Code Section Group

Financial Code - FIN

DIVISION 24. California Consumer Financial Protection Law [90000 - 90019]

  ( Division 24 added by Stats. 2020, Ch. 157, Sec. 7. )

CHAPTER 8. Enforcement Powers and Duties [90011 - 90017]
  ( Chapter 8 added by Stats. 2020, Ch. 157, Sec. 7. )

90011.
  

The commissioner and the department shall have all the investigatory and subpoena powers set forth in Sections 11180 to 11191, inclusive, of the Government Code and any subpoena may further require a person to:

(a) Produce documentary material for inspection and copying or reproduction in the form or medium requested by the department.

(b) File written reports or answers to questions.

(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

90012.
  

With respect to the enforcement powers of the commissioner and the department under this division, all of the following apply:

(a) The department may take any action authorized by this law against a covered person or service provider who engages, has engaged, or proposes to engage in unfair, deceptive, or abusive practices with respect to consumer financial products or services.

(b) Relief under this section may include, but is not limited to, any of the following:

(1) Rescission or reformation of contracts.

(2) Refund of moneys or return of real property.

(3) Restitution.

(4) Disgorgement or compensation for unjust enrichment, with any disgorged amounts returned to the affected consumers, to the extent practicable.

(5) Payment of damages or other monetary relief.

(6) Public notification regarding the violation, including the costs of notification.

(7) Limits on the activities or functions of the person.

(8) Monetary penalties, as set forth more fully in paragraph (1) of subdivision (c).

(c) In any civil or administrative action brought pursuant to this division, the following penalties shall apply:

(1) Any person that violates, through any act or omission, any provision of this division shall forfeit and pay a penalty pursuant to this subdivision.

(A) The penalty amounts are as follows:

(i) For any violation of this division, rule or final order, or condition imposed in writing by the department, a penalty may not exceed the greater of either five thousand dollars ($5,000) for each day during which the violation or failure to pay continues, or two thousand five hundred dollars ($2,500) for each act or omission in violation.

(ii) Notwithstanding clause (i), for any reckless violation by a person of this division, rule or final order, or condition imposed by the department, a penalty may not exceed the greater of twenty-five thousand dollars ($25,000) for each day during which the violation continues, or ten thousand dollars ($10,000) for each act or omission in violation.

(iii) Notwithstanding clause (i) or (ii), for any knowing violation, by a person of this division, rule or final order, or condition imposed by the department, a penalty may not exceed the lesser of 1 percent of the person’s total assets, one million dollars ($1,000,000) for each day during which the violation continues, or twenty-five thousand dollars ($25,000) for each act or omission in violation.

(B) In determining the amount of any penalty assessed under this division, the department shall take into account mitigating factors and the appropriateness of the penalty with respect to all of the following:

(i) The amount of financial resources of the person charged.

(ii) The good faith of the person charged.

(iii) The gravity of the violation.

(iv) The severity of the risks to or losses of the consumer, which may take into account the number of products or services sold or provided.

(v) The history of previous violations.

(vi) Other matters as justice may require.

(C) The department may compromise, modify, or remit any penalty that may be assessed or has already been assessed.

(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

90013.
  

The department may bring a civil action in accordance with the following:

(a) If a person violates any provision of this division, rule or final order, or condition imposed in writing by the department, the department may bring an action in the name of the People of the State of California in the superior court to enjoin the acts or practices or to enforce compliance with this law or any rule or order herein under. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and a receiver, monitor, conservator, or other designated fiduciary or officer of the court may be appointed for the defendant or the defendant’s assets, or any other ancillary relief may be granted as appropriate. A receiver, monitor, conservator, or other designated fiduciary or officer of the court appointed by the superior court pursuant to this section may, with the approval of the court, exercise any or all of the powers of the defendant’s officers, directors, partners, trustees, or persons who exercise similar powers and perform similar duties, including the filing of a petition for bankruptcy. No action at law or in equity may be maintained by any party against the commissioner, or a receiver, monitor, conservator, or other designated fiduciary or officer of the court, by reason of their exercising these powers or performing these duties pursuant to the order of, or with the approval of, the superior court.

(b) If the commissioner determines it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief, including, but not limited to, those listed in subdivision (b) of Section 90012 and a claim for penalties as stated in subdivision (c) of Section 90012. The court shall have jurisdiction to award additional relief.

(c) In any action brought by the department, the department may recover its costs in connection with prosecuting the action if the department is the prevailing party in the action.

(d) This section shall not be construed to authorize the imposition of exemplary or punitive damages.

(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

90014.
  

The following limitations apply to actions brought under this division:

(a) Except as otherwise permitted by law or equity, including provisions under any consumer financial law, no civil action may be brought under this division more than four years after the date of discovery of the violation to which an action relates.

(b) In any action arising solely under a California or federal consumer financial law, both:

(1) The limitations period under that consumer financial law shall apply, and not the period under subdivision (a).

(2) The department may commence, defend, or intervene in the action in accordance with the requirements of that provision of law, as applicable.

