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§ 10092.2. Finance Entity Enrollment.

4 CA ADC § 10092.2Barclays Official California Code of RegulationsEffective: May 13, 2024

Barclays California Code of Regulations
Title 4. Business Regulations
Division 13. California Alternative Energy and Advanced Transportation Financing Authority
Article 6. Commercial Energy Efficiency Financing Program
Effective: May 13, 2024
4 CCR § 10092.2
§ 10092.2. Finance Entity Enrollment.
(a) Descriptions of Finance Provider Applicant and Entity Program Roles
(1) The “Primary Finance Provider Applicant” is the financing company that is applying to the Program for enrollment as a Finance Provider Entity and includes any business organization that is managed, owned, or controlled by the applicant that will perform one or more of the Program roles. The Primary Finance Provider Applicant may fulfill all of the Program roles (described in Section 10092.2(b)(1)-(7)) themselves, or the entity may invite an Affiliate Finance Provider Applicant (as described in Section 10092.2(a)(2)) to apply to fulfill some of the roles. Additionally, the Primary Finance Provider Applicant may invite a Marketing Representative to fulfill the Marketing Representative role described in Section 10092.2(b)(7). If there are two or more entities fulfilling Program roles together, it will be the finance entity that plans to fulfill the “Financing Submittal role” that will be the Primary Finance Provider Applicant. The Primary Finance Provider Applicant must meet requirements described in Section 10092.2(c) and must be a signatory to the Program application.
(2) The “Affiliate Finance Provider Applicant” is a potential co-applicant along with the Primary Finance Provider Applicant. It may fulfill one or more of the roles of the Program described in Section 10092.2(b)(1)-(7). The Affiliate Finance Provider Applicant must meet the requirements described in Section 10092.2(c) and must be a signatory to the Program application.
(3) “Finance Provider Applicant” means the Primary Finance Provider Applicant and the Affiliate Finance Provider Applicant collectively.
(4) “Primary Finance Provider Entity” means a Primary Finance Provider Applicant who has been accepted for enrollment in the Program. The Primary Finance Provider Entity must fulfill all the Program roles described in Section 10092.2(b)(1)-(7) themselves, or this entity may fulfill Program roles along with an Affiliate Finance Provider Entity and, potentially, an additional entity serving as Marketing Representative. If there are two entities fulfilling Program roles together, it will be the finance entity that fulfills the Financing Submittal role that will be determined to be the Primary Finance Provider Entity.
(5) “Affiliate Finance Provider Entity” means an Affiliate Finance Provider Applicant that has been accepted for enrollment in the Program to fulfill Program roles along with the Primary Finance Provider Entity.
(6) “Finance Provider Entity (FPE)” means the Primary Finance Provider Entity and the Affiliate Finance Provider Entity collectively.
(b) Finance Provider Entity Roles Within the Program
(1) “Underwriting”
(A) Means following Program regulations for approving projects and financing for customers pursuant to Section 10092.5(b), Section 10092.6, and Section 10092.7(a)-(c) as well as following the credit and underwriting guidelines submitted by the Finance Provider Applicant pursuant to Section 10092.2(c)(3) that were approved by the Authority as part of the application process.
(B) The Underwriting role must be performed by either the Primary Finance Provider Entity or the Affiliate Finance Provider Entity.
(2) “Origination”
(A) Means engaging in financing origination, including executing the legal contract for repayment of the Enrolled Financing Agreement with the Eligible Commercial Financing Customer, getting Program forms signed and certified by the Eligible Commercial Financing Customer, following Program regulations related to eligible products as well as adhering to product terms approved by the Authority as part of the application process.
(B) The Origination role must be performed by either the Primary Finance Provider Entity or Affiliate Finance Provider Entity.
(3) “Financing Submittal”
(A) Means providing data, documentation, and certifications related to the Project, the Eligible Financing Agreement and the Eligible Commercial Financing Customer and submitting these data, documentation, and certifications to the Authority for enrollment in the Program.
(B) The specific data points required at Financing Submittal are described in Section 10092.8(b)(2).
(4) “Servicing”
(A) Means conducting a customer service operation to on-board all Eligible Financing Agreements into the servicer's servicing system, handling customer inquiries regarding Eligible Financing Agreements already under servicing, sending out regular financing billing statements, collecting and applying payments, handling requests for modifications, collections where necessary, and distributions to investors where applicable.
