On Aug. 13, CAL LEG passed bill related to nonprofit proraters law.
CAL LEG passed Bill SB 985 related to check sellers, bill payers and proraters law.
Bill increases the amount of fees a nonprofit community service organization may collect while remaining exempt from the Check Sellers, Bill Payers, and Proraters Law.
Proraters Law
Bill amends CAL Financial CodeCAL FIN 3-2-12104 re nonprofits, debtor obligations.
Prohibits a person, without a license from the Commissioner of Financial Protection and Innovation, engages in the business of receiving or distributing for debtor obligations.
Proraters Law exempts some nonprofit organization from requirements under the law.
Bill provides as a criteria for exemption, that nonprofit receives from a debtor no more than a one-time sum not to exceed $100 for education, counseling (previously, $50).
Must be combined with debt management/settlement services, for debt management plans, sum not over 15% of monthly disbursement or $75/month, whichever is less.
Previously, 8% of the money disbursed monthly or $35 per month, whichever is less.
Revises and recasts the requirement for exemption from Proraters Law that a nonprofit has counseling on consumer credit problems and family budgets as a primary function.
The nonprofit must also specify that counseling is via in-person, telephone, and virtual.
Increases, from $25K to $100K, required surety bond amount maintained by nonprofit.
Legislative History
On Jan. 29, 2024, bill introduced in Senate; on Apr. 18, 2024, bill passed in Senate.
On Apr. 18, 2024, bill delivered to Assembly; on Aug. 8, 2024, bill passed in Assembly.
On Aug. 8, 2024, bill returned to Senate; on Aug. 13, 2024, bill delivered to governor.
Effectiveness
No effective date specified; CAL bills generally effective Jan. 1 next year, Jan. 1, 2025.
Aug. 19, 2024 CAL LEG Governor Approval
On Aug. 19, 2024, CAL LEG governor signed bill as Ch. 178, effective Jan. 1, 2025.
Regulators
CAL LEG
Entity Types
Corp
Reference
Ch. 178, PR, 8/19/2024; Bill SB985, 8/13/2024; Citation: CAL FIN 3-2-12104;
