Highlights of 2012 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 1525 (Allen), Chapter 632, Statutes of 2012, Elder or Dependent Adult Financial Abuse: Money Transmission: Training Materials
This statute requires money transmission licensees to provide their agents with training materials on recognizing and responding to suspected financial abuse of and elder or dependent adult; provides exemptions for licensee agents that engage solely in selling or issuing stored value and for licensees who offer services exclusively via an internet website.

SB 900 (Leno), Chapter 87, Statutes of 2012/AB 278 (Eng), Chapter 86, Statutes of 2012, Mortgages and Deeds of Trust: Foreclosure
This statute, in the case of first-lien mortgages or deeds of trust secured by owner-occupied 1-4 family residential real property, prohibits servicers from pursuing a foreclosure while a borrower is negotiating for a foreclosure alternative or is performing under the terms of a loan modification; requires mortgage servicers to provide a “single point of contact” for borrowers seeking alternatives to foreclosure; and provides injunctive relief or monetary damages when there is a material violation of relevant sections of the Civil Code; provides exemptions for certain mortgage servicers from certain provisions; provides civil penalties for multiple and repeated violations in recording or filing documents relative to a foreclosure proceeding that are not accurate, complete and supported by competent and reliable evidence; and provides a January 1, 2018 sunset date for certain provisions.

SB 979 (Vargas), Chapter 356, Statutes of 2012, Financial Institutions
This statute requires the DFI to publish orders issued pursuant to statute on its internet website; and makes technical changes to the Money Transmission Act.

AB 1599 (Feuer), Chapter 556, Statutes of 2012, Mortgages and Deeds of Trust: Foreclosure
This statute requires a foreclosing entity to provide the borrower with a copy of a recorded notice of default or recorded notice of sale with an attached document that summarizes the content of the respective notice; requires that the summary be translated into Spanish, Chinese, Tagalog, Vietnamese, and Korean; codifies the contents of the required summary and requires the Department of Corporations to provide the translations of the summary, free of charge, and post the translations on its internet website.  This law becomes operative on April 1, 2013 or 90 days after the translations are provided, whichever is later.

AB 1950, (Davis), Chapter 569, Statutes of 2012, Prohibited Business Practices: Enforcement
This statute: 1) eliminates the sunset provision of existing law that prohibits any person who negotiates, arranges, or otherwise offers to perform residential mortgage loan modifications for a fee paid by the borrower, from demanding or receiving any pre-performance compensation, taking a lien on property or wages, or taking a power of attorney from the borrower; 2) prohibits real estate licensees from engaging in the business of, acting in the capacity of, advertising as, or assuming to act as a mortgage loan originator without the required license endorsement; and 3) extends to three years the time allowed for prosecution of a violation of these provisions.

AB 2006 (J. Pérez), Chapter 246, Statutes of 2012, Credit Union Services
This statute allows a state-chartered credit union to, for a fee that does not exceed the actual cost of providing the service, provide certain services to a natural person in the credit union’s field of membership, regardless of whether that person is actually a member of the credit union, including selling and/or cashing checks and other similar money transfer instruments and selling or receiving international and domestic electronic fund transfers.

AB 2314 (Carter), Chapter 201, Statutes of 2012, Real Property: Blight
This statute deletes the sunset clause in current law that provides that a civil fine of $1,000 per day may be imposed on a legal owner for failure to maintain a property acquired through foreclosure; and prohibits an enforcement agency from taking action until at least 60 days after a person takes title to certain property.

AB 2364 (Wagner), Chapter 484, Statutes of 2012, Civil Procedure: Attachment
This statute authorizes financial institutions with fewer than ten California branches or offices and requires financial institutions with ten or more California branches or offices to designate one or more central locations for service of notices of levy or attachment against deposit accounts and the contents of safe deposit boxes held by those institutions and submit those designations to the Department of Financial Institutions (DFI); requires DFI to maintain the information and make it accessible to the public; requires that service be made at the central location when there is such a designation; restricts the reach of levies served at the central location to accounts and safe deposit boxes maintained at those financial institutions' California locations only; establishes mechanisms for use by judgment creditors when a financial institution has not designated a central location for service of legal process; and makes other technical, conforming, and clarifying changes.

