Senate Bill 140 (Maddy – 1981)
Chapter 724, Statutes of 1981 - SB 140
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Former Financial Code sections were affected in 1981 following legislative approval of Senate Bill 140 of 1981. (See Exhibit A, #1g) This bill was introduced on January 15, 1981 by Senator Kenneth L. Maddy on behalf of the California Consumer Finance Association, a group representing six personal property broker companies. (See Exhibit A, #1a, #3, page 2 and #15, document PE-2)
After Senate Bill 140 was assigned to the Senate Committee on Banking and Commerce; it was then considered by the Senate Committee on Finance. (See Exhibit A, #2 and #3) Following successful action by the Senate, the bill was transferred to the Assembly where it was heard by the Committee on Finance, Insurance, and Commerce. It thereafter went to the Assembly Committee on Ways and Means. (See Exhibit A, #8 and #10) This bill was amended five times as it was considered by the Legislature. (See Exhibit A, #1b through #1f)
Upon approval by the Assembly, the measure returned to the Senate for a vote of concurrence with the Assembly amendments. (See Exhibit A, #2 and #13) That concurrence was granted and the bill was sent to Governor Edmund G. Brown, Jr., who signed the bill. It was designated Chapter 724 of the Statutes of 1981. (See Exhibit A, #1g and #2)
The Senate Republican Caucus prepared an “Assembly Amendment” analysis of Senate Bill 140 as last amended on August 20, 1981 which digested the provisions of the bill stating:
This bill enacts the Consumer Finance Lenders Law. The provisions of the law are to be administered by the Commissioner of Corporations.
It creates a new class of lenders—consumer finance lenders—who would be (1) exempt from the constitutional 10% limitation on interest rates charged on loans, and (2) permitted to make consumer loans primarily for personal, family or household purposes. Such loans could be either unsecured, or secured by real or personal property.
Provides for licensing of consumer finance lenders and specifies the fees for licensing of such lenders. Sets forth regulations applicable to loans made by these lenders. It also prescribes maximum fees and charges that such a lender may contract for and receive in connection with a loan. It also sets forth penalties for violations of its provisions.
Finally, it repeals the California Small Business Loan Law under which the activities of small lenders are now regulated.
(See Exhibit A, #7, page 1)