California Financing Law: mortgage trigger lead information.

Plain English Breakdown

The official source material does not provide detailed information on the exact nature of damages, injunctive relief, and attorney’s fees that consumers can claim in a private right of action.

California Law on Mortgage Information

The bill prohibits financial institutions from engaging in unfair, deceptive, or abusive acts when using mortgage trigger lead information and requires clear disclosures to consumers.

What This Bill Does

• Prohibits financial institutions from engaging in unfair, deceptive, or abusive acts or practices with mortgage trigger lead information.
• Requires financial institutions to clearly disclose at the initial point of contact that they are not affiliated with the consumer’s original lender or broker.

Who It Names or Affects

• Financial institutions dealing with mortgage trigger lead information
• Consumers seeking real estate-secured loans

Terms To Know

Mortgage Trigger Lead Information

Consumer credit information related to a real estate-secured loan application.

Unfair, Deceptive, or Abusive Acts or Practices (UDAAP)

Actions that are unfair, deceptive, or abusive towards consumers in financial transactions.

Limits and Unknowns

• The bill does not specify the exact penalties for violations.
• It is unclear what specific disclosures must be made by financial institutions beyond the requirement to state they are not affiliated with the original lender or broker.

Official Summary Text

SB 933, as introduced, Seyarto.
California Financing Law: mortgage trigger lead information.
Existing law, the California Financing Law, generally regulates the business of finance lenders and brokers and prohibits any person from engaging in those businesses without obtaining a license from the Commissioner of Financial Protection and Innovation. Existing law also imposes various requirements on licensees who offer or sell commercial loans, as defined. Existing law prohibits a person that receives compensation in connection with a referral of a commercial loan from making a materially false or misleading statement or representation to a borrower about the terms or conditions of a prospective loan or from engaging in various other deceptive and unfair acts. A willful violation of the California Financing Law is a crime, except as specified.
This bill would prohibit a financial institution from engaging in unfair,
deceptive, or abusive acts or practices in the use of mortgage trigger lead information, defined to include certain consumer credit information related to a real estate-secured loan application. The bill would provide that a violation of these provisions occurs if the financial institution takes various acts, including, among others, failing to clearly and conspicuously disclose to the consumer, at the initial point of contact, that the financial institution is not affiliated with the consumer’s original lender or broker. The bill would make a violation of these provisions an unlawful, unfair, or deceptive business practice under specified law. The bill would authorize the Attorney General, the Commissioner of Financial Protection and Innovation, and local prosecutors to enforce this section. The bill also would authorize a consumer who suffers a violation of these provisions to bring a private right of action for damages, injunctive relief, and reasonable attorney’s fees. By expanding the scope of a crime,
the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Current Bill Text

Download Bill PDF