8256.

 This chapter shall be known and may be cited as the Displaced Homemaker Emergency Loan Act.

8256.5.

 The Legislature hereby finds and declares that:

(a)  Many persons, primarily women who have relied upon a spouse as primary or sole means of support, are temporarily without adequate resources to sustain themselves or their dependents, or to become self-sufficient, during transition times occasioned by abandonment, separation, divorce, or widowhood.

(b)  These persons, because of past financial status, may not qualify for public assistance programs. Often, they are ineligible for unemployment payments or other than minimal social security benefits because of their employment history. In many cases, they jointly own property, serving as a principal residence, which they are unable to liquidate in order to provide financial resources, yet which disqualifies them from receiving public assistance.

(c)  An emergency loan program is necessary to assist displaced homemakers in adjusting to the fiscal, emotional, and career crises often inherent in the loss of their primary provider’s support as a result of abandonment, separation, divorce, or widowhood, and to provide them the opportunities, education, and training necessary to live independently and become effective participants in the work force.

(d)  The creation of the loan program contained in this chapter is an important enabling method for these persons to enhance their lives and to ensure their opportunity to achieve self-sufficiency.

(e)  Experience indicates that displaced homemakers require counseling, education, training, and assistance in finding suitable employment, and that the provision of these services in addition to an emergency loan may enable them to live independently and become self-sufficient. These services can be provided by a displaced homemaker resource center that combines a variety of local, state, and federal resources into a one stop, direct service source. It is important to provide the opportunity to test the effectiveness of combining the loan program with the provision of the necessary services to enable displaced homemakers to become self-sufficient.

8257.

 The Legislature hereby creates the Displaced Homemaker Emergency Loan Act which shall be administered by the California Commission on the Status of Women as a pilot project in the Counties of Marin, San Francisco, Alameda, Los Angeles, Orange, and San Diego.

(a)  The commission is authorized to make any regulations, guidelines, and agreements deemed necessary by the commission to carry out the purposes and provisions of this act.

(b)  The commission shall consult with appropriate officials in developing and administering this act.

(c)  Loans may be made to displaced homemakers in amounts not to exceed two thousand five hundred dollars ($2,500) per displaced homemaker.

(d)  Applications for loan guarantees shall be filed with the commission within 18 months from the displacement date.

(e)  Loans shall not be made for purposes for which other public assistance is available.

(f)  Priority shall be given to applicants who are participating in job search or educational programs designed to improve the employability of the individual or who meet the requirements of paragraph (4) of subdivision (a) of Section 8257.2. Loans shall not be made for this purpose if other assistance is available.

(g)  Repayment of a loan shall commence no later than nine months after receipt of the loan, with an option to postpone the commencement of payments another six months in cases of need which are verified by the commission.

(h)  Full payment shall be made within 48 months after commencing loan repayment but the time required for repayment may be extended in cases of need that are verified by the commission.

(i)  The minimum monthly payment on each loan shall be twenty-five dollars ($25).

(j)  Loans shall be made only to displaced homemakers who are being served by displaced homemaker resource centers which have developed a collaborative effort of local communities and state agencies into a one stop source of supportive services for displaced homemakers.

8257.1.

 Loans shall be made for any of the following purposes:

(a)  To maintain or acquire a residence, or electrical, gas, or telephone service.

(b)  For medical emergencies or to maintain health insurance.

(c)  For the cost of short-term services or programs designed to improve employability.

(d)  For emotional or psychological counseling or therapy.

(e)  For child care and related expenses.

(f)  For other emergencies or expenses necessary for the basic maintenance of the household and to enable the household to be self-sufficient.

8257.2.

 (a)  “Displaced homemaker” means a person who has been abandoned by, or separated from, their primary income provider, divorced, or widowed and who has an economic need caused by the displacement, the criteria for which shall include any of the following categories:

(1)  While a homemaker, did not work for a continuous period of at least five years up until the time of displacement or whose work did not provide sufficient job skills to enable him or her to find employment suitable to sustain him or her and the family.

(2)  A person whose income, at the time of displacement, did not amount to more than one-third of the gross household income and did not exceed two-thirds of the statewide median household income.

(3)  A person whose employment has ended within six months of displacement because of stress related to displacement.

(4)  A person who, because of age or care of dependents, has added economic burdens related to the displacement.

(5)  A person who has provided unpaid services to family members and has lost their primary source of income because of the displacement.

