Monthly Bulletin – September 2001

State of California

Gray Davis, Governor

Business Transportation and Housing Agency
Maria Contreras-Sweet, Secretary

Department of Financial Institutions

California Seal

Monthly Bulletin

Volume 5, Number 3

September, 2001

Arlene Rutherford Appointed Deputy Commissioner

Department of Financial Institutions Commissioner Donald R. Meyer has announced Arlene Rutherford as Deputy Commissioner for the Department of Financial Institutions in charge of the Special Licensees Division effective August 1, 2001.

The Department’s Special Licensees Division oversees California’s transmitters of money abroad, issuers of travelers’ checks, payment instruments and money orders.

Ms. Rutherford joined the California State Banking Department (now the Department of Financial Institutions) as a junior bank examiner in 1970 and was the Deputy Superintendent of Banks, Special Licensees from 1990 to 1996. She has served as Assistant Deputy Commissioner in the San Francisco Regional Office since 1996.

She is a graduate of the University of Santa Clara and earned an MBA from St. Mary’s College. In addition, she obtained a Certificate of Banking with an emphasis in trust from the Pacific Coast Banking School at the University of Washington, Seattle.

Ms. Rutherford will be located in the San Francisco Regional Office at (415) 263-8540 or by email at

Fiduciary Statements Changes for Bank Trust Departments and Independent Trust Companies

In order to facilitate the reporting and supervision of trust activities, the Department of Financial Institutions (DFI) has replaced the current Trust Called Report of Condition (Fiduciary Statement) with a new Schedule T – Fiduciary and Related Services starting December 31, 2001. This action was necessitated because the Federal Financial Institutions Examination Council (FFIEC) recently added a fiduciary statement for commercial banks with trust departments and with trust company subsidiaries to the FFIEC Call Report called Schedule RC-T – Fiduciary and Related Services.

The new Schedule T – Fiduciary and Related Services will be required from each financial institution that has trust powers and each independent trust company, regardless of the amount of fiduciary assets held. A copy of the new Schedule T – Fiduciary and Related Services form together with instructions for completion was mailed to each financial institution that currently files a fiduciary statement with DFI in the September 30, 2001 call report mailing. It can also be found at the DFI Web site,

To the greatest extent possible, the new DFI Schedule T – Fiduciary and Related Services and related instructions are a reflection of the FFIEC Schedule RC-T – Fiduciary and Related Services and related instructions. The principal difference relates to the frequency of the reporting. The new Schedule T – Fiduciary and Related Services contains a confidential section that will not be made available to the public on an individual institution basis.

Independent trust companies will also be required to submit a corporate Trust Company Consolidated Report of Condition and Trust Company Report of Income on a quarterly basis. This is an increase in the frequency of submission of the Report of Income, from semi-annually to quarterly.

For further information, please contact Charlotte Imoto, Assistant Deputy, at (213) 897-2224 or, or Sharon Dunlavey, Assistant to the Chief Examiner, at (858) 642-4240 or

Real Estate Brokerage Activities Questionnaire

A questionnaire was sent to all commercial banks and industrial banks on September 30, 2001 regarding real estate and mortgage brokerage activities. Please complete and return the questionnaire no later than Wednesday, October 31, 2001.

For further information, please contact Sharon Dunlavey, Assistant to the Chief Examiner, at (858) 642-4240 or

Interlocking Boards and Conflicts of Interest for Credit Unions

The California Credit Union League (CCUL) recently published an article entitled, "Interlocking Boards and Conflicts of Interest" in its July 2001 edition of DIGEST. This article, written by Joseph A. McDonald, VP and General Counsel of CCUL, points out that there do not appear to be any prohibitions to a person serving as a director of more than one credit union. It goes on to point out, however, conflict of interest issues that may be presented if a credit union does in fact have directors who serve on the boards of more than one credit union. In the past, when some credit unions considered this situation they decided to amend their bylaws to prohibit a director from serving on the board of more than one credit union. If a credit union were to choose to restrict the ability of a board member – or other official – to serve on more than one board at a time, the following is a sample of a bylaw amendment that has been approved by the Department for that purpose:

507 – Qualifications of Directors:

Sec. 507. No person shall be a director who simultaneously serves as an officer or on the board of another financial institution where such service would present a substantial conflict of interest. Each board member shall be a member of this credit union in his or her own right and shall be at least eighteen (18) years of age.

