Frequently Asked Questions - California Finance Lenders License

  1. What kind of loans can a California Finance Lender make?
  2. What is a broker under the California Financing Law?
  1. How do I Apply for a California Finance Lender License?
  2. How Do I Obtain a License for a Branch Office?
  3. How do I file in Nationwide Mortgage Licensing System (NMLS) if I am a CFLL or CRMLA sole proprietor?
  4. How Do I Amend a Finance Lenders License or a Branch Office License under the California Financing Law?
  5. How Do I Surrender a Finance Lenders License or a Branch Office License under the California Financing Law?
  6. Can a California Finance Lender repossess a vehicle after one missed payment?
  7. How do I obtain a certificate of search from the Department of Business Oversight of the Department's records relating to a finance company in the case where (1) the Department of Motor Vehicles' records indicate that there is a lien on my motor vehicle and (2) a transfer of title of the motor vehicle cannot be completed without a lien release to clear the title?
  8. How do I file a complaint against a mortgage banker, finance company, mortgage loan originator, escrow company, payday lender or check seller?

General Questions

  1. WHAT KIND OF LOANS CAN A CALIFORNIA FINANCE LENDER MAKE?

    Loans made by a Finance lender may be unsecured or secured. If the loan is secured, it may be secured by personal property, or if the bona fide principal amount of the loan is greater than $5,000, it may be secured solely by real property or a combination of real and personal property.

  2. WHAT IS A BROKER UNDER THE CALIFORNIA FINANCING LAW?

    The definition of "broker" includes any person engaged in the business of negotiating or performing any act as broker in connection with loans made by a Finance lender. A broker licensed under the California Financing Law may only broker loans to lenders licensed as Finance lenders. The license does not provide the broker with the authority to broker loans to and collect brokerage commissions from other types of lenders such as credit unions and banks.

Licensing Questions

  1. HOW DO I APPLY FOR A CALIFORNIA FINANCE LENDER LICENSE?

    For Companies Engaged in Residential Lending or Brokering:

    In general, an applicant/licensee must:

    1. Broker must have and maintain a $50,000 net worth; Lender/Broker must have and maintain a $250,000 net worth
    2. Obtain and maintain a minimum of $25,000 surety bond.  The bond amount will be based on the amount of origination activities conducted by the licensee.
    3. Have a history absent any criminal history or history of sanctions by any regulatory agency resulting from dishonesty, fraud or deceit.
    4. Have a plan of business consistent with the business of finance lender.

    An application for a license under the California Financing Law for persons engaging in residential lending or brokering must be filed through the Nationwide Mortgage Licensing System (NMLS).

    For Companies Engaged in Non-Residential Lending or Brokering:

    In general, an applicant/licensee must:

    1. Broker must have and maintain a $25,000 net worth;
    2. Obtain and maintain a $25,000 surety bond.
    3. Have a history absent any criminal history or history of sanctions by any regulatory agency resulting from dishonesty, fraud or deceit.
    4. Have a plan of business consistent with the business of finance lender.

    A paper application for a license under the California Financing Law for companies engaging in lending or brokering that is secured by other than residential real property should be downloaded from this website and submitted to the Los Angeles office of the Department.

  2. HOW DO I OBTAIN A LICENSE FOR A BRANCH OFFICE?

    Prerequisites for license applications

    A criminal background check of the person responsible for the lending activities at the location, i.e. branch manager, is required.

    For Companies Engaged in Residential Lending or Brokering:

    An application for a license under the California Financing Law for persons engaging in residential lending or brokering must be filed through the Nationwide Mortgage Licensing System (NMLS). 

    Company must have an MU1 before they file an MU3 in NMLS.  MU3 filings are for branch offices. 

    Company must:

    • Initiate an MU3 filing on NMLS;
    • Download the NMLS Checklist for the branch; and
    • Submit the checklist and the required documents, if any, to the Los Angeles office of the Department

    For Companies Engaged in Non-Residential Lending or Brokering:

    Company must file the “Short Form” application with the Los Angeles office of the Department.

