California § 23035 - A licensee may defer the deposit of a customer

§ 23035. A licensee may defer the deposit of a customer

(a) A licensee may defer the deposit of a customer’s personal check for up to 31 days, pursuant to the provisions of this section. The face amount of the check shall not exceed three hundred dollars ($300). Each deferred deposit transaction shall be made pursuant to a written agreement as described in subdivision (e) that has been signed by the customer and by the licensee or an authorized representative of the licensee. (b) A customer who enters into a deferred deposit transaction and offers a personal check to a licensee pursuant to an agreement shall not be subject to any criminal penalty for the failure to comply with the terms of that agreement. (c) Before entering into a deferred deposit transaction, licensees shall distribute to customers a notice that shall include, but not be limited to, the following: (1) Information about charges for deferred deposit transactions. (2) That if the customer’s check is returned unpaid, the customer may be charged an additional fee of up to fifteen dollars ($15). (3) That the customer cannot be prosecuted in a criminal action in conjunction with a deferred deposit transaction for a returned check or be threatened with prosecution. (4) The department’s toll-free telephone number for receiving calls regarding customer complaints and concerns. (5) That the licensee may not accept any collateral in conjunction with a deferred deposit transaction. (6) That the check is being negotiated as part of a deferred deposit transaction made pursuant to Section 23035 of the Financial Code and is not subject to the provisions of Section 1719 of the Civil Code. No customer may be required to pay treble damages if this check does not clear. (d) The following notices shall be clearly and conspicuously posted in the unobstructed view of the public by all licensees in each location of a business providing deferred deposit transactions in letters not less than one-half inch in height: (1) The licensee cannot use the criminal process against a consumer to collect any deferred deposit transaction. (2) The schedule of all charges and fees to be charged on those deferred deposit transactions with an example of all charges and fees that would be charged on at least a one-hundred-dollar ($100) and a two-hundred-dollar ($200) deferred deposit transaction, payable in 14 days and 30 days, respectively, giving the corresponding annual percentage rate. The information may be provided in a chart as follows: Amount Provided Fee Amount of Check 14-day APR 30-day APR $100 XX XXX XXX XXX $200 XX XXX XXX XXX (e) An agreement to enter into a deferred deposit transaction shall be in writing and shall be provided by the licensee to the customer. The written agreement shall authorize the licensee to defer deposit of the personal check, shall be signed by the customer, and shall include all of the following: (1) A full disclosure of the total amount of any fees charged for the deferred deposit transaction, expressed both in United States currency and as an APR as required under the Federal Truth In Lending Act and its regulations. (2) A clear description of the customer’s payment obligations as required under the Federal Truth In Lending Act and its regulations. (3) The name, address, and telephone number of the licensee. (4) The customer’s name and address. (5) The date to which deposit of check has been deferred (due date). (6) The payment plan, or extension, if applicable as allowed under subdivision (c) of Section 23036. (7) An itemization of the amount financed as required under the Federal Truth In Lending Act and its regulations. (8) Disclosure of any returned check charges. (9) That the customer cannot be prosecuted or threatened with prosecution to collect. (10) That the licensee cannot accept collateral in connection with the transaction. (11) That the licensee cannot make a deferred deposit transaction contingent on the purchase of another product or service. (12) Signature space for the customer and signature of the licensee or authorized representative of the licensee and date of the transaction. (13) Any other information that the commissioner shall deem necessary by regulation. (f) The notice required by subdivision (c) shall be written and available in the same language principally used in any oral discussions or negotiations leading to execution of the deferred deposit agreement and shall be in at least 10-point type. (g) The written agreement required by subdivision (e) shall be written in the same language principally used in any oral discussions or negotiations leading to execution of the deferred deposit agreement; shall not be vague, unclear, or misleading and shall be in at least 10-point type. (h) Under no circumstances shall a deferred deposit transaction agreement include any of the following: (1) A hold harmless clause. (2) A confession of judgment clause or power of attorney. (3) Any assignment of or order for payment of wages or other compensation for services. (4) Any acceleration provision. (5) Any unconscionable provision. (i) If the licensee sells or otherwise transfers the debt at a later date, the licensee shall clearly disclose in a written agreement that any debt or checks held or transferred pursuant to a deferred deposit transaction made pursuant to Section 23035 are not subject to the provisions of Section 1719 of the Civil Code and that no customer may be required to pay treble damages if the check or checks are dishonored.