Article 1. Revocation And Suspension Of License of California Financial Code >> Division 9. >> Chapter 4. >> Article 1.
(a) Finance lender and broker licenses issued under this
division shall remain in effect until they are surrendered, revoked,
(b) Mortgage loan originator licenses issued under this division
shall be renewed annually upon the payment of an annual assessment,
and if renewed by the licensee, shall remain in effect until they are
surrendered, revoked, or suspended.
(c) Surrender of a license becomes effective 30 days after receipt
of an application to surrender the license or within a shorter
period of time that the commissioner may determine, unless a
revocation or suspension proceeding is pending when the application
is filed or a proceeding to revoke or suspend or to impose conditions
upon the surrender is instituted within 30 days after the
application is filed. If a proceeding is pending or instituted,
surrender of a license becomes effective at the time and upon the
conditions that the commissioner determines.
For the purpose of discovering violations of this division
or securing information required by him or her in the administration
and enforcement of this division, the commissioner may at any time
investigate the loans and business, and examine the books, accounts,
records, and files used in the business, of every person engaged in
the business of a finance lender or broker, whether the person acts
or claims to act as principal or agent, or under or without the
authority of this division. For the purpose of examination, the
commissioner and his or her representatives shall have free access to
the offices and places of business, books, accounts, papers,
records, files, safes, and vaults of all these persons.
In making any examination or investigation, the commissioner
may, for a reasonable time not to exceed 30 days, take possession of
the books, records, accounts, and other papers pertaining to the
business. The commissioner may place a keeper in exclusive charge and
custody of the books, records, accounts, and other papers in the
office or place where they are usually kept. During possession, no
person shall remove or attempt to remove any of the books, accounts,
papers, records, files, safes, and vaults, or any part thereof,
except in compliance with a court order or written consent of the
The officers, employees, partners, directors, and
stockholders may inspect and examine the books, accounts, papers,
records, files, safes, and vaults while they are in the custody of
the commissioner. Employees may make entries in these documents
reflecting current operations or transactions.
The power of investigation and examination by the
commissioner is not terminated by the surrender, suspension, or
revocation of any license issued by him or her.
Whenever the commissioner deems it necessary for the general
welfare of the public, he or she has continuous authority to
exercise the powers set forth in this division whether or not an
application for a license has been filed with the commissioner, any
license has been issued, or if issued, has been surrendered,
suspended, or revoked.
(a) For any licensee, a disciplinary action taken by the
State of California, another state, an agency of the federal
government, or another country for an action substantially related to
the activity regulated under this division may be grounds for
disciplinary action by the commissioner. A certified copy of the
record of the disciplinary action taken against the licensee by the
State of California, other state, agency of the federal government,
or other country shall be conclusive evidence of the events related
(b) Nothing in this section shall preclude the commissioner from
applying a specific statutory provision in this division providing
for discipline against a licensee as a result of disciplinary action
taken against a licensee by the State of California, another state,
an agency of the federal government, or another country.
The commissioner may require the attendance of witnesses and
examine under oath all persons whose testimony he or she requires
relative to loans or business regulated by this division or to the
subject matter of any examination, investigation, or hearing.
(a) The cost of each examination of a licensee or a person
subject to this division shall be paid to the commissioner by the
licensee or person examined, and the commissioner may maintain an
action for the recovery of the cost in any court of competent
jurisdiction. In determining the cost of an examination, the
commissioner may use the estimated average hourly cost for all
persons performing examinations of licensees or other persons subject
to this division for the fiscal year.
(b) For the purpose of this section only, no person other than a
licensee shall be deemed to be a person subject to this division
until the person is determined to be a person subject to this
division by an administrative hearing in accordance with Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code or by a judicial hearing in any court of
(a) If, upon inspection, examination, or investigation,
the commissioner has cause to believe that a licensee or other person
is violating any provision of this division or any rule or order
thereunder, the commissioner or his or her designee, may issue a
citation to the licensee or person in writing, describing with
particularity the basis of the citation. Each citation may contain an
order to correct the violation or violations identified and provide
a reasonable time period or periods by which the violation or
violations must be corrected. In addition, each citation may assess
an administrative fine not to exceed two thousand five hundred
dollars ($2,500) that shall be deposited in the State Corporations
Fund. In assessing a fine, the commissioner shall give due
consideration to the appropriateness of the amount of the fine with
respect to factors including the gravity of the violation, the good
faith of the person or licensees cited, and the history of previous
violations. A citation issued or a fine assessed pursuant to this
section, while constituting punishment for a violation of law, shall
be in lieu of other administrative discipline by the commissioner for
the offense or offenses cited, and the citation and fine payment
thereof by a licensee shall not be reported as disciplinary action
taken by the commissioner.
(b) Notwithstanding subdivision (a), nothing in this section shall
prevent the commissioner from issuing an order to desist and refrain
from engaging in a specific business or activity or activities, or
an order to suspend all business operations to a person or licensee
who is engaged in or who has engaged in continued or repeated
violations of this division. In any of these circumstances, the
sanctions authorized under this section shall be separate from, and
in addition to, all other administrative, civil, or criminal
(c) If, within 30 days from the receipt of the citation, the
licensee or person cited fails to notify the department that he or
she intends to request a hearing as described in subdivision (d), the
citation shall be deemed final.