  3. HOW DO I FILE IN NATIONWUDE MORTGAGE LICENSING SYSTEM (NMLS) IF I AM A CFLL OR CRMLA SOLE PROPRIETOR?

  4. A sole proprietor will always have a dual role in NMLS and require two accounts in NMLS with two login names and passwords.

    • NMLS treats sole proprietors as “companies” and requires the completion of a Form MU1.  Thus, the sole proprietor will likely need access as an Account Administrator or a Company User to the “company’s” Form MU1.
    • The sole proprietor will also be identified as a Control Person and requires the completion of a Form MU2.  Therefore, the sole proprietor will need to create an Individual Account for themselves as an individual person.

    If a sole proprietor is also required to hold an individual license (e.g. loan originator license), they do not need another NMLS account.  Their individual record in NMLS can be used to make both Form MU2 and Form MU4 filings.  Additional information can be found on the NMLS website.

  5. HOW DO I AMEND A FINANCE LENDERS LICENSE OR A BRANCH OFFICE LICENSE UNDER THE CALIFORNIA FINANCING LAW?

    Any change of address; change of name; change in control person or officers, directors, trustees, members, manager, branch manager or qualifying individual will require an amendment.

    For Companies Engaged In Residential Lending or Brokering

    Finance Lender License Amendments (Main Company License):
    If there is a change of name, control or ownership, or change of control person or license authority, an amendment must be filed with the Department of Business Oversight' Los Angeles office; attention NMLS Licensing Unit. There is no filing fee for these amendments. Any change of name, or change in control person or manager must also be reported on the applicable Form MU1, Form Mu2 and MU3.

    For any change in address, the change of address request must be received by the Department of Business Oversight 10 days prior to the date of the move or an administrative penalty of $500 will be assessed. If the change of address is for the principal or main location, a rider from your surety bond company reflecting the new location must also be submitted. Change of Address requests cannot be processed without the submission of this rider. Submit one completed form per location.

    All other amendments must be filed through the NMLS

    See the License Amendment Checklist for full details

    Branch Office Amendments

    All amendments must be filed through NMLS.

    If the change involves an address change, the Change of Address form must also be filed with the Department of Business Oversight' Los Angeles office; attention NMLS Licensing Unit, 10 days prior to the date of the move. The Department will charge an administrative penalty of $500 for failure to comply with this notification.

    Any change of address, change or addition of trade name or change of control person or manager must also be reported on the applicable Form MU1, Form Mu2 and MU3.

    Filing an amendment through NMLS does not authorize you to conduct business with the changes requested. You must receive authorization from the Department of Business Oversight before conducting business with the changes requested.

    See the Branch Amendment Check list for full details

    For Companies Engaged in Non-Residential Lending or Brokering

    Please call 1-866-275-2677 and ask for the CFL licensing specialist on duty

  6. HOW DO I SURRENDER A FINANCE LENDERS LICENSE OR A BRANCH OFFICE LICENSE UNDER THE CALIFORNIA FINANCING LAW?

    For Companies Engaged In Residential Lending or Brokering


    Surrendering A Finance Lender License
    There is no fee for surrendering a license. Licensees who make or arrange residential mortgage loans must notify the Department through NMLS when terminating their license.

    Within 5 days of surrendering a license, the licensees must return to the Department of Business Oversight' Los Angeles office: attention NMLS Licensing Unit, the original license and provide the location where the records are maintained, the name, address and phone number of the individual(s) responsible for the safekeeping of the books and records after the license has been surrendered and also the name, address and phone number of the individual responsible for winding down operations at the location and for handling consumer complaints.

    See the Surrender Checklist for full details

    Surrendering A Branch Office License
    There is no fee for surrendering a branch office license. Licensees who make or arrange residential mortgage loans must notify the Department through NMLS when terminating business under this license.

    Within 5 days of surrendering a license, the licensees must return to the Department of Business Oversight' Los Angeles office: attention NMLS Licensing Unit, the original license and provide the location where the records are maintained, the name, address and phone number of the individual(s) responsible for the safekeeping of the books and records after the license has been surrendered and also the name, address and phone number of the individual responsible for winding down operations at the location and for handling consumer complaints.

