Cal. Code Regs. Tit. 10, § 1461 - Advances Under the California Financing Law
(a)
Any advance of funds to be repaid in whole or in part by the receipt of a
consumer's wages, salary, commissions, or other compensation for services is a
sale or assignment of wages and a loan subject to the California Financing Law,
regardless of the funding provider's means of collection, whether the provider
has legal recourse if the provider is unable to collect the amount it advanced,
or whether the consumer has the right to cancel collection of the amount
advanced.
(b) This section does not
apply to obligors as defined by California Code of Regulations, title 10,
section 1004, subdivision (h), who advance from their own funds only income
that has accrued to the benefit of a consumer but has not, at the time of the
advance, been paid to the consumer.
(c) A consumer who receives an advance under
subdivision (a) of this section is a borrower and a provider who makes such an
advance is a finance lender within the meaning of the California Financing
Law.
(d) For the purposes of
determining whether an advance of funds to a California consumer is to be
repaid in whole or in part by the receipt of wages, salary, commissions, or
other compensation for services, the source of funds from which the lender
ordinarily collects its advances in similar transactions may be
considered.
(e) This section shall
not be read to interpret what is considered a wage assignment under the Labor
Code, consumer credit or debt under federal law, including the Truth in Lending
Act (15 U.S.C. §
1601 et seq.), or a loan or forbearance of
money under the California Constitution, article XV, section 1.
(f) A provider of an advance of funds as
described in subdivision (a) does not require a license under the California
Financing Law if:
(1) The advance of funds is
an income-based advance as defined by California Code of Regulations, title 10,
section 1004, subdivision (g), and
(2) The provider is registered with the
Department to offer income-based advances under California Code of Regulations,
title 10, section 1010. This paragraph shall expire when the registration
requirements for income-based advance providers under section 1010
expire.
(g) Income-based
advances under California Code of Regulations, title 10, section 1004,
subdivision (g) are loans under subdivision (a) of this section.
Notes
Note: Authority cited: Sections 326, 334, 22150 and 90009, Financial Code; and Stats. 1994, ch. 1115, § 7. Reference: Sections 22100, 22203, 22335 and 90009.5, Financial Code.
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