Commercial Bank Activity

New Banks

Discovery Valley Bank
1145 San Marino Drive
San Marcos, San Diego County 92069
James P. Kelley, II, President and Chief Executive Officer; Joseph C. Carona, Executive Vice President & Chief Administrative Officer; LouEllen Ficke, Executive Vice President & Chief Financial Officer; Randy Caldwell, Executive Vice President & Chief Credit Officer
Phone: (760) 736-8900
Capitalization: $7,952,980.00
Opened: 9/19/01

Montecito Interim Bank
Proposed: Location: 1010 State Street, Santa Barbara, Santa Barbara County
Correspondent: Madge S. Beletsky, Esq.
Fried, Bird & Crumpacker
1900 Avenue of the Stars, 25th Floor
Los Angeles, CA 90067
Phone: (310) 551-7400
Approved: 9/19/01
(Application filed in connection with the merger of Valley Oaks National Bank, Solvang with and into Montecito Bank & Trust, Montecito)

Premier Service Bank
3637 Arlington Avenue
Riverside, Riverside County 92506
Kerry L. Pendergast, President & Chief Executive Officer, William E. Diethrich, Executive Vice President & Chief Credit Officer, F. Dean Fletcher, Senior Vice President & Chief Financial Officer
Phone (909) 274-2400
Capitalization: $10,320,580.00
Opened: 9/10/01

Sand Hill Private Bank & Trust Company
Proposed Location: in the vicinity of Sand Hill Road, Menlo Park, San Mateo County
Correspondent: John H. Sears
Sheppard, Mullin, Richter & Hampton LLP
4 Embarcadero Center, 17th Floor
San Francisco, CA 94111
Phone: (415) 434-9100
Withdrawn: 7/2/01


American Commercial Bank, Ventura with and into Mid-State Bank & Trust, Arroyo Grande
Approved: 9/2101

Los Robles Bank, Thousand Oaks, with and into Santa Barbara Bank & Trust, Santa Barbara
Filed: 5/30/00
Approved: 6/28/00
Effected: 5/31/01

Metro Commerce Bank, San Rafael with and into Business Bank of California, San Bernardino
Filed: 9/26/01

Valley Oaks National Bank, Solvang with and into Montecito Bank & Trust, Montecito
Approved: 9/19/01

Conversion to State Charter

Six Rivers National Bank, Eureka to convert to a state-chartered bank as "Six Rivers Bank"
Approved: 9/13/01

Acquisitions of Branch Offices

Heritage Oaks Bank, Paso Robles to acquire the Arroyo Grande, Morro Bay, Paso Robles and San Luis Obispo Offices of Westamerica Bank, San Rafael
Approved: 9/25/01

Vineyard Bank, Rancho Cucamonga to acquire the LaVerne Office of Pacific Business Bank, Santa Fe Springs
Filed: 9/10/01

Application for Trust Powers

Community Bank of San Joaquin
22 West Yokuts Avenue
Stockton, San Joaquin County
Effected: 9/13/01

Industrial Bank Activity


Westcoast Savings and Loan Association, Seal Beach with and into Affinity Bank, Ventura
Filed: 9/12/01

Industrial Loan Company Activity

New Premium Finance Companies

AFCO Premium Acceptance, Inc.
21800 Oxnard Street
Woodland Hills, Los Angeles County 91367
Opened: 9/12/01

Newport Premium Finance, Inc.
2501 E. Chapman Avenue, Suite 100
Fullerton, Orange County
Filed: 9/6/01

Credit Union Activity

Conversion to State Charter

Pacific Bay Credit Union, Oakland as Pacific Bay Credit Union
Effected: 9/12/01


Commissioner of Financial Institutions

Bulletin for month ended
September, 2001, issued pursuant
to Financial Code, Section 258

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