(B) The Servicing role must be performed by either the Primary Finance Provider Entity or the Affiliate Finance Provider Entity.
(5) “Monthly Reporting”
(A) Means supplying the Authority with a regular report of required data related to financing applications, performance, and sale of financings as described in Section 10092.12.
(B) The Monthly Reporting role must be performed by either the Primary Finance Provider Entity or Affiliate Finance Provider Entity.
(6) “Loss Reserve Account Representative”
(A) Means the Finance Provider Entity for whom the Loss Reserve Account(s) will be opened, and the sole entity that can file a claim in the event of a charge-off.
(B) The Loss Reserve Account Representative role must be performed by either the Primary Finance Provider Entity or the Affiliate Finance Provider Entity.
(7) “Marketing Representative”
(A) Means the entity that is publicly listed on Program websites and marketing materials as a result of participation in the Program.
(B) The Marketing Representative role must be performed by either the Primary Finance Provider Entity or the Affiliate Finance Provider Entity, or by an additional entity.
(C) The Marketing Representative must sign the acknowledgements and certifications in Section 10092.2(c)(4), (5), and (7).
(c) Application to Participate in the Program. A Primary Finance Provider Applicant must submit a complete enrollment application to the Authority signed by an individual authorized to legally bind the Primary Finance Provider Applicant and shall include the signatory's name, title, and date. Where the Primary Finance Provider Applicant wishes to apply along with an Affiliate Finance Provider Applicant, the Affiliate Finance Provider Applicant must also submit an application signed by an individual authorized to legally bind the Affiliate Finance Provider Applicant and provide their name, title, and date. Both the Primary Finance Provider Applicant and the Affiliate Finance Provider Applicant must sign the acknowledgements, certifications, and representations of the Finance Provider Applicant, below. A complete enrollment application includes the following information, disclosures, acknowledgements, certifications, and representations in a format to be specified by the Authority:
(1) Information
(A) For the Primary Finance Provider Applicant:
(i) Name, address, and website URL of the Primary Finance Provider Applicant.
(ii) Name, title, phone number, and e-mail address of the Program contact person for the Primary Finance Provider Applicant.
(iii) The name(s) and e-mail address(es) of individual(s) who are authorized to provide and certify data and submit Eligible Financing Agreements for enrollment in the Program on behalf of the Primary Finance Provider Entity.
(iv) Type of finance entity, e.g., insured depository institution, insured credit union, Community Development Financial Institution, or California Finance Lender, or other type.
(v) Name(s) of any regulatory agency(ies) and any insuring agency(ies) to which the Finance Provider Applicant is accountable and license number(s), if applicable.
(B) For the Affiliate Finance Provider Applicant, if applicable:
(i) Name, address, and website URL of the Affiliate Finance Provider Applicant.
(ii) Name, title, phone number, and e-mail address of the Program contact person for the Affiliate Finance Provider Applicant.
(iii) Type of finance entity, e.g., insured depository institution, insured credit union, Community Development Financial Institution, or California Finance Lender, or other type.
(iv) Name(s) of any regulatory agency(ies) and any insuring agency(ies) to which the Finance Provider Applicant is accountable and license number(s), if applicable.
(C) For the Marketing Representative, if different than the Finance Provider Applicant:
(i) Name, address, and website URL of the Marketing Representative.
(ii) Name, title, phone number, and e-mail address of the Program contact person.
(2) Disclosures. The FPA must disclose the following:
(A) If there are to be separate entities applying to be the Primary Finance Provider Entity and Affiliate Finance Provider Entity, which of the two entities will perform the Underwriting, Origination, Servicing, Monthly Reporting, and Loss Reserve Account Representative roles;
(B) The name of the entity that will be the Marketing Representative;
(C) The name of the entity funding the Projects that are to be enrolled in the Program;
(D) The name of the finance agreement counterparty(ies) or the service agreement counterparty(ies) who will be named on the closing documentation provided to the Eligible Commercial Financing Customer;
(E) The assignee(s) of repayment streams, if any; and
(F) The FPA's intent as to what it will do with the Enrolled Financing Agreements, if known, (e.g. hold, sell, transfer, participate, etc.) and the identity of a purchaser, if applicable.
