AB 2350 amends Section 22010 of the Financial Code to make stylistic changes to the wording that defines who is not a “finance lender,” “broker,” or “program administrator.” The core textual change replaces gendered pronouns "his or her" with the gender-neutral plural "their" and retains the existing employee-exemption language for employees working at the licensed location.
The bill is housekeeping in nature: it does not create new regulatory powers, change licensing criteria, or alter the substance of the employee exemption. Its practical effect will be limited to statutory text updates and small compliance and administrative adjustments by regulators, licensees, and counsel who maintain statutory references and form language.
At a Glance
What It Does
The bill amends Financial Code §22010 to update pronoun usage and preserve the existing rule that employees regularly employed at the licensed location are not treated as the covered entities, except when acting within the scope of employment. It does not add new obligations, penalties, or licensing requirements.
Who It Affects
Primary audiences are licensed finance lenders, brokers, program administrators, their compliance teams, counsel who draft licensing and employment policies, and the Department of Financial Protection and Innovation (the Commissioner). Court practitioners and regulators who cite §22010 will also need to note the revised wording.
Why It Matters
Although textual and non-substantive, the change modernizes statutory language and reduces gendered phrasing that can create drafting mismatches across documents. It also eliminates a minor source of stylistic inconsistency that organizations routinely reconcile in forms, policy manuals, and guidance.
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What This Bill Actually Does
AB 2350 touches only one statutory provision: Financial Code §22010, which describes who falls outside the definitions of "finance lender," "broker," and "program administrator." The bill substitutes gendered pronouns with the gender-neutral plural "their," and otherwise leaves the exclusion and exception structure intact. In practice, the provision continues to say: employees regularly employed at the licensed location are not counted as the licensed entity, but if an employee acts within the scope of employment the employee is covered by the same exemptions as the employer.
Because the amendment is explicitly stylistic, it does not change the set of actors who are subject to the California Financing Law or the Commissioner’s licensing authority. It neither alters licensing thresholds nor creates new compliance duties for lenders or brokers.
The bill's language makes the statute consistent with contemporary drafting practices and reduces potential mismatches between statutory text and gender-neutral corporate policies or personnel documents.For compliance teams, the operational takeaway is minimal: update internal citations, compliance manuals, licensing applications, and any statutory references in template contracts or employee handbooks to match the revised statutory text. The Department and regulated entities may also choose to republish guidance or annotated versions of §22010 to reflect the wording change, but no substantive guidance revisions should be necessary because the legal effect remains the same.Finally, the bill retains the clause making the section operative on January 1, 2019, language that appears carried over from the existing statute.
That date has no substantive retroactive effect here because the amendment is stylistic; courts typically treat such edits as non-substantive unless the legislative history or text indicates an intent to change legal rights or duties.
The Five Things You Need to Know
AB 2350 amends Financial Code Section 22010 — the statutory text that excludes certain employees from the definitions of "finance lender," "broker," and "program administrator.", The amendment replaces the gendered phrase "his or her" with the gender-neutral plural "their.", The bill keeps the existing carve-out: employees regularly employed at the licensed location are excluded from the covered definitions, except when acting within the scope of employment, in which case they are exempt from the same laws as the employer.
The statutory text retains an operative clause stating the section became operative January 1, 2019 — a carryover that does not change current obligations given this is a textual cleanup.
The legislative digest characterizes the change as nonsubstantive; the bill does not create new duties, penalties, or funding requirements.
Section-by-Section Breakdown
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Exclusion for employees at licensed location
This subsection continues to exclude employees who are regularly employed at the physical location specified on the license from the statutory definitions of finance lender, broker, and program administrator. Practically, that means store-level or branch employees are not themselves treated as licensees for purposes of the California Financing Law — a baseline rule that remains unchanged and is important for licensing scope and enforcement targeting.
Exception when employees act within scope of employment
The amendment preserves the existing exception: when an employee acts within the scope of his or her their employment, the employee is exempt from any law from which the employer is exempt. That language governs whether employee conduct inherits the employer's statutory exemptions and is relevant to litigation and administrative enforcement that turn on whether specific acts were within employment scope.
Operative date retained
Subsection (b) reproduces the operative date — January 1, 2019 — which appears to be carried forward from the current statute. Because AB 2350 makes a stylistic edit only, the retained date functions as legacy text rather than a substantive retroactive change; agencies and counsel should note it exists in the statute so their annotated versions remain consistent with the enacted code.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Branch and frontline employees — the updated wording reduces gendered language in the statute and aligns statutory text with many employers’ gender-neutral workplace policies, removing minor potential for misgendering in official citations.
- Regulatory drafters and in-house counsel — fewer inconsistencies between statute language and modern templates means less housekeeping when updating contracts, employee manuals, and compliance citations.
- Litigators and administrative counsel — cleaner, gender-neutral text marginally reduces opportunities for pedantic challenges based on archaic pronoun usage and simplifies statutory quoting in filings and guidance.
Who Bears the Cost
- Department of Financial Protection and Innovation — minimal administrative cost to update statutory citations, guidance, and online materials to reflect the new wording.
- Compliance teams at licensed lenders and brokers — modest one-time effort to reconcile internal policies, forms, and citation lists with the revised statutory language.
- Law firms and document vendors — small drafting and publishing costs to update precedents, practice guides, and statutory compilations to mirror the amended text.
Key Issues
The Core Tension
The bill balances the legitimate goal of modernizing statutory language and removing gendered phrasing against the risk that even small textual edits invite litigation or administrative friction; updating wording improves clarity and inclusivity but can impose modest compliance and publishing costs and, in edge cases, create debate about whether a change was purely cosmetic or substantively meaningful.
While the amendment is stylistic, even minor textual edits can attract legal scrutiny when litigants seek advantages from any change in wording. Courts examine both text and legislative history when determining whether an amendment affects substantive rights.
Here, the absence of any substantive replacement language or new operative mechanics makes a substantive-change argument unlikely, but not impossible in a particularly contested enforcement or liability case.
Another practical tension arises from the retained operative date (January 1, 2019). Although the amendment is a cleanup, the presence of a pre-2026 operative date in the amended text can cause confusion for practitioners who version-check code sections or assemble chronological compilations.
Agencies and publishers will need to annotate their releases to explain that the date is a carryover and that no retroactive policy shift is implied. Finally, this bill does not address other gendered terminology elsewhere in the Financial Code; stakeholders seeking a comprehensive modernization will need broader statutory revision rather than piecemeal housekeeping acts.
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