California Financing Law: mortgage trigger lead information.

Plain English Breakdown

The official source material does not provide details on the specific penalties for violations or how financial institutions will implement these new requirements.

California Law on Mortgage Trigger Lead Information

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

What This Bill Does

• Prohibits financial institutions from engaging in unfair, deceptive, or abusive acts related to mortgage trigger lead information.
• Requires financial institutions to clearly disclose at the initial contact that they are not affiliated with the original lender or broker.
• Makes violations of these rules an unlawful business practice and allows enforcement by state officials and local prosecutors.
• Allows consumers who suffer from such practices to sue for damages, court orders, and legal fees.

Who It Names or Affects

• Financial institutions that deal 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.

Unlawful Business Practice

A violation of the rules set by the California Financing Law that can be enforced and punished under state law.

Limits and Unknowns

• The bill does not specify how financial institutions will implement these new requirements.
• It is unclear what specific penalties will apply to violations beyond being an unlawful business practice.

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