Legislation & Policies for Division of Corporations
First Half of the 2011-2012 – Regular Legislative Session
Please find below a summary of legislation enacted during the First Half of the 2011-2012 Regular Legislative Session that have a direct impact on the laws and programs administered by the Department of Corporations
All bills become effective January 1, 2012, except as specified. Bills with an urgency clause become effective upon the Governor’s signature. To view a specific bill, please click on the link below, or you may view all bills on this page by scrolling.
- LEGISLATION IMPACTING THE LENDING, SERVICING OR BROKERING OF RESIDENTIAL MORTGAGE LOANS
- CORPORATE SECURITIES LAW OF 1968
- LEGISLATION IMPACTING RELATED SUBJECT MATTER
SB 4 (Calderon)
Chapter 229, Stats. 2011
SB 4 changes the non-judicial foreclosure process to require that a Notice of Sale include: (1) a notification to potential bidders to inform them of specified risks that could be involved in bidding on a property at a trustee sale and (2) a notification to property owners to inform them how to obtain information about postponements of the sale of their property. This bill also requires that a “good faith” effort be made to provide the latter information.
SB 6 (Calderon)
Chapter 716, Stats. 2011
SB 6 prohibits a licensed real estate broker or salesperson from knowingly or intentionally misrepresenting the value of real property or having a prohibited interest in the property. It prohibits an appraisal management company from improperly influencing any appraisal and prohibits seeking to influence an appraiser to report a minimum or maximum value for specified property. And lastly, the bill prohibits a person or entity preparing a residential appraisal from having an interest in that property.
SB 217 (Vargas)
Chapter 444, Stats. 2011
SB 217 amends the laws governing mortgage loan originators to permit the Commissioners of Corporations and Real Estate to consider licensure for individuals with expunged felonies, and permits the Department of Corporations to register “exempt companies” in order to license mortgage loan originators that are employed by a financial institution exempt from licensure under current lending laws.
SB 458 (Corbett)
Chapter 82, Stats. 2011
URGENCY –Effective July 11, 2011
SB 458 amends last year’s “short-sale” anti-deficiency law by extending the protection from mortgage deficiency judgments to any mortgage or deed of trust with the consent of the holder, treating a short sale of residential property secured in a multi-collateral loan as a nonjudicial foreclosure, prohibiting
lenders from requiring homeowners to pay the lender for his or her consent to a short sale, and expanding the entities and transactions that would be exempt from this protection. SB 458 includes an urgency clause.
AB 361 (Huffman)
Chapter 728, Stats. 2011
AB 361 establishes a new form of corporate entity called a “benefit corporation,” and requires a benefit corporation to have the purpose of creating a general public benefit, defined as a material positive impact on society and the environment, as assessed against a third-party standard.
AB 571 (Hagman)
Chapter 203, Stats. 2011
AB 571 amends that part of the General Corporation Law related to distributions to shareholders by corporations.
AB 657 (Gordon)
Chapter 204, Stats. 2011
(Civil Code, Corporations Code, Financial Code, Govt. Code)
AB 657 provides businesses the option of supplying an electronic mail address to receive paperless reminders and notifications from the Secretary of State to file Statements of Information. The bill also makes several minor statutory changes to standardize the filing requirements for businesses.
AB 1211 (Silva)
Chapter 442, Stats. 2011
AB 1211 makes many clarifying, technical, and non-substantive changes to Corporations Code provisions that affect not-for-profit corporations, public benefit corporations, charitable corporations, and unincorporated associations.
SB 201 (DeSaulnier)
Chapter 740, Stats. 2011
SB 201 enacts the Corporate Flexibility Act of 2011, and changes the California Corporations Code by adding a new division that authorizes a new type of corporate entity known as a Flexible Purpose Corporation (FPC). FPCs are for-profit corporations with embedded socially conscious objectives, referred to as “special purposes”. FPCs are for-profit corporations where directors and managers can consider social objectives in addition to financial performance.
AB 424 (Eng)
Chapter 318, Stats. 2011
AB 424 eliminates the graduated interest rate caps on pawnbroker loans of more than $225 and increases the allowable interest rate to a flat 2.5% per month that pawnbrokers may charge on loans. The bill also standardizes the terminology concerning a loan’s length of time and increases the amount that a pawnbroker may charge on a loan of less than $15 from one dollar ($1), to one dollar per month for the first three months.
AB 597 (Eng)
Chapter 612, Stats. 2011
AB 597 establishes a fund in the State Treasury for the purpose of supporting partnerships between public and private entities to improve Californians’ financial literacy. AB 597 authorizes the Controller to convene an advisory committee to help oversee the fund and improve financial literacy, and requires him or her to submit a report on the fund’s usage.
AB 689 (Blumenfield)
Chapter 295, Stats. 2011
AB 689 requires insurers and insurance producers to comply with requirements regarding the purchase, exchange, or replacement of an annuity and prohibits an insurance producer from selling annuities unless he or she has received approved training. AB 689 provides that a broker-dealer’s compliance with FINRA’s rules meets the requirements of the Insurance Code.
AB 793 (Eng)
Chapter 223, Stats. 2011
AB 793 prohibits an insurance broker or agent from participating in, being associated with, or employing any party that participates in, or is associated with, the originating of a reverse mortgage. The bill prohibits individuals transacting insurance from receiving compensation, commission, or direct incentive for providing reverse mortgage brokers with a noncasualty insurance product that is connected to or a result of the reverse mortgage.
SB 33 (Simitian)
Chapter 372, Stats. 2011
SB 33 makes technical, nonsubstantive changes to the Financial Elder Abuse Reporting Act of 2005 by deleting the January 1, 2013 repeal date. The Financial Elder Abuse Reporting Act of 2005 requires employees and officers of financial institutions (banks, savings associations, credit unions or their affiliates) to report suspicions of financial abuse of elders or dependent adults immediately to a local law enforcement agency, a local adult protective services agency or a local ombudsman if the elder or dependent adult resides in a long-term care facility, if the employee or officer observed or has knowledge of an incident that reasonably appears to be financial abuse.
SB 53 (Calderon)
Chapter 717, Stats. 2011
SB 53 requires a real estate broker who arranges a multi-lender securities transaction to maintain the exemption or qualification information in the broker’s transaction file, and to provide a specified notice to the investor within 10 days after receiving funds; SB 53 also requires a real estate broker who engages in escrow activities for five or more transactions in a year, or whose escrow activity equals or exceeds one million dollars, to file a report annually with the Bureau of Real Estate, documenting all their escrow activities and the dollar amount escrowed during the year.
SB 398 (Hernandez)
Chapter 704, Stats. 2011
URGENCY – Effective October 9, 2011
SB 398 is intended to fix an unintended consequence from last year’s AB 1743, which prohibited a person from acting as a placement agent in connection with any potential investment made by a state public retirement system unless that person is registered as a lobbyist under the California Political Reform Act. SB 398 clarifies the definition of a placement agent to address concerns that AB 1743 could be interpreted to include all broker dealers engaged in general secondary and primary securities transactions with state retirement systems.
SB 510 (Correa)
Chapter 709, Stats. 2011
SB 510 establishes requirements for an individual to become a real estate branch manager and authorizes the Commissioner of the Bureau of Real Estate to discipline a branch manager for failure to supervise branch operations.