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TITLE 2. CREDIT SALES
CHAPTER 1. RETAIL INSTALLMENT SALES
Article 1. General Provisions
California Civil Code Section 1801-1801.7




1801.  This chapter may be cited as the "Unruh Act."



1801.1.  Any waiver by the buyer of the provisions of this chapter
shall be deemed contrary to public policy and shall be unenforceable
and void.


1801.2.  If any provisions of this chapter or the application
thereof to any person or circumstances is held unconstitutional, the
remainder of the chapter and the application of such provision to
other persons or circumstances shall not be affected thereby.




1801.4.  The provisions of this chapter shall not apply to any
contract or series of contracts providing for:  (a) the construction,
sale, or construction and sale of an entire residence, including a
mobilehome, or all or part of a structure designed for commerical or
industrial occupancy, with or without a parcel of real property or an
interest therein, (b) for the sale of a lot or parcel of real
property, including any site preparation incidental to such sale, (c)
the sale of any aircraft required to be registered under the Federal
Aviation Act of 1958, or (d) the sale of any vessel as defined in
subdivision (a) of Section 9840 of the Vehicle Code if the cash price
of such vessel, including accessories and equipment sold in
conjunction therewith, exceeds twenty-five thousand dollars
($25,000).



1801.5.  Notwithstanding any other provision of this chapter to the
contrary, any information required to be disclosed in a retail
installment contract or other document under this chapter may be
disclosed in any manner, method, or terminology required or permitted
under Regulation Z, as in effect at the time such disclosure is
made, except that permitted by paragraph (2) of subdivision (c) of
Section 226.18 of Regulation Z, provided that all of the requirements
and limitations set forth in subdivision (b) of Section 1803.3 are
satisfied.  Nothing contained in this chapter shall be deemed to
prohibit the disclosure in such contract or other document of
additional information required or permitted under Regulation Z, as
in effect at the time such disclosure is made.



1801.6.  (a) The Legislature finds that the decisional law of this
state regarding the characterization of credit transactions as either
loans or credit sales has been made unclear by the holding in King
v. Central Bank, 18 Cal. 3d 840.  It is the purpose of subdivision
(b) to clarify such law by establishing standards for determining
whether a transaction is subject to the Unruh Act.  However,
subdivision (b) is not intended to abrogate the judicial principle
that the substance of a transaction rather than its form is
determinative of its characterization as a loan or credit sale as
exemplified by such decisions as Verbeck v. Clymer, 202 Cal. 557,
Milana v. Credit Discount Co., 27 Cal. 2d 335, and Boerner v. Colwell
Co., 21 Cal. 3d 37.  Subdivision (b) also is not intended to
abrogate the decision in Morgan v. Reasor Corp., 69 Cal. 2d 881, to
the extent such decision has not been modified by Chapter 554 of the
Statutes of 1969 or other legislative amendments to the Unruh Act.
   (b) The provisions of this chapter shall not apply to any
transaction in the form of a loan made by a supervised financial
organization to a buyer of goods or services where all or a portion
of the loan proceeds are used to purchase such goods or services,
whether or not the seller of such goods or services arranges the loan
or participates in the preparation of the loan documents, unless the
supervised financial organization and the seller:
   (1) Are related by common ownership and control and the
relationship was a material factor in the loan transaction; or
   (2) Share in the profits and losses of either or both the sale and
the loan.
   (c) For purposes of this section:
   (1) The term "supervised financial organization" means a person
organized, chartered, or holding a license or authorization
certificate to make loans pursuant to the laws of this state or the
United States who is subject to supervision by an official or agency
of this state or the United States.
   (2) Receipt of a loan commission, brokerage or referral fee by a
seller from a supervised financial organization shall not constitute
a sharing of profits of the supervised financial organization,
provided that such  payment (i) is reasonable under the circumstances
existing at the time the loan is consummated, and (ii) is not
refundable or is wholly or partly refundable only if the loan is
voluntarily paid in full prior to its scheduled maturity.  For
purposes of this paragraph, a loan commission, brokerage or referral
fee not exceeding the greater of 1 percent of the amount financed (as
that term is defined by Regulation Z with respect to loans), or
twenty dollars ($20), is reasonable under the circumstances existing
at the time the loan is consummated.
   (3) Payment of money by a seller to a supervised financial
organization pursuant to an actual or alleged contractual or
statutory obligation to indemnify a supervised financial organization
for losses incurred as a result of the assertion by a buyer of
claims or defenses with respect to goods or services purchased with
loan proceeds shall not constitute participation in or sharing of
loan losses by the seller.


1801.7.  The provisions of this chapter shall not apply to any
premium finance agreement entered into by an industrial loan company
pursuant to Chapter 8 (commencing with Section 18560) of Division 7
of the Financial Code.

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