Highlights of 2010 State Chaptered Legislation
The legislation noted below is a compendium of most, but not all of the legislation that may have an impact on financial institutions. Copies of these enrolled bills may be found at http://www.leginfo.ca.gov/bilinfo.html
AB 1268 (Gaines), Chapter 532, Statutes of 2010. Financial Institutions
This statute recasts, into one body of law, various enforcement provisions that are applicable to all licensees of the Department of Financial Institutions; recasts certain provisions of the California Credit Union Law; makes other changes related to credit unions; and makes certain other changes related to banks and trust companies.
AB 1873 (Huffman), Chapter 583, Statutes of 2010. Property Assessed Clean Energy (PACE) Bonds
This statute authorizes the State Treasurer (upon direction of the Pooled Money Investment Board), the Board of Administration of the Public Employees’ Retirement System, and the State Compensation Insurance Fund (SB 1407, Banking, Finance and Insurance Committee, Chapter 651, Statutes of 2010) to purchase PACE bonds from specified funds. It also authorizes a joint powers authority to purchase, and a local agency to sell, the right, title and interest in an assessment contract, pursuant to an agreement between the joint powers authority and the local agency.
AB 2325 (Lieu), Chapter 596, Statutes of 2010. Mortgage Foreclosure Consultants: Loan Audits
This statute amends existing law requiring foreclosure consultants to register with and obtain a certificate from the Department of Justice (DOJ) to include in the definition of foreclosure consultant services arranging or attempting to arrange the audit of any obligation secured by a lien on a residence in foreclosure, thereby requiring any person who provides such services to register with the DOJ.
AB 2347 (Feuer), Chapter 597, Statutes of 2010. Mortgage Defaults: Secondary Public Financing
This statute, until January 1, 2013, creates an exception to the provision governing the exercise of the power of sale by providing that if property contains five or more multi-family units and a public entity, as defined, is a party to a regulatory agreement or recorded deed restriction on the property, the public entity may, by written notice to the trustee, postpone the sale date by no more than 60 days, as specified; provides that if there are multiple parties that are public entities, only one entity may postpone the sale date; and provides that power to postpone the sale may be exercised only once and that the period of postponement expires 180 days from date the notice of default is filed.
AB 2789 (Banking and Finance Committee), Chapter 612, Statutes of 2010. Money Transmission
This statute enacts the Money Transmission Act, which blends the laws and licensing regimes related to transmitters of money abroad, issuers of travelers checks and issuers of payment instruments; adds domestic money transmission and non-bank open-looped stored value cards to regulated products; clarifies that “in California” includes doing business with persons located in California (regardless of physical location of the business); and requires licensees to prominently post a customer notification regarding how to file a complaint concerning a licensee.
SB 931 (Ducheny), Chapter 701, Statutes of 2010. Mortgages: Deficiency Judgments
This statute requires the holder of a first mortgage or deed of trust that is secured by 1-4 family residential real property to accept, as full payment, the proceeds of a short sale to which it agrees in writing, and obligates that note holder to fully discharge the remaining amount of the borrower’s indebtedness on the deed of trust or mortgage following the sale. It does not limit a note holder’s ability to pursue a mortgagor who commits fraud with respect to the sale, or waste with respect to the real property; and does not apply if the borrower is a corporation or a political subdivision of the state.
SB 1149 (Corbett), Chapter 641, Statutes of 2010. Residential Tenancies: Foreclosure
This statute allows access to records regarding unlawful detainer proceedings involving residential property (based on Code of Civil Procedure Section 1161a) to any person if 60 days have elapsed since the complaint was filed with the court, and, as of that date, judgment against all defendants has been entered for the plaintiff, after a trial. Also requires (until January 1, 2013) the immediate successor in interest in the residential property pursuant to a foreclosure (except under specified conditions) to attach a specified cover sheet to any notice of termination of tenancy served on a tenant of that property within the first year after the foreclosure sale.
SB 1221 (Calderon), Chapter 180, Statutes of 2010. Mortgages: Notice of Sale
This statute allows a trustee to notice the sale of a property in a non-judicial foreclosure approximately five days earlier by allowing a notice of sale to be given 85 days, instead of three months, after the filing of a notice of default. It does not move up the actual sale date or otherwise shorten the foreclosure process.
SB 1344 (Kehoe), Chapter 112, Statutes of 2010. Local Agency Investments
This statute removes the sunset date for provisions of the Government Code that allow local agencies to invest a portion of their surplus funds in certificates of
deposit at a bank, credit union, or savings and loan that uses a private sector entity that assists in the placement of certificates of deposit.
SB 1427 (Price), Chapter 527, Statutes of 2010. Foreclosures: Property Maintenance
This statute provides that prior to imposing a fine or penalty for failure to maintain a vacant foreclosed property that is subject to a notice of default or that has been purchased at a foreclosure sale or acquired through foreclosure under a mortgage or deed of trust, a governmental entity shall provide the owner of that property with a notice of violation and an opportunity to correct the violation. It provides further that the assessment or lien to recover the costs of nuisance abatement measures taken by a governmental entity with regard to such property shall not exceed the actual and reasonable costs of nuisance abatement, and shall have been previously adopted at a public hearing.