1. (a) A lender shall not be authorized to file a demand for a collection guarantee unless it has complied with this section. The requirements contained in this section are in addition to the requirements contained in section 5285.

2. (b) The lender must liquidate all collateral, but shall not be required to file a lawsuit against any borrower or guarantor. “Liquidate” as used in this paragraph means that the lender has exhausted all collateral by one of the following methods:

   1. (1) Converted the collateral into cash;
   2. (2) Demonstrated, to the satisfaction of the corporation that the collateral is without sufficient value to convert to cash; or
   3. (3) Demonstrated that the borrower has filed for bankruptcy.

Note: Authority cited: Section 42106, Public Resources Code. Reference: Sections 42101 and 42102.4, Public Resources Code.

History

1. New section filed 7-26-2006 as an emergency; operative 7-26-2006 (Register 2006, No. 30). This regulatory action is deemed an emergency, was filed directly with the Secretary of State, and shall remain in effect until revised or repealed by the Business, Transportation and Housing Agency pursuant to Public Resources Code section 42106.