(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

90015.
  

(a) The department may conduct hearings and adjudication proceedings with respect to any person in order to ensure or enforce compliance with both of the following:

(1) The provisions of this division, including any rule, final order, or condition imposed by the department, under this division.

(2) Any other law that the department is authorized to enforce and any regulations or order prescribed thereunder, unless that law specifically limits the department from conducting a hearing or adjudication proceeding and only to the extent of that limitation.

(b) All hearings provided for in this division shall be conducted in accordance with the administrative adjudication provisions of the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all the powers granted therein.

(c) After notice and an opportunity to be heard, the commissioner may, by order, assess penalties under subdivision (c) of Section 90012.

(d) (1) If, in the opinion of the department, any person engages, has engaged, or proposes to engage in any activity prohibited by Section 90003 or 90004, or an activity, act, practice, or course of business that violates a law, rule, order, or any condition imposed in writing on the person by the department, the department may issue an order directing the person to desist and refrain from engaging in the activity, act, practice, or course of business.

(2) If that person fails to file a written request for a hearing within 30 days from the date of service of the order, the order shall be deemed a final order of the commissioner.

(e) If any person engages, has engaged, or proposes to engage in any activity prohibited by Section 90003 or 90004, or an activity, act, practice, or course of business that violates a law, rule, order, or any condition imposed in writing on the person by the department, with respect to consumer financial products, the department may include in any administrative action authorized under this section, a claim for ancillary relief as set forth in subdivision (b) of Section 90012. The court shall have jurisdiction to award additional relief.

(f) If, in the opinion of the department, any covered person or service provider is engaging, has engaged, or proposes to engage in an activity, act, practice, or course of business that violates a law, rule, order, or any condition imposed in writing on the person by the department, the department may, after notice and an opportunity for a hearing, suspend or revoke the license or registration of the covered person or service provider.

(g) After the exhaustion of the review procedures provided for in this section, the commissioner may apply to the appropriate superior court for an order compelling the cited licensee or person to comply with the orders of the commissioner.

(1) The application shall include a certified copy of the final order of the commissioner.

(2) Upon the filing of the application, the superior court shall set a date for a hearing for an order to show cause why judgment should not be entered, which shall be set not less than 30 calendar days from the date the application is filed.

(3) The commissioner shall serve a copy of the application and final order along with notice of the hearing to all entities or persons cited in the order against whom a civil judgment is sought not less than 15 calendar days before the date set for the hearing. Service of the application shall be pursuant to the methods specified by Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure for service of summons.

(4) The court shall consider the filing of a certified copy of the final order of the commissioner and the proof of service of the application and notice of the hearing on the persons or entities against whom the judgment is sought, a sufficient prima facie showing to warrant the issuance of the civil judgment and order at the hearing. The respondent bears the burden of showing by affirmative evidence at the hearing why the order of the commissioner is not final, or why the timely notice of application and hearing was not provided to avoid judgment being entered by the superior court. Any method of service authorized by laws under which the final order was issued, including those methods under Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code is considered valid service for the purposes of determining whether the order of the commissioner is final.

(5) The respondent shall not be allowed to raise any defenses or present any evidence at the hearing on the application that had been or could have been raised by the respondent at an administrative hearing to challenge the commissioner’s order, or in an appeal or writ from such proceedings.

(6) The judgment issued pursuant to paragraph (4) of this subdivision may be for injunctive relief or payment of ancillary relief or penalties. The judgment may be enforced by the court pursuant to the procedures authorized for any other civil judgment.

(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

90016.
  

The commissioner shall not outsource or delegate enforcement authority under this division to a private attorney.

(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

90017.
  

In regard to cooperation with the Attorney General, the following provisions apply:

(a) The department may enter into an agreement with the Attorney General with respect to civil actions by each agency.

(b) A provision of this division, any regulation or order made under the authority of this division, or any agreement under this subdivision shall not do any of the following:

(1) Limit the powers or authorities of the Attorney General, including, but not limited to, the Attorney General’s ability to prosecute violations of civil or criminal laws.

(2) Limit the rights of any consumer, or the obligations of any covered person or service provider, under the Unfair Competition Law, the False Advertising Law, or any consumer financial law.

(c) (1) If the department obtains evidence that a person has engaged in conduct that may constitute a violation of criminal law, the department shall transmit that evidence to the Attorney General.

(2) This subdivision shall not affect any other authority of the department to disclose information.

(d) (1) This section shall not be construed to limit the authority of the department under this division to cooperate with any regulatory or law enforcement body.

(2) The department shall notify other regulatory agencies that will be impacted by the department’s actions under this division.

(e) Nothing in this division shall limit the ability of any district attorney or any city attorney lawfully permitted pursuant to Section 17204 of the Business and Professions Code to bring actions or obtain relief pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code. Remedies sought and obtained by district attorneys and city attorneys pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code shall be cumulative to remedies set forth in this division.

(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

FINFinancial Code - FIN