State of California
|Gray Davis, Governor||
Business Transportation and Housing Agency
|Department of Financial Institutions||
|Volume 6, Number 4||
Highlights of 2001 Legislation
DFI Sponsored Bills
AB 2157 Papan (Chapter 734). Credit unions. This bill cleans up the Credit Union law and creates Credit Union enforcement powers parity with similar authority the Commissioner has for banks. Also, this bill lays the groundwork for future changes to the Credit Union law. (Urgency statute; effective 9/21/02.)
Bills Potentially Affecting DFI and/or DFI Licensees
Effective January 1, 2003 unless otherwise indicated
AB 551 Papan (Chapter 1162). Industrial Banks. This bill prohibits a person from acquiring control of an industrial bank unless the person is engaged only in the activities that are permitted for a financial holding company as provided in federal law or the person is a credit union service organization as provided in state law.
AB 1893 Papan (Chapter 158). Commercial Banks. This bill adds another exception for obligations secured by a segregated deposit account in a lending bank provided the security interest in the deposit has been perfected and meets specified conditions. This exception already exists for federally chartered banks. http://www.leginfo.ca.gov/pub/bill/asm/ab_1851-1900/ab_1893_bill_20020712_chaptered.html
ACR 125 Papan (Chapter 167). Financial Privacy. This measure authorizes the CA law Revision Commission to study and report on recommended legislation for financial privacy.
AB 227 Dutra (Chapter 22). Unclaimed Property. This bill extends the deadline for paying or delivering unclaimed property to the Controller to December 31, 2002, subject to specified conditions. (Urgency statute; effective 4/18/02 with specified implementation dates.)
AB 690 Wiggins (Chapter 939). State Assistance Fund for Enterprise, Business, and Industrial Development Corporation. This bill provides that the State Assistance Fund for Enterprise, Business, and Industrial Development Corporation (SAFE-BIDCO) will meet the definition of a financial development corporation under the California Organized Investment Network (COIN) so that SAFE-BIDCO may offer the tax credit provided under COIN to its depositors. (Urgency statute; effective 9/28/02.)
AB 1772 Harman (Chapter 813). Escheat: financial accounts. This bill requires specified information to be included in the notification from a financial institution to its customer regarding escheatment of their funds to the state to be changed by using bold and increased font size. In addition, this bill adds additional information to the notice and requires that the date of last activity on the account, the type of deposit, and a sentence explaining the law and reason for the escheatment of the property, be included in the notice.
AB 2331 Wayne (Chapter 815). Waivers: obligations: consumers. This bill adds anti-waiver provisions to specified consumer protection statutes, thereby clearly establishing which consumer laws cannot be waived by any person to whom these statutes apply.
AB 2126 Pacheco (Chapter 433). Trust companies: investments. This bill changes the time frame in which a trust company or department must provide a securities prospectus to its trust beneficiaries and other related persons for whom a trust company or department provides service, unless specifically waived in writing.
AB 2984 Insurance Committee (Chapter 203). Insurance: depository institutions: production agencies: surplus line brokers: reinsurance intermediaries. This bill sets forth provisions in order to comply with standards established under the Federal Financial Services Modernization Act of 1999 (the Gramm-Leach-Bliley Act) that called for increased regulation, by State Insurance regulators, of the retail sales practices, solicitations, advertising, and offers of any insurance product or annuity to a consumer by a depository institution.
SB 898 Perata (Chapter 777). Check Cashers. This bill transfers the regulation of deferred deposit transactions (also known as payday advances) from the Civil Code (as administered by the State Department of Justice) to the Financial Code (as administered by the State Department of Corporations), and makes other substantive changes to the licensing and regulation of persons engaging in the business of making deferred deposit transactions.
SB 1254 Alpert (Chapter 254). Identity Theft. This bill expands the definition of “personal identifying information” under the law, and would also make a person who acquires, transfers, or retains possession of such information for purposes to defraud guilty of a crime. This bill also clarifies language pertaining to the reparation of identity theft victims’ personal records.
SB 1271 Ackerman (Chapter 67). Non-probate transfers: Uniform TOD Security Registration Act. This bill adds “cash equivalents” to the definition of a “security account” as provided under the California probate code. This bill also defines an investment management or custody account with a trust company or trust department of a bank with trust powers to mean the same thing as a “security account”.
SB 1504 Ackerman (Chapter 809). Instruments. This bill addresses three separate areas of law. First, this bill addresses notification of certain entities when a mortgage is placed in default. Second, this bill addresses notification requirements relating to a reconveyance on a mortgage. Finally, this bill amends the definition of cash equivalents under the Uniform TOD Security Registration Act relating to the ownership of a security upon death of its owner.
SB 1617 Karnette (Chapter 862). Credit cards. This bill requires that a credit card issuer, when providing a replacement or substitute credit card, to make available an activation process whereby a credit card holder is required to contact the card issuer to activate the credit card prior to using the card.
SB 1730 Bowen (Chapter 786). Personal information. This bill amends the Consumer Credit Reporting Agencies Act to exempt from existing requirements the use of a consumer credit report by any person or entity administering a credit file monitoring subscription service to which the consumer has subscribed or by any person or entity for the purpose of providing a consumer with a copy of his or her credit report upon the consumer’s request.
