It shall be unlawful for any licensee, directly or indirectly, to provide financing assistance to any person to whom any associate of such licensee provides financing assistance, either contemporaneously with, or within one year before or after, the providing of financing assistance by the licensee, if the terms on which the licensee provides financing assistance are less favorable to the licensee than the terms on which the associate provides financing assistance to the associate. In any case where the financing assistance provided by the associate of the licensee is of a different kind from the financing assistance provided by the licensee, the burden shall be on the licensee to prove that the terms on which it provided financing assistance were at least as favorable to it as the terms on which the associate provided financing assistance to the associate. This section shall not apply to any transaction effected by an associate of a licensee in the normal course of such associate’s business involving a line of credit or short-term financing assistance.
Cal. Fin. Code § 31827
Conflicts of Interest
Known as the Business and Industrial Development Corporations Law
The act spans §§ 31000–31952 (132 sections).
Added by Stats. 1977, Ch. 1164.
Official source: California Legislative Information. Reproduced from public-domain California statutes; confirm against the official source for the current text. Not legal advice.