State of California
|Gray Davis, Governor||
Business Transportation and Housing Agency
|Department of Financial Institutions||
|Volume 5, Number 11||
Extraordinary Situation – Terrorism
As a result of the September 11, 2001 coordinated terrorist attacks on facilities in New York, Washington D.C. and Pennsylvania, the President declared a national emergency, and issued an Executive Order on September 24, 2001 blocking property and prohibiting transactions with persons who commit, threaten to commit, or support terrorism. On October 26, 2001 the President signed the USA PATRIOT ACT (“Act”) which contain measures to prevent, detect, and prosecute terrorism and international money laundering.
On October 11, 2001 Governor Gray Davis ordered the California State Strategic Committee on Terrorism (“SSCOT”) to, among other things: evaluate the potential of terrorist attack; review California’s current state of readiness to prevent and respond to a potential attack; and establish and prioritize recommendations for prevention and response. Based upon this directive, all Department licensees are instructed to comply with the following:
Board Resolution: Review of Personnel Policies
Given the level of sophistication of the terrorist attacks, it is conceivable that terrorists may attempt to gain access to financial institutions and money services businesses by becoming employees. To minimize this possibility, licensee management is directed to review personnel policies dealing with hiring and background checks. These personnel policies shall then be reviewed and approved by the board of directors. A board resolution acknowledging the review and approval of the personnel policies shall be sent to the Department.
For Insured Depository Institutions, it should be noted that Section 355 of the USA PATRIOT ACT provides, notwithstanding any other provisions of law, any insured depository institution, may disclose in any written employment reference relating to a current or former institution-affiliated party of such institution which is provided to another insured depository institution in response to a request from such other institution, information concerning the possible involvement of such institution-affiliated party in potentially unlawful activity. Section 355 does not create any affirmative duty to include such information, and voluntary disclosure that is made with malicious intent, shall not be shielded from liability from the person identified in the disclosure. It may be advisable to review personnel policies with licensee counsel or any appropriate insurance carrier to ensure compliance with all applicable federal and state statutes.
Board Resolution: Review of Business Resumption and Contingency Planning
The terrorist activities of September 11, 2001 vividly illustrate the need for establishing policies, procedures and responsibilities for organization-wide contingency planning, including planning for the recovery of critical external information systems and operations. Business resumption and contingency planning is the process of identifying critical information systems and business functions and developing plans to enable those systems and functions to be resumed in the event of a disruption.
A licensee business resumption and contingency plan should be designed to minimize service disruption and financial loss in the event of a disaster, including terrorist activities. Licensee management is directed to review business resumption and contingency planning policies, and to make whatever changes are warranted by the current situation. Licensee business resumption and contingency planning policies must then be reviewed and approved by the board or directors, with a board resolution acknowledging the review and approval. The resolution shall be sent to the Department.
Of interest to all licensees is The Federal Financial Institutions Examination Council Policy Issuance SP-5 which provides a policy statement on contingency planning and an appendix on the contingency planning process, and can be found at:
http://www.federalreserve.gov/boarddocs/srletters/1997/sr9715.htm (link no longer working)
Board Resolution: Designation of Contact Person
The board of directors of each licensee shall designate one person who will receive information regarding alerts or threats to financial institutions in California. The designated person’s mailing address, e-mail address, telephone number, cellular phone number, and facsimile number shall be included with the designation.
Licensees may consider designating the compliance officer required under the anti-money laundering program to meet this requirement (31 U.S.C. 5318 – financial institutions; and 31 C.F.R. Part 103.125 – money service businesses).
Materials to be Furnished to the Department
Your designation of a contact person, and the resolutions regarding review and approval of personnel policies and business resumption and contingency planning policies, should be sent to the Department by September 30, 2002, at the address noted below. If you are unable to comply with the September 30, 2002 due date because a regular board of directors meeting does not occur prior to that date, or if you have any other questions about the reporting requirements, please contact Patrick Carroll at (415) 263-8559 or by e-mail at firstname.lastname@example.org.
The Department of Financial Institutions
Attention: Patrick Carroll
111 Pine Street, Suite 1100
San Francisco, California 94111-5613
A Note from the Department of Financial Institutions
The Local Agency Security Program: What is it?
The Local Agency Security Program (LASP) was created by the California Legislature in 1969 to help protect the “solvency and creditworthiness of the state and other local agencies within the state.” This program is governed by the California Government Code, Sections 53630 through 53686, and the California Code of Regulations Title 2, Division 4.5, Sections 16001.1.1 through 16010.1.3.
Currently, more than 2,500 local agencies deposit their funds totaling $4.2 billion in approximately 300 depositories, and these numbers are increasing. The potential size of this program can be enormous. For example, there have been estimates of more than 5,000 local agencies in the state and approximately 1,200 financial institutions that can hold local agency funds. Since this program can affect any depository that maintains local agency funds, a definition of these terms is provided.
According to California Government Code, Section 53630, “Depository” means a state or national bank, savings association or federal association, a state or federal credit union, or a federally insured industrial loan company, in this state in which the moneys of a local agency are deposited. “Local agency” means county, city, city and county, including a chartered city or county, a community college district, or other public agency or corporation in this state.
All depositories of local agencies may be required to provide collateral by maintaining eligible securities in pools with an agent of depository. Depositories are also required to file weekly and quarterly “Called Reports” and must report all additions and withdrawals of collateral in the securities pools.
