California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 6 - California Financing Law
Article 1 - General Provisions
Section 1404 - Definitions

Universal Citation: 10 CA Code of Regs 1404

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

The following terms used in subchapter 6 of these rules shall have (unless the context otherwise indicates) the following meanings:

(a) "Call report" or "NMLS Mortgage Call Report" means a report of condition on the company and its operations including financial statements and production activity volumes.

(b) "Company" includes all domestic and foreign private corporations, limited liability companies, joint ventures, associations, syndicates, joint stock companies, partnerships of every kind, unincorporated organizations, government or political subdivisions of a government, trustees and individuals.

(c) "Department" means the Department of Financial Protection and Innovation of the State of California.

(d) "Finance company" means a finance lender or broker subject to the California Financing Law.

(e) "Law" or "Code" means the California Financing Law.

(f) "Mortgage lender" or "mortgage broker" or "mortgage lender and broker" means a finance company who makes, brokers, or services residential mortgage loans and who is required to be licensed pursuant to section 22100 of the Code.

(g) "Form MU1" means the uniform licensing form, entitled "NMLS Company Form," developed by the Nationwide Multistate Licensing System and Registry for use by a company or sole proprietor to apply for and maintain licensure by a state through NMLS. Version 11.0, dated 9/12/2015, is hereby incorporated by reference in its entirety.

(h) "Form MU2" means the uniform licensing form, entitled "NMLS Individual Form," developed by the Nationwide Multistate Licensing System and Registry for background information about individuals who own or control the activities of an applicant or licensee. Version 9, dated 9/12/16, is hereby incorporated by reference in its entirety.

(i) "Form MU3" means the uniform licensing form, entitled "NMLS Branch Form," developed by the Nationwide Multistate Licensing System and Registry for an applicant or a licensee under Form MU1 to apply for or maintain a branch office through NMLS. Version 10, dated 3/31/14, is hereby incorporated by reference in its entirety.

(j) "Form MU4" means the uniform licensing form developed by the Nationwide Multistate Licensing System and Registry for an individual mortgage loan originator license or registration, entitled "Uniform Individual Mortgage License/Registration & Consent Form."

(k) "NMLS" means the Nationwide Multistate Licensing System and Registry.

(l)

(1) If the applicant or licensee is a finance company, "outstanding interests" means equity interests in a finance company (if the applicant or the licensee is a partnership) that have the power to:
(1) vote to elect or direct the management of the applicant or the finance company, or

(2) conduct or manage the lending activities of the finance company. The term "outstanding interests" does not include:
(i) an equity interest in the partnership which represents only an economic interest such as a right to receive income and other distributions from the partnership, or

(ii) an equity interest which does not give the owner or holder the right or ability, directly or indirectly, to elect or direct management of the applicant or the finance company, or

(iii) equity interests where the owner or holder of such interests have entered into a written agreement whereby any right to vote such equity interests are disclaimed (such as an undertaking that any vote will mirror management's vote or the vote of the rest of the finance company's equity interests) or relinquished such that the owner or holder of such equity interests cannot, directly or indirectly, elect officers, directors, or management or otherwise direct, conduct or manage the lending activities of the applicant or finance company.

(2) If the applicant or licensee is a program administrator, "outstanding interests" means equity interests in a program administrator (if the applicant or the licensee is a partnership) that have the power to:
(1) vote to elect or direct the management of the applicant or the program administrator, or

(2) conduct or manage the administering of the PACE program of the program administrator. The term "outstanding interests" does not include:
(i) an equity interest in the partnership which represents only an economic interest such as a right to receive income and other distributions from the partnership, or

(ii) an equity interest which does not give the owner or holder the right or ability, directly or indirectly, to elect or direct management of the applicant or the program administrator, or

(iii) equity interests where the owner or holder of such interests have entered into a written agreement whereby any right to vote such equity interests are disclaimed (such as an undertaking that any vote will mirror management's vote or the vote of the rest of the program administrator's equity interests) or relinquished such that the owner or holder of such equity interests cannot, directly or indirectly, elect officers, directors, or management or otherwise direct, conduct or manage the administering of the PACE program activities of the applicant or program administrator.

