Monthly Bulletin – April 2002

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 10

April, 2002

Paul Crayton Selected as Financial Institutions Supervisor

Paul T. Crayton was promoted to Financial Institutions Supervisor for the San Diego Office effective April 17, 2002. Mr. Crayton has been with the department since 1984. He has been a Senior Financial Institutions Examiner since 1989. Mr. Crayton graduated from the University of California at San Diego and holds a law degree from Thomas Jefferson School of Law.

Donald Proctor and David Schmitt Promoted to Senior Financial Institutions Examiner

Donald Proctor and David Schmitt were promoted to the position of Senior Financial Institutions Examiner for the Credit Union Division effective April 1, 2002. Both served most recently as Financial Institutions Examiners in the Credit Union Division. Mr. Proctor joined the State in 1979 and Mr. Schmitt joined in 1989. Prior to the formation of DFI in 1997, Messrs. Proctor and Schmitt were with the Department of Corporations, which formerly supervised credit unions.

OFAC Compliance Imperative for DFI Licensees

The Department of Financial Institutions (DFI) has joined with its federal counterparts to ensure that financial institutions comply with the laws and regulations administered by the Office of Foreign Assets Control (OFAC), a federal agency that administers laws that impose economic sanctions against terrorism sponsoring organizations and international narcotics traffickers.

Each financial institution has a responsibility to establish a compliance program and develop internal audit procedures for the laws and regulations that OFAC administers. The importance of developing a comprehensive internal audit and compliance program cannot be understated. A financial institution that is in non-compliance risks adverse publicity, fines and even criminal penalties.

DFI expects its licensees to become familiar with their responsibilities under the laws and regulations administered by OFAC and to take all necessary steps to ensure compliance. OFAC has identified several steps in setting up a compliance program:

  • Utilizing interdict software that screens every field in incoming payment orders and scans “straight-through” transactions.
  • Designating a compliance officer responsible for monitoring compliance with its programs and an officer responsible for overseeing blocked funds. Formal compliance responsibilities may also be assigned to all operations and system managers.
  • Conducting an in-depth compliance audit of each department at least once a year, either as part of a financial institution’s standard audit or conducted separately.
  • Developing an effective internal communication network for regulatory compliance. This may consist of including regulatory notices and explanations in staff newsletters. Compliance training programs ought to be initiated—reviewing regulations in staff meetings, incorporating compliance requirements into operating procedures and joining with other banks to sponsor seminars.

To learn more, go to the Office of Foreign Assets Control home page at

State-Chartered Credit Unions Notice of Proposed Regulatory Action

The Department has conducted an extensive review of the Credit Union Regulations in order to identify changes which are necessary to (1) clarify the regulations (2) update the regulations to conform to existing law and industry practices, (3) relieve unnecessary regulatory burden, and (4) promote the safe and sound operation of credit unions.

The Department has obtained approval from the Business, Transportation and Housing Agency to file the notice of proposed regulatory action for state-chartered credit unions. The approved notice of the proposed changes was sent by the Department to the Office of Administrative Law (OAL) on April 16, 2002. OAL published the notice in the California Regulatory Notice Register on April 26, 2002.

The Commissioner of Financial Institutions proposes to add, amend, and repeal regulations to Subchapter 30 (commencing with Section 30.1) of Chapter 1 of Title 10 of the California Code of Regulations (Credit Union Regulations). Some of the proposed changes would: (1) adopt application procedures regarding approval of the expansion of a field of membership of a credit union; (2) provide for an expedited application process for expansions of a credit union’s field of membership; (3) adopt the hold periods established in Regulation CC of the Board of Governors of the Federal Reserve System with respect to items deposited into accounts maintained in California by state and federal credit unions; (4) lower the permissible level of aggregate investments in certain types of real property, personal property, and equity investments; (5) establish new guidelines on charge-offs and (6) conform the Credit Union Regulations to generally accepted accounting principles.

Attached to this Monthly Bulletin is a copy of the Notice of Proposed Regulatory Action. The text of the changes and the Initial Statement of Reasons is on the Department’s Website. Any interested person or any authorized representative of an interested person may request, in writing, a public hearing. Such requests must be received by either of the Department’s contact persons, Kenneth Sayre-Peterson or Sheila Sakamoto, at 916-323-7013 no later than 15 days prior to the close of the public comment period, or not later than June 3, 2002.

Planning a Credit Union Name Change?

Many credit unions have filed for approval to change their name recently. The Department of Financial Institutions (“DFI”) would like to remind credit unions of Financial Code Section 14101.2(b), which states “The Secretary of State shall not file the articles unless the approval of the commissioner is endorsed thereon.” This includes amendments to existing Articles of Incorporation.

The Office of Secretary of State will no longer accept amendments to Articles of Incorporation without proper endorsement by the Commissioner of DFI. When submitting a request to DFI for approval of a name change, please include a minimum of 2 copies of the original amendment to the Articles of Incorporation for endorsement by the Commissioner. The endorsed Articles will be returned to you for filing with the Office of Secretary of State. Once filed with the Secretary of State, a certified copy of the amended Articles of Incorporation must be submitted to the Commissioner of DFI. Upon receipt of the certified amendment to the Articles of Incorporation, DFI will issue an amended Certificate of Authorization to Act as a Credit Union which will reflect the new name of your credit union.

You are reminded that the bylaws of the credit union need to be amended to reflect the new name of the credit union. Please also keep in mind that the Commissioner’s Regulations require that bylaw amendments are to be submitted in draft for the Commissioner’s approval prior to their adoption by the board of directors. (10 CCR 30.103)

Field of Membership Data to be Published in the Monthly Bulletin

Starting this month, the number of field of membership approvals will be published in the Monthly Activity Report section of the Monthly Bulletin, under the heading “Credit Union Activity”.