(3) Proposed Products. To participate in the Program, the FPA must provide a description of proposed financial product(s), including:
(A) A detailed description of the products the FPA is proposing to offer, including, but not limited to, the type of financing product and its relationship to the categories of Eligible Financing Agreements, collateral requirements (if any), minimum and maximum financed amounts, interest rates (including whether they are fixed or variable), terms, service or maintenance charges, fees, prepayment penalties, and a description of customer eligibility and underwriting criteria. These product offerings must be certified by at least one of the Finance Provider Applicants.
(B) A description of the geographic area(s) in California where the financing product(s) will be available.
(C) An explanation of how the Loss Reserve Contribution will be utilized to provide benefits to Eligible Commercial Financing Customers compared to the FPA's typical product offerings in one or more of the following ways:
(i) Broadened approval criteria;
(ii) Longer repayment terms;
(iii) Larger amounts available to finance;
(iv) Better rates; and/or
(v) Other advantageous terms.
(4) Acknowledgements of the Finance Provider Applicant and the Marketing Representative. The application must include the FPA's acknowledgements contained within this Section, signed by an individual authorized to legally bind the FPA. If the FPA will not be filling the Marketing Representative role, the application must additionally include the Marketing Representative's acknowledgements below, signed by an individual authorized to legally bind the Marketing Representative.
(A) The Authority has made no representations, promises, or guarantees pertaining to the volume, quantity, or quality of financing agreements issued pursuant to the Program.
(B) It, its representatives, and agents are not hired by the Authority or any of the participating IOUs, and must not represent themselves as such, or claim association or affiliation with the Authority or any of the participating IOUs in any capacity.
(5) Certifications of the Finance Provider Applicant and Marketing Representative. The application must include the FPA's certifications of this Section, signed by an individual authorized to legally bind the FPA. The FPA certifies that once it is enrolled in the Program as a Finance Provider Entity it will follow Section 10092.2(c)(5)(D)-(G) below. If the FPA will not be filling the Marketing Representative role, the application must additionally include the Marketing Representative's certifications of this Section, except for Section 10092.2(c)(5)(D), signed by an individual authorized to legally bind the Marketing Representative.
(A) It is not subject to a cease and desist order or other regulatory sanction from the appropriate federal or state regulatory body that would impair its ability to participate in the Program.
(B) The individual signing the application is authorized to legally bind the Finance Provider Applicant, and must include the signatory's printed name, title, and date.
(C) All Finance Provider Applicants that are not Financial Institutions must comply with the additional requirements specified in Section 10092.3.
(D) The regulations within this Article constitute a lender services agreement between the FPE and the Authority.
(E) It must follow the Program regulations as set forth in this Article.
(F) It must permit an audit by the Authority of any of its records relating to Enrolled Financing Agreements during normal business hours on its premises, and must supply any other information concerning Enrolled Financing Agreements as may be requested by the Authority. Additionally, the Finance Provider Entity must permit an audit of its records relating to how it is representing the Program to the public, including, but not limited to, web and print collateral, marketing scripts, and marketing materials.
(G) The Authority and the State of California have no liability to the Finance Provider Entity under the Program except from funds deposited in the Loss Reserve Account(s) for the Finance Provider Entity.
(6) In addition to the certifications listed in Section 10092.2(c)(5), the application must include the following certifications of the Primary Finance Provider Applicant. These certifications must be signed by an individual authorized to legally bind the FPA, that upon enrollment in the Program as Finance Provider Entity and for all forthcoming Eligible Finance Agreements submitted for enrollment in the Program, the FPA agrees that:
(A) It will provide the documentation required in Section 10092.8(b)(1), the data required in Section 10092.8(b)(2), and will secure the certifications described in Section 10092.8(b)(3);
(B) The Eligible Commercial Financing Customer will be provided with a Bill Impact Estimate;
(C) The Eligible Financing Agreement will comply with all Program regulations;
(D) The Claim-Eligible Financed Amount will not include any costs for Distributed Generation;
(E) If the entirety of the Claim-Eligible Financed Amount has not yet been funded at the time of submittal, that it will be funded within 30 calendar days of submittal; and
(F) If after submittal, the Primary Finance Provider Entity determines it will not fund the entirety of the Claim-Eligible Financed Amount, that it will notify the Authority within 10 business days of this determination.