(d) Any hearing under this section shall be conducted in
accordance with Chapter 5 (commencing with Section 11500) of Part 1
of Division 3 of Title 2 of the Government Code.
(e) After the exhaustion of the review procedures provided for in
this section, the commissioner may apply to the appropriate superior
court for a judgment in the amount of the administrative fine and an
order compelling the cited licensee or person to comply with the
order of the commissioner. The application, which shall include a
certified copy of the final order of the commissioner, shall
constitute a sufficient showing to warrant the issuance of the
judgment and order.
After an examination, investigation, or hearing under this
division, if the commissioner deems it of public interest or
advantage, he or she may certify a record to the proper prosecuting
official of the city, county, or city and county in which the act
complained of, examined, or investigated occurred.
The commissioner may require the production for examination
in this state of all books, records, and supporting data used by the
licensee in the preparation of reports to the commissioner. The
books, records, and supporting data shall be made available for
examination by the commissioner in this state within 10 days after a
The commissioner may upon three days' notice and a hearing,
suspend any license for a period not exceeding 30 days, pending
Any licensee may surrender any license by delivering to the
commissioner written notice that the licensee surrenders that
license. Surrender of the license does not affect the licensee's
civil or criminal liability for acts committed prior to surrender of
(a) Whenever, in the opinion of the commissioner, any person
is engaged in the business as a broker or finance lender, or a
mortgage loan originator, as defined in this division, without a
license from the commissioner, or any licensee violates any provision
of this division, any provision of an order, or any regulation
adopted pursuant to this division, the commissioner may order that
person or licensee to desist and to refrain from engaging in the
business or further continuing that violation. If, within 30 days
after the order is served, a written request for a hearing is filed
and no hearing is held within 30 days thereafter, the order is
rescinded. For purposes of this section, "licensee" includes a
mortgage loan originator.
(b) Notwithstanding subdivision (a), if, after an investigation,
the commissioner has reasonable grounds to believe that a person is
conducting business in an unsafe or injurious manner, the
commissioner shall, by written order addressed to that person, direct
the discontinuance of the unsafe or injurious practices. The order
shall be effective immediately, but shall not become final except in
accordance with the provisions of Section 22717.
(a) Whenever the commissioner believes from evidence
satisfactory to the commissioner that any person has violated or is
about to violate a provision of this division, or a provision of any
order, license, decision, demand, requirement, or any regulation
adopted pursuant to this division, the commissioner may, in the
commissioner's discretion, bring an action, or the commissioner may
request the Attorney General to bring an action in the name of the
people of the State of California, against that person to enjoin that
person from continuing that violation or doing any act in
furtherance of the violation. Upon a proper showing, a permanent or
preliminary injunction, restraining order, or writ of mandate shall
be granted and other ancillary relief may be granted as appropriate.
(b) If the commissioner determines that it is in the public
interest, the commissioner may include in any action authorized by
subdivision (a) a claim for ancillary relief, including, but not
limited to, a claim for restitution, disgorgement, or damages on
behalf of the persons injured by the act or practice constituting the
subject matter of the action. The court shall have jurisdiction to
award additional relief.
(c) Any person who willfully violates any provisions of this
division, or who willfully violates any rule or order adopted
pursuant to this division, shall be liable for a civil penalty not to
exceed two thousand five hundred dollars ($2,500) for each
violation, which shall be assessed and recovered in a civil action
brought in the name of the people of the State of California by the
commissioner in any court of competent jurisdiction.
(d) As applied to the penalties for acts in violation of this
division, the remedies provided by this section and by other sections
of this division are not exclusive, and may be sought and employed
in any combination to enforce the provisions of this division.
(a) The commissioner shall suspend or revoke any license,
upon notice and reasonable opportunity to be heard, if the
commissioner finds any of the following:
(1) The licensee has failed to comply with any demand, ruling, or
requirement of the commissioner made pursuant to and within the
authority of this division.
(2) The licensee has violated any provision of this division or
any rule or regulation made by the commissioner under and within the
authority of this division.
(3) A fact or condition exists that, if it had existed at the time
of the original application for the license, reasonably would have
warranted the commissioner in refusing to issue the license
(4) There has been repeated failure by the finance lender, when
making or negotiating loans, to take into consideration in
determining the size and duration of loans, the financial ability of
the borrower to repay the loan in the time and manner provided in the
loan contract, or to refinance the loan at maturity.
(b) A master license may not be suspended or revoked pursuant to
this section as a result of any action or failure to act by a
subsidiary licensee unless grounds exist for the suspension or
revocation of the master license pursuant to this section. An order
suspending or revoking a license or imposing sanctions against a
licensee shall not affect other licensed locations unless expressly
stated in the order.
The commissioner may by order summarily suspend or revoke
the license of any licensee if that person fails to file the report
required by Section 22159 within 10 days after notice by the
commissioner that the report is due and not filed. If, after an order
is made, a request for hearing is filed in writing within 30 days
and the hearing is not held within 60 days thereafter, the order is
deemed rescinded as of its effective date.
The revocation, suspension, expiration, or surrender of any
license does not impair or affect the obligation of any preexisting
lawful contract between the licensee and any borrower.
Except in cases in which the time for setting the hearing is
shortened as provided in this division, the proceedings under this
article shall be conducted in accordance with Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code, and in all cases the commissioner has all the powers
Every order, decision, license, or other official act of the
commissioner is subject to judicial review in accordance with law.