California Finance Lenders License – Frequently Asked Questions


General Questions

1. What kind of loans can a California Finance Lender make?

Loans made by a finance lender may be unsecured or secured. If the loan is secured, it may be secured by personal property, or if the bona fide principal amount of the loan is greater than $5,000, it may be secured solely by real property or a combination of real and personal property.

2. What is a broker under the California Financing Law?

The definition of “broker” includes any person engaged in the business of negotiating or performing any act as broker in connection with loans made by a finance lender. A broker’s license under the California Financing Law only authorizes a broker to broker loans to lenders licensed as finance lenders. The license does not provide the broker with the authority to broker loans to and collect brokerage commissions from other types of lenders such as credit unions and banks. Therefore, a broker who seeks to broker loans to other types of lenders must ensure that the broker holds the necessary license to broker to the other type of lender, in circumstances where another license is required. Specifically, a broker licensed under the California Financing Law may also need a license under the Real Estate Law if the broker is brokering real estate loans to a lender not licensed under the California Financing Law.


Licensing Questions

3. How do I Apply for a California Finance Lender License?

A) For Companies Engaged in Residential Lending or Brokering:

In general, an applicant/licensee must:

  1. Broker must have and maintain a $50,000 net worth; Lender/Broker must have and maintain a $250,000 net worth.
  2. Obtain and maintain a minimum of $25,000 surety bond.  The bond amount will be based on the amount of origination activities conducted by the licensee.
  3. Have a history absent any criminal history or history of sanctions by any regulatory agency resulting from dishonesty, fraud or deceit.
  4. Have a plan of business consistent with the business of finance lender.

An application for a license under the California Financing Law for persons engaging in residential lending or brokering must be filed through the Nationwide Multistate Licensing System (NMLS). Select “Getting Started” on the NMLS Resource Center page.

B) For Companies Engaged in Non-Residential Lending or Brokering:

In general, an applicant/licensee must:

  1. Broker must have and maintain a $25,000 net worth.
  2. Obtain and maintain a $25,000 surety bond.
  3. Have a history absent any criminal history or history of sanctions by any regulatory agency resulting from dishonesty, fraud or deceit.
  4. Have a plan of business consistent with the business of finance lender.

An application for a license under the California Financing Law for persons engaged in non-residential lending or brokering may be filed through the Nationwide Multistate Licensing System (NMLS). Select “Getting Started” on the NMLS Resource Center page.

  • Refer to the New Application Checklist for a California Financing Law License for additional information.

     Note: If an applicant wants to apply in paper rather than through NMLS, the applicant may do so until October 1, 2021. However, the applicant will be required to transition its application and bond onto NMLS by December 31, 2021. The paper application is available here.

4. How Do I Obtain a License for a Branch Office?

Prerequisites for license applications

A criminal background check of the person responsible for the lending activities at the location, i.e. branch manager, is required.

An application for a license under the California Financing Law must be filed through the Nationwide Multistate Licensing System (NMLS).

A company must complete an NMLS Company Form (MU1) for a main license before applying for a branch license on the NMLS Branch Form (MU3).

To obtain a license for a branch office, a company must:

If a licensee is not yet on NMLS, the licensee must file the “Short Form” application with the Los Angeles office of the Department. A licensee must transition onto NMLS by December 31, 2021, and after transitioning, all branch office license applications must be submitted through NMLS. 

5. How do I file in Nationwide Multistate Licensing System (NMLS) if I am a CFLL or CRMLA sole proprietor?

A sole proprietor will always have a dual role in NMLS and require two accounts in NMLS with two login names and passwords.

  • NMLS treats sole proprietors as “companies” and requires the completion of an NMLS Company Form (MU1).  Thus, the sole proprietor will likely need access as an Account Administrator or a Company User to the “company’s” Form MU1.
  • The sole proprietor will also be identified as a Control Person and requires the completion of an NMLS Individual Form (MU2).  Therefore, the sole proprietor will need to create an Individual Account for themselves as an individual person.

If a sole proprietor is also required to hold an individual license (e.g., mortgage loan originator license), they do not need another NMLS account.  Their individual record in NMLS can be used to make both Form MU2 and Form MU4 (MLO) filings.  Additional information can be found on the NMLS website.

6. How Do I Amend a Finance Lenders License or a Branch Office License under the California Financing Law?

Any change of address, change of name, change in control person, or change in officers, directors, trustees, members, manager, branch manager or qualifying individual will require an amendment through NMLS. For licensees not yet on NMLS only, file changes directly with the Los Angeles office of the Department.

For Companies on NMLS

Finance Lender License Amendments (Main Company License):

If there is a change of name, control or ownership, or change of control person or license authority, an amendment must be filed with the Department through NMLS.  

For any change in address, the change of address request must be received by the Department of Financial Protection and Innovation through NMLS 10 days prior to the date of the move or an administrative penalty of $500 will be assessed.