    See the Surrender Checklist for full details

    For Companies Engaged in Non-Residential Lending or Brokering

    Please call 1-866-275-2677 and ask for the CFL licensing specialist on duty


Consumer Questions

  1. CAN A CALIFORNIA FINANCE LENDER REPOSSESS A VEHICLE AFTER ONE MISSED PAYMENT?

    The California Financing Law does not prohibit a lender from repossessing a vehicle after a single missed payment. To determine whether the repossession of a vehicle is permissible under your loan, refer to the original loan/contract documents that you signed when the financing was obtained. In most cases, lenders are within their rights to repossess a vehicle when a payment is not made.

  2. HOW DO I OBTAIN A CERTIFICATE OF SEARCH FROM THE Department of Business Oversight OF THE DEPARTMENT'S RECORDS RELATING TO A FINANCE COMPANY IN THE CASE WHERE (1) THE DEPARTMENT OF MOTOR VEHICLES' RECORDS INDICATE THAT THERE IS A LIEN ON MY MOTOR VEHICLE AND (2) A TRANSFER OF TITLE OF THE MOTOR VEHICLE CANNOT BE COMPLETED WITHOUT A LIEN RELEASE TO CLEAR THE TITLE?

    The Department of Business Oversight will conduct a Certificate of Search if your lien-holder is a finance company licensed by this department. If your lien-holder is a bank, savings & loan, or credit union please call the California Department of Financial Institutions at (916) 322-5966 or (800) 622-0620. If your lien-holder is a federal credit union call the National Credit Union Association at (703) 518-6300. For companies located outside of California, you need to contact the Consumer Affairs Department of the state where your lien-holder is located.

    In order to obtain a Certificate of Search regarding a finance company located in California, send a written request, along with a stamped, self-addressed envelope and a check or money order in the amount of $2.00 made payable to the Department of Business Oversight, to the following address:

    Department of Business Oversight
    Attention: Cashier
    320 W. 4th Street, Suite 750
    Los Angeles, CA 90013

    The written request must state that it is a request for a Certificate of Search and include the complete name of the finance company for which the search is being requested. The search will be performed for the name provided in the request. Department records contain only the name of the licensee as it appears on the license. An abbreviation of a name will not be able to be searched.

    Also, any additional information, if available, should be furnished to the Department as part of the written request, such as the Department's license number for the finance company, the address of the finance company, and the date of the loan and when the finance company made the loan.

    A Certificate of Search will indicate either that (1) the lien holder (i.e., the finance company) is currently licensed or is no longer licensed or (2) there is no record of the company being licensed by the Department of Business Oversight.

    The Certificate of Search can then be submitted to the Department of Motor Vehicles.

  3. HOW DO I FILE A COMPLAINT AGAINST A MORTGAGE BANKER, FINANCE COMPANY, MORTGAGE LOAN ORIGINATOR, ESCROW COMPANY, PAYDAY LENDER OR CHECK SELLER?

    You may only file a complaint against one of the above companies or mortgage loan originators if they are licensed by the Department of Business Oversight. In order to determine if a company is licensed by the Department of Business Oversight you may call us or search through the Licensee Listing.  In order to determine if a mortgage loan originator is licensed by the Department of Business Oversight please review the NMLS Consumer Access website.

    The Department of Business Oversight' toll-free telephone number for determining license status is (866) 275-2677. You may call this number to discuss your problem and determine if your concern is an issue over which the Department has jurisdiction. Once it is determined that your complaint falls within our jurisdiction, a complaint form will be sent to you, or you may download the complaint form from our website. When we receive the completed form, we contact the company and request the information and documents needed to complete an independent review of the complaint. The Department also requires the licensee involved to investigate and respond to both you and the Department regarding the concerns raised in the complaint.

    Please keep in mind that as an administrative agency, the Department's authority is limited. We cannot litigate on your behalf, or act as your attorney. If the circumstances of your complaint require legal action, you may wish to consult an attorney. If the matter already involves litigation, the Department will generally not issue a letter of findings to you. However, the complaint will be reviewed on a confidential basis and any appropriate action will be taken.