Section 1461 - [Operative 2/15/2025] Advances Under the California Financing Law(a) Any advance of funds to be repaid in whole or in part by the receipt of a consumer's wages, salary, commissions, or other compensation for services is a sale or assignment of wages and a loan subject to the California Financing Law, regardless of the funding provider's means of collection, whether the provider has legal recourse if the provider is unable to collect the amount it advanced, or whether the consumer has the right to cancel collection of the amount advanced.(b) This section does not apply to obligors as defined by California Code of Regulations, title 10, section 1004, subdivision (h), who advance from their own funds only income that has accrued to the benefit of a consumer but has not, at the time of the advance, been paid to the consumer.(c) A consumer who receives an advance under subdivision (a) of this section is a borrower and a provider who makes such an advance is a finance lender within the meaning of the California Financing Law.(d) For the purposes of determining whether an advance of funds to a California consumer is to be repaid in whole or in part by the receipt of wages, salary, commissions, or other compensation for services, the source of funds from which the lender ordinarily collects its advances in similar transactions may be considered.(e) This section shall not be read to interpret what is considered a wage assignment under the Labor Code, consumer credit or debt under federal law, including the Truth in Lending Act (15 U.S.C. § 1601 et seq.), or a loan or forbearance of money under the California Constitution, article XV, section 1.(f) A provider of an advance of funds as described in subdivision (a) does not require a license under the California Financing Law if:(1) The advance of funds is an income-based advance as defined by California Code of Regulations, title 10, section 1004, subdivision (g), and(2) The provider is registered with the Department to offer income-based advances under California Code of Regulations, title 10, section 1010. This paragraph shall expire when the registration requirements for income-based advance providers under section 1010 expire.(g) Income-based advances under California Code of Regulations, title 10, section 1004, subdivision (g) are loans under subdivision (a) of this section.Cal. Code Regs. Tit. 10, § 1461
Note: Authority cited: Sections 326, 334, 22150 and 90009, Financial Code; and Stats. 1994, ch. 1115, § 7. Reference: Sections 22100, 22203, 22335 and 90009.5, Financial Code.
1. New section filed 10-11-2024; operative 2/15/2025 (Register 2024, No. 41).