AB 2610 (Skinner), Chapter 562, Statutes of 2012, Tenants: Foreclosure and Unlawful Detainer
This statute revises the notice that must be provided to tenants occupying property subject to foreclosure (operative the later of March 31, 2013 or 60 days after the revised notice with foreign language translations is available); extends the sunset date in current law to December 31, 2019; requires the Department of Consumer Affairs to provide the foreign language translations of the revised notice; and extends the length of time provided in an eviction notice from 60 days to 90 days.

SB 825 (Corbett), Chapter 210, Statutes of 2012, Residential Tenancies: Foreclosure
This statute extends until December 31, 2019, the sunset date of current law that requires that any notice to quit regarding a housing unit served within one year after a foreclosure sale include a separate cover sheet that contains a specified additional notice to renters.

SB 980 (Vargas), Chapter 563, Statutes of 2012, Mortgage Loans
This statute extends to January 1, 2017, the sunset provision of existing law that prohibits any person who negotiates, arranges, attempts to negotiate or arrange, or otherwise offers to perform residential mortgage loan modifications for mortgages and deeds of trust secured by real property containing 4 or fewer dwelling units, or other forms of mortgage loan forbearance for a fee paid by the borrower, from demanding or receiving any pre-performance compensation, requiring collateral to secure payment, or taking a power of attorney from the borrower.

SB 1069 (Corbett), Chapter 64, Statutes of 2012, Deficiency Judgments
This statute prohibits a lender from receiving a deficiency judgment for any loan, refinance, or other credit transaction that is used to refinance a purchase money mortgage loan, except to the extent that new principal is advanced; applies only to credit transactions executed on or after January 1, 2013.

SB 1116 (Leno), Chapter 274, Statutes of 2012, California Pollution Control Financial Authority: Capital Access Loan Program
This statute: 1) decreases the minimum contribution required of borrowers who participate in the Capital Access Loan Program (CalCAP) from 2% to 1% of the principal amount of the loan; 2) increases the length of time that a financial institution has in which to apply to the California Pollution Control Financing Authority to enroll a qualified loan in CalCAP; and 3) establishes an April 1, 2017 sunset date on the provision that lowers the minimum lender and borrower contribution amount to 1%.

SB 1342 (Emmerson), Chapter 104, Statutes of 2012, Counties: Recording: Real Estate Instruments
This statute increases the maximum allowable recording fee for a real estate instrument from $3 to $10 and adds additional types of instruments to the definition of "real estate instrument."

AB 929 (Wieckowski), Chapter 678, Statutes of 2012, Debtor Exemptions: Bankruptcy
This statute amends the Code of Civil Procedure to revise the set of bankruptcy exemptions (§703 exemptions) that a bankruptcy debtor may elect in lieu of all other exemptions, and to increase the amount of annual gross income for those 55 or older to qualify for the homestead exemption under §704.730.

AB 2667 (Banking and Finance Committee), Chapter 60, Statutes of 2012, Personal Property: Fraudulent Transfers
This statute conforms the language in Section 3440.1 of the Civil Code, which identifies transactions and property to which the Uniform Fraudulent Transfer Act does not apply, to Division 9 of the Uniform Commercial Code regarding “authentication” of, rather than “signing” financing statements.

AB 1624 (Gatto), Chapter 235, Statutes of 2012, Multiple-Party Accounts
This statute amends the Multiple-Party Accounts Law to base a party’s ownership interest in funds held in the account and funds withdrawn from the account on the party’s net contribution to the account; to allow a court to reduce a claimant’s recovery of an excess withdrawal to the extent that the withdrawn funds benefited the claimant; to eliminate rights of survivorship for funds withdrawn to the extent of the withdrawing party’s net contribution; and to clarify that a depository institution is not required to keep track of the interests of each party to a multiple-party account.