(m)

(1) If the applicant or licensee is a finance company, "outstanding equity securities" means securities of a corporation, trust, limited liability company, or association, including an unincorporated organization, that have the power to:
(1) vote for or elect the management of the applicant or the finance company, or

(2) direct, conduct or manage the lending activities or other operations of the finance company. The term "outstanding equity securities" does not include:
(i) non-voting equity securities which represent only an economic interest or a right to receive income and other distributions, or

(ii) equity securities which do not give the owner or holder the right or ability, directly or indirectly, to elect or direct management of the applicant or the finance company, or

(iii) equity securities where the owner or holder of such securities have entered into a written agreement whereby any right to vote such equity securities are disclaimed (such as an undertaking that any vote will mirror management's vote or the vote of the rest of the finance company's stockholders) or relinquished such that the owner or holder of such equity securities cannot elect, directly or indirectly, officers, directors, or management or otherwise direct, conduct or manage the lending activities of the applicant or finance company.

(2) If the applicant or licensee is a program administrator, "outstanding equity securities" means securities of a corporation, trust, limited liability company, or association, including an unincorporated organization, that have the power to:
(1) vote for or elect the management of the applicant or the program administrator, or

(2) direct, conduct or manage the administering of the PACE program or other operations of the program administrator. The term "outstanding equity securities" does not include:
(i) non-voting equity securities which represent only an economic interest or a right to receive income and other distributions, or

(ii) equity securities which do not give the owner or holder the right or ability, directly or indirectly, to elect or direct management of the applicant or the program administrator, or

(iii) equity securities where the owner or holder of such securities have entered into a written agreement whereby any right to vote such equity securities are disclaimed (such as an undertaking that any vote will mirror management's vote or the vote of the rest of the program administrator's stockholders) or relinquished such that the owner or holder of such equity securities cannot elect, directly or indirectly, officers, directors, or management or otherwise direct, conduct or manage the lending activities of the applicant or program administrator.

(n) "Sponsoring" or "to sponsor" means to maintain an employment relationship between a mortgage loan originator and a mortgage lender, mortgage broker, or mortgage lender and broker where the mortgage loan origination activities of the mortgage loan originator are subject to the supervision and oversight of the mortgage lender, mortgage broker, or mortgage lender and broker. A licensed mortgage lender, mortgage broker, or mortgage lender and broker is the "sponsor" of a mortgage loan originator employed by, and subject to the supervision and oversight of, the mortgage lender, mortgage broker, or mortgage lender and broker. For purposes of subchapter 6 of these rules, an employment relationship may be established through factors such as supervision and control of the sponsored mortgage loan originator, legal and regulatory responsibility for the acts of the mortgage loan originator, and performance under the name, authority and policies of the sponsor, and is not necessarily contingent on whether a mortgage loan originator is issued a Form W-2 by the sponsor.

1. Amendment filed 12-3-81; effective thirtieth day thereafter (Register 81, No. 49).
2. Editorial correction of NOTE filed 10-13-82 (Register 82, No. 42).
3. Amendment filed 12-29-83; effective thirtieth day thereafter (Register 83, No. 53).
4. Amendment filed 2-21-85; effective thirtieth day thereafter (Register 85, No. 8).
5. Change without regulatory effect amending subsections (b)(1)-(3) and NOTE filed 6-14-95 pursuant to section 100, title 1, California Code of Regulations (Register 95, No. 24).
6. Amendment filed 8-4-98; operative 9-3-98 (Register 98, No. 32).
7. Amendment of section and NOTE filed 4-1-2010 as an emergency; operative 4-1-2010 (Register 2010, No. 14). A Certificate of Compliance must be transmitted to OAL by 9-28-2010 or emergency language will be repealed by operation of law on the following day.
8. Amendment of section and NOTE refiled 9-28-2010 as an emergency; operative 9-28-2010 (Register 2010, No. 40). A Certificate of Compliance must be transmitted to OAL by 12-27-2010 or emergency language will be repealed by operation of law on the following day.
9. Amendment of section and NOTE refiled 12-23-2010 as an emergency; operative 12-23-2010 (Register 2010, No. 52). A Certificate of Compliance must be transmitted to OAL by 3-23-2011 or emergency language will be repealed by operation of law on the following day.
10. Certificate of Compliance as to 12-23-2010 order, including amendment of subsections (a) and (h), transmitted to OAL 3-14-2011 and filed 4-25-2011; amendments operative 5-25-2011 (Register 2011, No. 17).
11. Amendment of section and NOTE filed 8-5-2021; operative 10-1-2021 (Register 2021, No. 32). Transmission deadline specified in Government Code section 11346.4(b) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20. Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20.

Note: Authority cited: Section 22150, Financial Code. Reference: Sections 22000, 22004, 22008, 22009, 22012, 22100, 22101, 22105, 22109.1 and 22159, Financial Code.

Disclaimer: These regulations may not be the most recent version. California may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.