No person in connection with or incidental to the making of a loan shall require the borrower to enter into any collateral sales agreements or contracts, other than the contract of pledge, assignment, or mortgage or personal property, or if otherwise permitted by this division, the deed of trust, mortgage, or lien on real property, by the borrower to the lender as security for the repayment of the loan and charges on the loan. Insurance of the type specified in Section 22313, credit life insurance, and credit disability insurance are not prohibited by this section.

(Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)

Terms Used In California Financial Code 22312

  • Contract: A legal written agreement that becomes binding when signed.
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Person: includes any person, firm, partnership, association, corporation, company, limited liability company, syndicate, estate, trust, business trust, or organization of any kind. See California Financial Code 18
  • Personal property: All property that is not real property.
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  Previous section
Next section  
 Article 3 Contents