(7) Representations of the Finance Provider Applicant and Marketing Representative. The application must include the FPA's representation, warranty, and covenant contained in this Section, signed by an individual authorized to legally bind the FPA. If the FPA will not be filling the Marketing Representative role, the application must additionally include the Marketing Representative's representation, warranty, and covenant below, signed by an individual authorized to legally bind the Marketing Representative. Upon enrollment in the Program as an FPE:
(A) It must retain all records relating to each Enrolled Financing Agreement for the term of financing.
(B) It is solely responsible for identifying and making all disclosures and providing periodic reports to its Eligible Commercial Financing Customer(s) as required under applicable finance laws.
(C) It must comply with all applicable finance laws, possess and maintain all required state and federal licenses, and remain in good standing with all governmental authorities having jurisdiction over its business.
(D) It indemnifies, defends, and holds harmless the Authority, each of the IOUs, their affiliates, and each of its respective officers, directors, employees, agents, and representatives (each of which is an express beneficiary of this indemnity) from and against any and all losses arising in connection with any claim:
(i) Resulting from the negligent or unlawful acts or omissions, or willful or tortious conduct including, but not limited to, any failure of the Finance Provider Entity, or its agents, to comply with applicable finance laws in connection with Enrolled Financing Agreements;
(ii) Resulting from any error or omission by the Finance Provider Entity or any of its agents in the calculation or presentation of principal repayments or interest with respect to an Enrolled Financing Agreement, fees and charges, the receipt and processing of payments received from Eligible Commercial Financing Customers or any collection or enforcement action;
(iii) Alleging any breach of a representation, warranty, or covenant by that Finance Provider Entity;
(iv) Alleging any misrepresentation by the Finance Provider Entity or its agents with respect to the energy impacts to be achieved in connection with an Enrolled Financing Agreement, or any failure or deficiency in the products, materials, or work supplied to a Eligible Commercial Financing Customer in connection with an Enrolled Financing Agreement; and/or
(v) Arising from the Finance Provider Entity's breach or alleged breach of the regulations within this Article and/or its confidentiality or privacy obligations under the regulations within this Article or with respect to the Program.
(E) It agrees that the IOUs are not responsible for, and will have no liability for:
(i) The energy improvements funded through the Enrolled Financing Agreement(s) supported through the Loss Reserve Account(s);
(ii) The assessment of potential benefits and costs associated with those improvements;
(iii) The qualification of the Finance Provider Entity;
(iv) The Finance Provider Entity's marketing and/or lending policies and practices; or
(v) The Authority's educational and outreach activities.
(d) Application Process
(1) Upon receipt of a completed application, the Authority will, within 15 business days, review and determine whether additional information is required, or whether the application is sufficient to permit the Finance Provider Applicant to be a Finance Provider Entity.
(2) The Authority's decision regarding enrollment will be final.
(3) The Authority will notify the Finance Provider Applicant of its decision and provide a Program-assigned identifier if enrolled as a Finance Provider Entity.
(e) Changes to Product Terms
(1) If, after being approved to participate in the Program, an FPE wishes to make changes to products offered that will affect the benefits to Eligible Commercial Financing Customers (as described in Section 10092.2(c)(3) and Section 10092.5), the changes must be approved by the Authority.
(f) Finance Provider Entity Withdrawal and Termination
(1) A Finance Provider Entity may withdraw from the Program after giving written notice, signed by an individual authorized to legally bind the FPE to the Authority. That notice must specify either:
(A) That the Finance Provider Entity waives any further interest in the Loss Reserve Account(s) and the reason for the Finance Provider Entity's withdrawal from the Program (including that all Enrolled Financing Agreements covered by the Loss Reserve Account(s) have been repaid or sold to a different Finance Provider Entity's portfolio); or,
(B) That the Finance Provider Entity will not enroll any further Eligible Financing Agreements under the Program but that the Loss Reserve Account(s) will continue in existence to secure all Enrolled Financing Agreements that were enrolled prior to that notice, and the reason for the Finance Provider Entity's withdrawal from the Program.
(2) For any notice received pursuant to Section 10092.2(f)(1)(A), the remaining balance in the Finance Provider Entity's Loss Reserve Account(s) will be distributed to the appropriate Program Holding Account(s).
