1. (a) No person shall engage in the business of offering to provide or providing subject products to California residents without first registering with the Commissioner pursuant to this subchapter.

2. (b) Subdivision (a) of this section shall not apply to:

   1. (1) Persons engaged in providing debt settlement services who are licensees as defined by Financial Code section 12004 and providing debt settlement services within the scope of that license, or persons who have provided an audit report under section 12104, subdivision (i), within the previous 12 months and are providing debt settlement services solely in accordance with the requirements of that section.
   2. (2) A public postsecondary institution or a private nonprofit postsecondary institution, when offering or providing education financing for the purpose of obtaining postsecondary education at that institution. If such education financing is offered or provided through a partnership with a third party, the third party must be a registrant.
   3. (3) A licensee under the California Financing Law (division 9 (commencing with section 22000) of the Financial Code) when offering or providing education financing or income-based advances, if the licensee meets the requirements of California Code of Regulations, title 10, section 1430.1.
   4. (4) A licensee under the California Deferred Deposit Transaction Law (division 10 (commencing with section 23000) of the Financial Code) when offering or providing income-based advances, if the licensee meets the requirements of California Code of Regulations, title 10, section 2030.5.
   5. (5) A licensee under the Student Loan Servicing Act (division 12.5 (commencing with section 28100) of the Financial Code) when offering or providing education financing to be serviced by the licensee after origination, if the licensee has complied with California Code of Regulations, title 10, section 2044.1.
   6. (6) A payroll service provider when verifying available earnings or performing other related facilitation activities on behalf of an obligor or provider in connection with income-based advances, provided that the payroll service provider does not provide the funds for the income-based advances or control the activities of the provider.
   7. (7) A nonprofit organization that is exempt from federal taxation when providing debt settlement services or student debt relief services to consumers free of charge.
3. (c) Notwithstanding subdivision (a) of this section, an applicant for registration who has filed Forms MU1 and MU2 and paid all required registration fees before the effective date of these regulations shall be permitted to offer and provide the subject product for which the applicant has sought registration until the applicant's application is approved or abandoned.

Note: Authority cited: Section 90009, Financial Code. Reference: Sections 90003, 90005 and 90009, Financial Code.

History

1. New section filed 10-11-2024; operative 2-15-2025 (Register 2024, No. 41).