These programs are designed to help property owners improve their properties’ energy efficiency without upfront costs.

This section defines who is considered a PACE solicitor and a PACE solicitor agent. A PACE solicitor is someone authorized to encourage a property owner to sign an assessment contract for financing energy efficiency or similar improvements. A PACE solicitor agent works for or with the solicitor in this effort. However, certain individuals are not considered PACE solicitors or agents, including employees of program administrators, people not involved in soliciting these contracts, those doing purely administrative tasks, advertisers with approved content, people gathering applicant information unrelated to advertising, and those soliciting for non-program administrators.

This law defines who qualifies as a 'program administrator' in relation to PACE programs. A program administrator is someone managing a PACE program for a public agency, with their permission, but is not the public agency itself.

However, a person is not considered a program administrator if they do not manage PACE programs that finance efficiency improvements on small residential properties (four or fewer units) or on properties worth less than $1 million.

The term "property owner" refers to all individuals who are officially recognized as owners of a property that is subject to a PACE assessment. PACE stands for Property Assessed Clean Energy, which typically involves a financing program for energy-efficient upgrades.

Efficiency improvement refers to any long-lasting upgrade made to a property that is funded through a PACE assessment.

This law defines what a “public agency” is in the context of a PACE program (Property Assessed Clean Energy program). It includes various local government entities like cities, counties, and different types of districts, as long as they have set up or are taking part in a PACE program and are using a program administrator.