Today's Law As Amended


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AB-1103 Deferred interest financing: notice.(2023-2024)



As Amends the Law Today


SECTION 1.

 Division 16 (commencing with Section 33000) is added to the Financial Code, to read:

DIVISION 16. Deferred Interest

33000.
 As used in this division:
(a) “Covered entity” means a person who offers a deferred interest period to consumers.
(b) “Deferred interest period” means a period of time during which a borrower is not required to pay interest on a loan balance at the end of which, if any portion of the loan balance remains unpaid, the borrower is required to pay interest that is backdated and charged on the entire original balance, regardless of how much of the balance remains unpaid.
(c) “Effective notice” means notice that meets all of the following criteria:
(1) The notice is reasonably calculated, and intended in good faith, to inform a consumer that a deferred interest period is ending.
(2) The notice is legible and easy to read.
(3) The notice is delivered to the consumer, at the consumer’s preferred method of contact whether electronically or by mail, within either of the following time periods, as applicable:
(A) If the deferred interest period is one year or less, at least 30 but not more than 45 days before the end of the deferred interest period.
(B) If the deferred interest period is more than one year, at least 45 but not more than 60 days before the end of the deferred interest period.
33001.
 (a) A covered entity shall provide effective notice to a consumer when a deferred interest period is coming to an end.
(b) This section does not apply to a person with respect to whom the application of this section is preempted by federal law.