See the License Amendment Checklist for full details.

Branch Office Amendments

All amendments must be filed through NMLS.

If the change involves an address change, the change must be filed through NMLS 10 days prior to the date of the move. The Department will charge an administrative penalty of $500 for failure to comply with this notification.

Any change of address, change or addition of trade name, or change of control person or manager must also be reported on the applicable Form MU1, Form MU2 and Form MU3.

Filing an amendment through NMLS does not authorize you to conduct business with the changes requested. You must receive authorization from the Department of Financial Protection and Innovation before conducting business with the changes requested.

See the Branch Amendment Checklist for full details.

For Companies Not on NMLS

Amendments must be filed directly with the Department through the Los Angeles office. Please call 1-866-275-2677 and ask for the CFL licensing specialist on duty. Licensees must be on NMLS by December 31, 2021, and amendments must be submitted through NMLS after that time.

7. How Do I Surrender a Finance Lenders License or a Branch Office License under the California Financing Law?

For Companies on NMLS

Surrendering A Finance Lender License

There is no fee for surrendering a license. Licensees on NMLS must notify the Department through NMLS when terminating their license.

A licensee must provide the location where the records are maintained, the name, address and phone number of the individual(s) responsible for the safekeeping of the books and records after the license has been surrendered, and the name, address and phone number of the individual responsible for winding down operations at the location and for handling consumer complaints.

See the Company Surrender Checklist for details.

Surrendering A Branch Office License

There is no fee for surrendering a branch office license. Licensees who are on NMLS must notify the Department through NMLS when terminating business under this license.

A licensee must provide the location where the records are maintained, the name, address, and phone number of the individual(s) responsible for the safekeeping of the books and records after the license has been surrendered, and the name, address, and phone number of the individual responsible for winding down operations at the location and for handling consumer complaints.

See the Branch Surrender Checklist for details.

For Companies Not on NMLS

Please call 1-866-275-2677 and ask for the CFL licensing specialist on duty.


Consumer Questions

8. Can a California Finance Lender repossess a vehicle after one missed payment?

The California Financing Law does not prohibit a lender from repossessing a vehicle after a single missed payment. To determine whether the repossession of a vehicle is permissible under your loan, refer to the original loan/contract documents that you signed when the financing was obtained. In most cases, lenders are within their rights to repossess a vehicle when a payment is not made.

9. How do I obtain a certificate of search from the Department of Financial Protection and Innovation’s records relating to a finance company in the case where (1) the Department of Motor Vehicles’ records indicate that there is a lien on my motor vehicle and (2) a transfer of title of the motor vehicle cannot be completed without a lien release to clear the title?

The Department of Financial Protection and Innovation will conduct a Certificate of Search if your lien-holder is a finance company licensed by this department. If your lien holder is a bank, savings & loan, or credit union licensed by this department, you may call the department at (866) 275-2677 for assistance. If your lien-holder is a federal credit union call the National Credit Union Association at (703) 518-6300. For companies located outside of California, you need to contact the consumer affairs department of the state where your lien-holder is located. In order to obtain a Certificate of Search regarding a finance company located in California, send a written request, along with a stamped, self-addressed envelope and a check or money order in the amount of $2.00 made payable to the Department of Financial Protection and Innovation, to the following address:

Department of Financial Protection and Innovation
Attention: CFL Licensing Unit
320 W. 4th Street, Suite 750
Los Angeles, CA 90013

The written request must state that it is a request for a Certificate of Search and include the complete name of the finance company for which the search is being requested. The search will be performed for the name provided in the request. Department records contain only the name of the licensee as it appears on the license. An abbreviation of a name will not be able to be searched.

Also, any additional information, if available, should be furnished to the Department as part of the written request, such as the Department’s license number for the finance company, the address of the finance company, and the date of the loan and when the finance company made the loan.

A Certificate of Search will indicate either that (1) the lien holder (i.e., the finance company) is currently licensed or is no longer licensed or (2) there is no record of the company being licensed by the Department of Financial Protection and Innovation.

The Certificate of Search can then be submitted to the Department of Motor Vehicles.

10. How do I file a complaint against a mortgage banker, finance company, mortgage loan originator, escrow company, payday lender or check seller?

If you have a complaint against a company providing a financial product or service to you, you may file a complaint with the Department of Financial Protection and Innovation.  When we receive your complaint, we contact the company and request the information and documents needed to complete an independent review of the complaint. The Department also requires a licensee involved to investigate and respond to both you and the Department regarding the concerns raised in the complaint.

The Department cannot litigate on your behalf, or act as your attorney. If the circumstances of your complaint require legal action, you may wish to consult an attorney. If the matter already involves litigation, the Department will generally not issue a letter of findings to you. However, the complaint will be reviewed on a confidential basis and any appropriate action will be taken.

Last updated: Aug 19, 2021 @ 4:51 pm