New Risk Focused Examination for Credit Unions to be Implemented in 2003
DFI credit union examiners recently attended training on the new Risk-Focused Examination Program developed by the National Credit Union Administration. The trainers at these sessions consisted of both NCUA examiners and state examiners from Iowa who participated in a pilot program. The credit union division is currently reviewing the Risk-Focused Examination Program to determine how best to utilize the benefits of the program for regulatory supervision, as well as how it can be tailored to best serve the needs of the California credit union industry. It is expected that a modified version of the Risk-Focused Examination Program will be implemented in early 2003. The goal of the new examination program is to increase focus on areas of risk.
The Risk-Focused Examination Program is designed to be forward-looking, with more focus on the ability to identify and monitor current and potential areas of risk. This process is designed to include both on-site examinations or visitations and off-site trending of credit unions. It allows examiners the flexibility to allocate examination time to those areas exhibiting weaknesses or adverse trends.
The seven key risk areas are: Credit Risk, Interest Rate Risk, Liquidity Risk, Reputation Risk, Transaction Risk, Compliance Risk and Strategic Risk.
The new risk focused examination approach will rely on data submitted on your 5300 Call Reports. As such, it is extremely important that the data submitted on this report be accurate and reliable. Consequently, at your next examination and going forward, you may notice that our examination staff will perform a thorough review of your 5300 Call Report in order to verify the accuracy of the information.
Credit unions can assist the DFI in completing this task by retaining all back up documentation collected in the preparation of the 5300 Call Report in a format which supports all reported data. For example, examiners will be looking for schedules and other supporting documentation providing the source of the figures shown in the call report. This may include computer generated reports, manual worksheets or statements, or simply, adding machine tapes showing the classification or compilation of data used for each line item reported. Making this information readily available to examination staff will help us be more efficient with our limited examination time, and lessen the burden on your staff in compiling this information a second time when we conduct our review.
Monthly Activity Report
Commercial Bank Activity
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
County Commerce Bank
Proposed Location: 3260 Telegraph Road, Ventura, Ventura County
Correspondent: Gary M. Horgan
Horgan, Rosen, Beckham & Coren
23975 Park Sorrento
Calabasas, CA 91302-4001
Phone: (818) 591-2121
Ventura County Business Bank
Proposed Location: 370 Esplanade Drive, Oxnard, Ventura County
Correspondent: Gerald J. Lukiewski
c/o NAI Capital Commercial
300 Esplanade Drive, Suite 1660
Oxnard, CA 93030
Phone: (805) 278-1400 ext. 114
Conversion to State Charter
Tracy Federal Bank, F.S.B., Tracy, to convert to a state-chartered bank under the name of Community Banks of Tracy
Bank of Canton of California, San Francisco, with and into United Commercial Bank, San Francisco
Chinatrust Savings Bank of Washington, Bellevue, with and into Chinatrust Bank (U.S.A.), Torrance
Bank of Los Altos, Los Altos, with and into Heritage Bank of Commerce, San Jose
Heritage Bank East Bay, Fremont, with and into Heritage Bank of Commerce, San Jose
Heritage Bank South Valley, Morgan Hill, with and into Heritage Bank of Commerce, San Jose
Sale of Partial Business Unit
Bank of Orange County, Orange, to sell its Torrance Branch Office to Bay Cities National Bank, Redondo Beach
Valley Bank, Moreno Valley, to sell the deposit liabilities of its Sun City Office to Provident Savings Bank, F.S.B., Riverside
Acquisition of Control
Gaslight Leasing, Inc., to acquire control of Fremont Bank, Fremont
Greater Sacramento Bancorp, to acquire control of Bank of Sacramento, Sacramento
Rabobank Nederland, to acquire control of Valley Independent Bank, El Centro
Valley Commerce Bancorp, to acquire control of Bank of Visalia, Visalia
Change of Name
Redlands Centennial Bank, Redlands to 1st Centennial Bank
Industrial Bank Activity
Purchase of Partial Business Unit
Imperial Capital Bank, La Jolla, to acquire partial business unit of Southern Pacific Bank, Torrance
Premium Finance Company Activity
New Premium Finance Company
BCIC Premium Finance Company
2501 East Chapman Avenue, Suite 100, Fullerton, Orange County
Foreign (Other Nation) Bank Activity
355 South Grand Avenue, Los Angeles, Los Angeles County (Representative Office)
Foreign (Other State) Bank Activity
City Bank, Honolulu, Hawaii (Facility – Insured Bank)
4590 MacArthur Boulevard, Suite 175, Newport Beach, Orange County
Sunrise Bank of Arizona (Facility – Insured Bank)
4695 MacArthur Court, 11th Floor, Newport Beach, Orange County
Credit Union Activity
Conversion to State Charter
Vandenberg Federal Credit Union, Vandenberg Air Force Base
Providence First Credit Union, Burbank, into Priority One Credit Union, South Pasadena
Steelcase of California Employees Federal Credit Union, Tustin, into Wescom Credit Union, Pasadena
Change of Name
U.F.C.W. Local 1288 Credit Union to change its name to UNITED LOCAL CREDIT UNION
Field of Membership
Ten credit unions received approvals to add 36 new fields of membership during September 2002.
Three credit unions received approvals for three bylaw amendments during September 2002.
One credit union received an approval for a request for variance to sections of the California Code of Regulations during September 2002.
Transmitter of Money Abroad Activity
Acquisiton of Control
eBay, Inc. to acquire control of PayPal, Inc., Mountain View
DONALD R. MEYER
Commissioner of Financial Institutions
Bulletin for month ended
October, 2002, issued pursuant
to Financial Code, Section 258
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