(3) The Executive Director may terminate participation of a Finance Provider Entity in the Program, by notice in writing, upon the occurrence of any of the following:
(A) Entry of a cease and desist order, regulatory sanction, or any other action against the Finance Provider Entity by a regulatory agency or court with jurisdiction over the Finance Provider Entity;
(B) Failure of the Finance Provider Entity to abide by applicable finance law or the regulations within this Article;
(C) Failure of the Finance Provider Entity to service or enroll any Eligible Financing Agreements under the Program, as applicable, for a period of one year;
(D) Failure of the Finance Provider Entity to report to the Authority pursuant to Section 10092.12 for 60 calendar days; or
(E) Providing false or misleading information regarding the Finance Provider Entity, or an Enrolled Financing Agreement, to the Authority, or failure to provide the Authority with notice of material changes in submitted information regarding the Finance Provider Entity.
(4) In the event of a termination, the Finance Provider Entity must not enroll any further Eligible Financing Agreements, but all previously Enrolled Financing Agreements will continue to be covered by the Loss Reserve Account(s) until the entity is paid, claims are filed, or the Finance Provider Entity withdraws from the Program pursuant to Section 10092.2(f)(1)(A).
(5) A terminated Finance Provider Entity must continue to report on Enrolled Financing Agreements pursuant to Section 10092.12.
(6) If a terminated Finance Provider Entity fails to report to the Authority pursuant to Section 10092.12 for 60 calendar days, the remaining balance in the Finance Provider Entity's Loss Reserve Account(s) may be distributed to the appropriate Program Holding Account(s).

Credits

Note: Authority cited: Sections 26006 and 26009, Public Resources Code. Reference: Sections 26002, 26002.5, 26003, 26006, 26011 and 26040, Public Resources Code.
History
1. New section filed 12-17-2018 as a deemed emergency pursuant to Public Resources Code section 26009; operative 12-17-2018 (Register 2018, No. 51). A Certificate of Compliance must be transmitted to OAL by 6-17-2019 or emergency language will be repealed by operation of law on the following day.
2. Change without regulatory effect amending section filed 4-4-2019 pursuant to section 100, title 1, California Code of Regulations (Register 2019, No. 14).
3. New section refiled 6-11-2019 as a deemed emergency pursuant to Public Resources Code section 26009, including amendment of subsections (a)(1) and (c)(6)(C) and amendment of Note; operative 6-18-2019 (Register 2019, No. 24). A Certificate of Compliance must be transmitted to OAL by 9-16-2019 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 9-12-2019 as a deemed emergency pursuant to Public Resources Code section 26009; operative 9-16-2019 pursuant to Government Code section 11343.4(b)(2) (Register 2019, No. 37). A Certificate of Compliance must be transmitted to OAL by 12-16-2019 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 9-12-2019 order, including further amendments, transmitted to OAL 12-13-2019 and filed 1-21-2020; amendments operative 1-21-2020 pursuant to Government Code section 11343.4(b)(3) (Register 2020, No. 4).
6. Amendment of section and Note filed 7-19-2021 as an emergency; operative 7-19-2021 (Register 2021, No. 30). A Certificate of Compliance must be transmitted to OAL by 1-18-2022 or emergency language will be repealed by operation of law on the following day.
7. Amendment of section and Note refiled 12-30-2021 as a deemed emergency pursuant to Public Resources Code section 26009; operative 1-18-2022 (Register 2021, No. 53). A Certificate of Compliance must be transmitted to OAL by 4-18-2022 or emergency language will be repealed by operation of law on the following day.
8. Amendment of section and Note refiled as a deemed emergency pursuant to Public Resources Code section 26009; operative 4-18-2022 (Register 2022, No. 15). A Certificate of Compliance must be transmitted to OAL by 7-18-2022 or emergency language shall be repealed by operation of law on the following day.
9. Certificate of Compliance as to 4-18-2022 order transmitted to OAL 7-12-2022 and filed 8-15-2022 (Register 2022, No. 33).
10. Amendment of subsections (c)(3)(C), (c)(7)(D)(iv), (c)(7)(E)(i) and (e)(1) filed 5-13-2024 as a deemed emergency pursuant to public Resources Code section 26009; operative 5-13-2024 (Register 2024, No. 20). A Certificate of Compliance must be transmitted to OAL by 11-12-2024 or emergency language will be repealed by operation of law on the following day.
This database is current through 7/5/24 Register 2024, No. 27.
Cal. Admin. Code tit. 4, § 10092.2, 4 CA ADC § 10092.2
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