Cal. Code Regs. tit. 10 § 1004

Current through Register 2024 Notice Reg. No. 45, November 8, 2024

Section 1004 - [Operative 2/15/2025] Definitions - Income-Based Advances

With respect to income-based advances, these terms shall have the following meanings:

(a) "Amount due" means the amount to be paid by the consumer of an income-based advance on the collection date.

(b) "Account transfer fee" means a fee imposed to move an income-based advance from an account designated or required by the provider to other accounts owned or controlled by the consumer. For purposes of annual reporting account transfer fees pursuant to section 1045, a registrant should only report known account transfer fees assessed by the registrant for funds received from income-based advances.

(c) "Charges" mean any interest, fees, bonuses, commissions, brokerage, discounts, expenses, and other forms of costs charged, contracted for, or received by a person in connection with the investigating, arranging, negotiating, procuring, guaranteeing, making, servicing, collecting, and enforcing of an income-based advance, or otherwise in connection with an income-based advance. Charges include, without limitation, subscription fees, expedited funds fees, account transfer fees, and gratuities. For purposes of this definition, "charges" include amounts received by a person from a consumer for payment of optional or discretionary services elected by the consumer in connection with income-based advances.

(d) "Collection date" means the date a provider plans to collect all previous unpaid income-based advances made during a particular period. This date may be a consumer's payday or the date when the provider anticipates that amounts that have accrued to the benefit of the consumer will be paid to the consumer.

(e) "Expedited funds fee" means any amount paid by a consumer to accelerate the receipt of an income-based advance.

(f) "Gratuity" means an optional payment made by a consumer in connection with the provider's provision of an income-based advance to the consumer that does not affect the service rendered by the provider to the consumer.

(g) "Income-based advance" means an advance made to a consumer by a provider and that has all of the following characteristics:

(1) The advance is based on income the provider has reasonably determined to have accrued to the benefit of the consumer but has not, at the time of the advance, been paid to the consumer;

(2) When the advance is made, the advance is scheduled for collection in a single payment on a date within 34 days, and that date corresponds to the date that the provider anticipates the income described in paragraph (1) of this subdivision will be paid to the consumer; and

(3) The provider warrants to the consumer as part of the contract between the parties on behalf of the provider and, if applicable, any business partners that:

(A) The provider and any business partners have no legal or contractual claim or remedy against the consumer based on the consumer's failure to repay in full the amount due; and

(B) If the amount due is not repaid on the collection date, the provider and any business partners will not engage in any debt collection activities, place the amount due as a debt with or sell it to a third party, or report to a consumer reporting agency concerning the amount due. In this paragraph, "debt collection activities" do not include initiating with the consumer's authorization an electronic fund transfer or payroll deduction to collect any outstanding amount due.

(h) "Obligor" means:

(1) A consumer's employer, or

(2) A person other than a consumer's employer who is contractually obligated to pay a consumer a sum of money on an hourly, project-based, piecework, or other basis for labor or services provided by the consumer to or for the benefit of the person.

(i) "Obligor-based advance" means any income-based advance where the provider intends to collect the amounts that have accrued to the benefit of the consumer directly from the consumer's obligor on the collection date.

(j) "Provider" means a person other than an obligor that engages in the business of providing income-based advances.

(k) "Subscription fee" means any periodic fee paid by a consumer under an agreement that includes any right, whether absolute or conditioned, to receive an income-based advance.

Cal. Code Regs. Tit. 10, § 1004

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

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