Information concerning the LASP is available on the Internet through the Department of Financial Institutions’ web site (www.dfi.ca.gov). You can find sources for the laws and regulations that pertain to the LASP, access information such as reporting requirements and the due dates for the various reports, and download weekly and called report examples and instructions. If you need more information, you can contact Patrick Lum, Manager of LASP, at (916) 323-7013.
Annual Fee Reminder
The following licensees are reminded that annual fees are due in this office on or before July 1, 2002. Please remit fees to:
Department of Financial Institutions
111 Pine Street, #1100
San Francisco, CA 94111-5613
Attn: Patrick Carroll
Representative Offices of Foreign (Other Nation) Banks
The annual representative license fee for fiscal year 2002/2003 is due on or before July 1, 2002. The fee, as outlined in Section 1702(i) of the California Financial Code, is $250.00 for each California representative office of a foreign (other nation) bank doing business as of June 1, 2002. Those foreign (other nation) banks which also maintain agency or branch offices in California are not subject to this fee. Questions regarding fees may be directed to Patrick Carroll at (415) 263-8559 or by e-mail to email@example.com.
Branch Offices of Foreign (Other State) State Banks
The annual fee for fiscal year 2002/2003 is due on or before July 1, 2002. The fee, as outlined in Section 3804(d) of the California Financial Code, is $1,000.00 per California branch office; provided, however that the minimum fee shall not be less than $3,000.00 and the maximum fee shall not be more than $50,000.00. Questions regarding fees may be directed to Patrick Carroll at (415) 263-8559 or by e-mail to firstname.lastname@example.org.
Facilities of Foreign (Other State) Banks
The annual fee for fiscal year 2002/2003 is due on or before July 1, 2002. The fee, as outlined in Section 3804 (e) of the California Financial Code, is $250.00 for each facility doing business as of June 1, 2002. Those foreign (other state) banks which also maintain branch offices in California are not subject to this fee. Questions regarding fees may be directed to Patrick Carroll at (415) 263-8559 or by e-mail to email@example.com.
Facilities of Foreign (Other State) Industrial Banks
The annual fee for fiscal year 2002/2003 is due on or before July 1, 2002. The fee, as outlined in Section 18664 (b) of the California Financial Code, is $250.00 for each facility doing business as of June 1, 2002. Those foreign (other state) banks which also maintain branch offices in California are not subject to this fee. Questions regarding fees may be directed to Patrick Carroll at (415) 263-8559 or by e-mail to firstname.lastname@example.org.
Transmitters of Money Abroad
The annual fees for fiscal year 2002/2003 are due on or before July 1, 2002. The fees, as outlined in Section 1801(a) of the California Financial Code, are: $2,500.00 for each transmitter of money abroad license; $125.00 for each licensee branch office; $25.00 for each agent headquarters office, and $25.00 for each agent branch office. Questions about transmitter of money abroad fees may be directed to Julio Prada at (415) 263-8590 or by e-mail to email@example.com.
Business and Industrial Development Corporation (BIDCO)
The annual license fee for fiscal year 2002/2003 is due on or before July 1, 2002. The fee, as outlined in Section 31115(a)(6), is $2,000.00 for each BIDCO doing business as of June 1, 2002. Questions regarding fees may be directed to Patrick Carroll at (415) 263-8559 or by e-mail to firstname.lastname@example.org.
Commercial Bank Activity
Capitol Valley Bank, Roseville, with and into Humboldt Bank, Eureka
Cerritos Valley Bank, Artesia, with and into Bank of Orange County, Orange
Tehama Bank, Red Bluff, with and into Humboldt Bank, Eureka
Purchase of Partial Business Unit
Bank of Agriculture & Commerce, Stockton, to acquire the Concord and Antioch Branches of City National Bank, Beverly Hills
First Bank & Trust, San Francisco, to acquire the Denton and Garland Branches of Jefferson Heritage Bank, Denton, Texas, and Union Planters Bank N.A., Memphis, Tennessee
(Jefferson Heritage Bank, Denton, Texas, will merge with and into Union Planters Bank N.A., Memphis, Tennessee, immediately prior to the transaction.)
Application for Trust Powers
First Northern Bank of Dixon
195 N. First Street, Dixon, Solano County
Premium Finance Company Activity
New Premium Finance Company
Ladera Premium Finance Co.
2501 East Chapman Avenue, Suite 100, Fullerton, Orange County
Credit Union Activity
Harbor Japanese Credit Union, Long Beach, into L.A. Southwest Japanese Credit Unioin, Los Angeles
Inland Empire Credit Union, Pomona, into Pomona Valley Credit Union, Pomona
Field of Membership
Twelve credit unions received approvals to add 37 new fields of membership during April 2002.
Ten credit unions received approvals for 14 bylaw amendments during April 2002.
Four credit unions received approvals for requests for variances to sections of the California Code of Regulations during April 2002.
DONALD R. MEYER
Commissioner of Financial Institutions
Bulletin for month ended
May, 2002, issued pursuant
to Financial Code, Section 258
The Monthly Bulletin is available without charge via email as a PDF attachment. To subscribe, please send e-mail with your name, e-mail address, and company name and phone number to email@example.com.
|111 Pine Street, Suite 11, San Francisco, CA 94111-5613||(415) 263-8550|
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|Consumer Compliance||(800) 622-0620|
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