Banks and credit unions are two of the most common sources of consumer and business loans. These loans may be secured or unsecured, and may take the form of home mortgages, home equity loans, installment loans (loans repaid in monthly installments), auto loans, student loans, and credit cards.
In California, banks and credit unions are regulated by both state and federal laws when it comes to providing loans to consumers and businesses. Secured loans, such as home mortgages and auto loans, require collateral, while unsecured loans, like most credit cards and some personal loans, do not. The California Financial Code provides the legal framework for the operation of banks and credit unions, including licensing, lending practices, and consumer protection. Additionally, the California Department of Business Oversight oversees the implementation of these regulations. Federal laws, such as the Truth in Lending Act (TILA), also apply, requiring lenders to disclose terms and costs of loans to borrowers. For home mortgages, the California Homeowner Bill of Rights offers additional protections to homeowners, including fair lending and foreclosure processes. It's important for borrowers to understand the terms of their loans, including interest rates, repayment schedules, and any potential penalties for late or missed payments.