(b)  “Displaced homemaker” also means an individual who has not worked in the paid labor force for a number of years, but whose primary occupation, during those years, has been providing unpaid services to family members and who is required to leave the home setting to seek paid employment because the primary source of economic support has been terminated or drastically reduced through displacement.

(c)  “Displacement” means divorce, widowhood, or abandonment by, or separation from, a primary income provider.

(d)  The date of displacement by divorce means the date of legal dissolution of the marriage. The date of displacement by widowhood means the official date of death of a primary income provider. The official date of abandonment or separation means the date after which the spouse has been absent from the household and is withholding the preseparation level of support to the abandoned or separated spouse. For loans requested as a result of abandonment or separation, the borrower shall sign a statement certifying the official date of separation or abandonment from his or her primary income provider as a part of the loan application process.

(e)  “Eligible lender” means:

(1)  A national or state chartered bank, savings and loan association, or a credit union which is subject to examination and supervision by an agency of the United States or of this state.

(2)  A pension fund as defined in the federal Employees Retirement Income Security Act.

(3)  An insurance company which is subject to examination and supervision by an agency of the United States or this state.

(4)  Any eligible lender approved by the commission to make loans pursuant to this chapter.

(f)  “Insured displaced homemaker loan” means a loan, including a full line of credit, to a displaced homemaker by an eligible lender, as to which the payment of principal and interest is fully insured by the commission.

(g)  “Loan guaranty” means the certificate, document, or endorsement issued by the commission as evidence of its insurance of an insured homemaker loan.

8257.3.

 There is hereby established in the State Treasury the Displaced Homemaker Emergency Loan Fund, which shall be used to provide loans pursuant to this chapter. Notwithstanding Section 13340, moneys in the fund are continuously appropriated for purposes of this chapter to the commission.

8258.

 (a)  The commission, the Trade and Commerce Agency, and the State Treasurer shall select participating eligible lenders.

(b)  An application to guaranty a loan made pursuant to the provisions of this chapter shall be made by an eligible lender on such form as the commission may require. The application shall set forth the amount of the loan, its maturity, interest rate, amortization, and any other information required by the commission.

(c)  If, upon application by an eligible lender, the commission finds that the lender has made an eligible loan, the commission shall cause the loan to be guaranteed.

8258.1.

 Upon default by the borrower on any loan made pursuant to the provisions of this chapter, the lender, if a secured party pursuant to Division 9 (commencing with section 9101) of the Commercial Code, shall take such steps, and avail itself of such rights and remedies as may be provided for in the security agreement and by virtue of Chapter 5 (commencing with Section 9501) of Division 9 of the Commercial Code except when, in the determination of the commission, special circumstances exist which do not warrant taking such action.

8258.2.

 (a)  Upon default by the borrower on any loan made pursuant to the provisions of this chapter, the lender shall promptly notify the commission, and the commission shall, if requested, either at that time or after further collection efforts, promptly pay to the lender the amount of the loss sustained by the lender.

(b)  In addition to the amount of loss, and with the approval of the commission, the lender may claim up to five hundred dollars ($500) for actual collection expenses incurred in the attempted collection of the loan. The collection expense shall be a charge against the Displaced Homemaker Emergency Loan Fund.

8258.3.

 Amounts recovered by a lender’s collection efforts subsequent to presenting a claim for loss pursuant to this chapter shall be paid to the Treasurer for deposit in the Displaced Homemaker Emergency Loan Fund.

8258.4.

 Nothing in this chapter shall be construed to excuse the lender from exercising reasonable care and diligence in the making and collection of loans under the provisions of this chapter.

If the commission, after reasonable notice and opportunity for hearing to an eligible lender, finds that it has substantially failed to exercise the reasonable care and diligence required under this section, the commission shall disqualify that lender for further loans made pursuant to this chapter until the commission is satisfied that its failure has ceased and finds that there is reasonable assurance that the lender will in the future exercise necessary care and diligence.

8258.5.

 The California Commission on the Status of Women shall, by March 1, 1997, report to the Legislature on the Displaced Homemaker Emergency Loan program. The report shall include data on the number of loans provided and the characteristics of those receiving loans. The data shall include, but not be limited to, all of the following:

(a)  Default rates.

(b)  Uncollected amounts.

(c)  The number of loan extensions requested and granted.

(d)  The number of individuals receiving loans who are also receiving Aid to Families with Dependent Children grants or other public assistance moneys.

8259.

 This chapter shall remain in effect until September 30, 1998, and as of that date is repealed, unless a later enacted statute, which is enacted before September 30, 1998, deletes or extends that date.