Monthly Activity Report

Commercial Bank Activity

New Banks

Coast Commerce Bank
Proposed Location: In the vicinity of 296 H Street, Suite 100, Chula Vista, San Diego County
Correspondent: Larry L. Benthien
Proposed Director, President & Chief Executive Officer
Phone: (619) 425-2952
Filed: 4/24/02

Commercial Bank of California
Proposed Location: at the intersection of Bristol Street and Town Center Drive,
Costa Mesa, Orange County
Correspondent: K. P. Balkrishna
1041 Henrietta Circle, Placentia, CA 92870
Phone: (714) 577-8276
Filed: 4/11/02

Continental Bank of America
Proposed Location: in the vicinity of Gale Avenue and Fullerton Road, City of Industry/Rowland Heights, Los Angeles County
Correspondent: Gary Steven Findley, Esq.
Gary Steven Findley & Associates
1470 North Hundley Street, Anaheim, CA 92806
Phone: (714) 630-7136
Filed: 4/8/02

Horizon Bank
Proposed Location: in the vicinity of Ventura Boulevard and Balboa Avenue, Encino, Los Angeles County
Correspondent: S. Alan Rosen, Esq.
Horgan, Rosen, Beckham & Coren, L.L.P.
21700 Oxnard Street, Suite 1400
Woodland Hills, CA 91367
Phone: (818) 340-6100
Withdrawn: 4/1/02

New CCB Bank
14685 Mono Way, Sonora, Tuolumne County
Officers: Gary D. Gall, President and Chief Executive Officer;
Damon Woodward, Senior Vice President and Chief Financial Officer;
Philip S. Wood, Corporate Secretary
Phone: (209) 536-9900
Opened: 4/1/02
(In connection with merger of Central California Bank with and into New CCB Bank and acquisition of control of Central California Bank by Western Sierra Bancorp)


Central California Bank, Sonora, with and into New CCB Bank, Sonora, with a change of name of the resulting institution to Central California Bank
Effected: 4/1/02

Kerman State Bank, Kerman, with and into Westamerica Bank, San Rafael
Filed: 4/1/02

Palomar Community Bank, Escondido, with and into Redlands Centennial Bank, Redlands.
Approved: 4/11/02

Santa Barbara Bank & Trust, Santa Barbara, with and into New Pacific Capital Bank, N.A. Santa Barbara, with a change of name of the resulting institution to Pacific Capital Bank, N.A.
Effected: 3/29/02

United California Bank, Los Angeles, with and into Bank of the West, San Francisco
Effected: 4/1/02

Sale of Partial Business Unit

California Bank & Trust, San Diego, to sell the Watsonville and Monterey Branch Offices to First National Bank of Central California, Salinas
Approved: 3/29/02
Effected: 3/29/02

Application for Trust Powers

East-West Bank
415 Huntington Drive, San Marino, Los Angeles County
Withdrawn: 4/17/02

Premium Finance Company Activity

New Premium Finance Company

Blackhorse Premium Finance Corp.
2501 East Chapman Avenue, Suite 100, Fullerton, Orange County
Filed: 4/22/02

Granite Premium Finance, Inc.
2501 East Chapman Avenue, Suite 100, Fullerton, Orange County
Opened: 4/22/02

Premium Assignment Company, II
151 Kalmus Drive, Suite C220, Costa Mesa, Orange County
Opened: 4/8/02

Priority One Premium Finance, Inc.
2501 E Chapman Avenue, Suite 100, Fullerton, Orange County
Opened: 4/17/02

Foreign (Other Nation) Bank Activity

New Office

The Royal Bank of Scotland plc (Representative Office)
425 California Street, Suite 2000, San Francisco, San Francisco County
Opened: 4/8/02

Discontinuance of Offices

The Dai-Ichi Kangyo Bank, Ltd.
350 South Grand Avenue, Suite 1500, Los Angeles, Los Angeles County (Depositary Agency)
Filed: 3/31/02
Approved: 3/27/02
Discontinued: 4/1/02

The Industrial Bank of Japan, Ltd.
350 South Grand Avenue, Suite 1500, Los Angeles, Los Angeles County (Depositary Agency)
Filed: 3/31/02
Approved: 3/27/02
Discontinued: 4/1/02

The Industrial Bank of Japan, Ltd.
One Market Street, Spear Tower, Suite 1610, San Francisco, San Francisco County (Representative Office)
Filed: 3/31/02
Approved: 3/27/02
Discontinued: 4/1/02

P.T. Bank Niaga
660 South Figueroa Street, Suite 1880, Los Angeles, Los Angeles County (Depositary agency)
Filed: 4/3/02
Approved: 4/10/02
Discontinued: 4/19/02

Foreign (Other State) Bank Activity

New Facility

Investors Bank & Trust Company, Boston, Massachusetts (Facility – Insured Bank)
980 9th Street, US Bank Plaza, Sacramento, Sacramento County
Opened: 5/1/01

Credit Union Activity

Conversion to State Charter

Fiscal Federal Credit Union, Glendale, as Fiscal Credit Union
Effected: 4/2/02

Miramar Federal Credit Union, San Diego
Withdrawn: 4/9/02

Steinbeck Federal Credit Union, Salinas, as Steinbeck Credit Union
Effected: 4/18/02


Ventura Texaco Employees Federal Credit Union, Ventura, into Star Energy Credit Union, Bakersfield
Withdrawn: 4/5/02

Field of Membership

Seventeen credit unions received approval to add 51 new fields of membership during March 2002.

Transmitters of Money Abroad Activity

New Transmitter

Antequera Incorporated
Filed: 3/22/02


Commissioner of Financial Institutions

Bulletin for month ended
April, 2002, issued pursuant
to Financial Code, Section 258

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