A California borrower proves a willful and knowing covered-loan violation. Which recovery does Financial Code section 4978 provide?
Correct Answer
B) Actual damages or $15,000, whichever is greater, plus attorney fees and costs
For willful and knowing covered-loan violations, Financial Code section 4978 provides actual damages or $15,000, whichever is greater, plus attorney fees and costs.
Why This Is the Correct Answer
For willful and knowing covered-loan violations, Financial Code section 4978 provides actual damages or $15,000, whichever is greater, plus attorney fees and costs.
Why the Other Options Are Wrong
Option A: Only the excess fee charged
Recovery is not limited to excess fees. The full range of damages and attorney's fees is available.
Option C: Triple damages only, with no attorney fees
Triple damages are not the specific remedy under CFL §4979. The statute provides actual plus statutory damages.
Option D: No private recovery once the loan closes
Rescission is not the sole remedy. Additional damages and attorney's fees are available.
Memory Technique
CA -> ca-covered-loans-high-cost-consumer-protections
Exam Tip
Covered-loan questions often test the 8-point APR trigger, 6 percent points-and-fees trigger, principal-dwelling scope, Consumer Caution notice timing, ATR, prepayment penalty limits, prohibited loan terms, and remedies.
Common Mistakes to Avoid
- -Using a national baseline answer when California has agency-specific DFPI or DRE requirements
- -Confusing CFL, CRMLA, covered-loan, usury, servicing, and DRE endorsement rules
- -Relying on legacy California state-exam or education assumptions instead of current NMLS source pages
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