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<ns0:Id>20250SB__093399INT</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-01-29</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Seyarto</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthor: Senator Niello)</ns0:AuthorText>
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<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Seyarto</ns0:Name>
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<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Niello</ns0:Name>
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<ns0:Title> An act to add Section 22605 to the Financial Code, relating to financial institutions. </ns0:Title>
<ns0:RelatingClause>financial institutions</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>California Financing Law: mortgage trigger lead information.</ns0:Subject>
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<html:p>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.</html:p>
<html:p>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.</html:p>
<html:p>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.</html:p>
<html:p>This bill would provide that no reimbursement is required by this act for a specified reason.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_6CA15824-C89A-48FF-BAFC-8E15B6A4FA60">
<ns0:Num>SECTION 1.</ns0:Num>
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Section 22605 is added to the
<ns0:DocName>Financial Code</ns0:DocName>
,
<ns0:Positioning>immediately following Section 22604</ns0:Positioning>
, to read:
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<ns0:Num>22605.</ns0:Num>
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<html:p>
(a)
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For purposes of this section, the following definitions apply:
</html:p>
<html:p>
(1)
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“Consumer report” has the same meaning as defined in the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1681a).
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<html:p>
(2)
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“Financial institution” includes both of the following:
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<html:p>
(A)
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Any depository or nondepository lender, including a mortgage broker or originator licensed under this division, the California Financing Law (Chapter 1 (commencing with Section 22000)), or the Real Estate Law (Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code).
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<html:p>
(B)
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Any
person engaged in consumer lending or mortgage lending or servicing within this state.
</html:p>
<html:p>
(3)
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(A)
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“Mortgage trigger lead” means a consumer report or related data obtained from a consumer reporting agency in accordance with Section 1681b of Title 15 of the United States Code, if the request is initiated by a credit inquiry related to a real estate-secured loan application.
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<html:p>
(B)
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“Mortgage trigger lead” does not include either of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
A consumer report obtained by the financial institution with which the consumer directly applied.
</html:p>
<html:p>
(ii)
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A servicer or creditor of an existing account.
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<html:p>
(b)
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A financial institution shall not engage in unfair, deceptive, or abusive
acts or practices in the use of mortgage trigger lead information. A violation of this subdivision occurs if the financial institution does any of the following acts:
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<html:p>
(1)
<html:span class="EnSpace"/>
Fails 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.
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<html:p>
(2)
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Fails to comply with all applicable state and federal laws regarding prescreened solicitations, including, but not limited to, providing a firm offer of credit.
</html:p>
<html:p>
(3)
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Uses consumer information in violation of either of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The consumer’s opt-out request from prescreened offers under federal law.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The consumer’s
registration on the federal “do not call” registry.
</html:p>
<html:p>
(4)
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Engages in bait-and-switch marketing by both:
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<html:p>
(A)
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Offering specific rates, terms, or costs.
</html:p>
<html:p>
(B)
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Subsequently changing those terms to the consumer’s detriment, unless clearly disclosed and justified.
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<html:p>
(c)
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(1)
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A violation of this section constitutes an unlawful, unfair, or deceptive business practice under Section 17200 of the Business and Professions Code.
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<html:p>
(2)
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The Attorney General, the Commissioner of Financial Protection and Innovation, and local prosecutors may enforce this section.
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<html:p>
(3)
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A consumer who suffers a violation of this section may bring a
private right of action for damages, injunctive relief, and reasonable attorney’s fees, in accordance with applicable law.
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<ns0:Num>SEC. 2.</ns0:Num>
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<html:p>
No reimbursement is required by this act pursuant to Section 6 of Article XIII
<html:span class="ThinSpace"/>
B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII
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B of the California Constitution.
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