DFI Monthly Bulletin – May 2003
Volume 6, Number 11
DFI to Stop Mailing the Monthly Bulletin
Publication to be distributed by e-mail, DFI Web site
The Department of Financial Institutions (DFI) will stop mailing the Monthly Bulletin. This will enable
DFI to significantly reduce its publication costs and help preserve natural resources.
Subscribers are invited to continue receiving the Bulletin by e-mail. Licensees who are not currently on
the list will receive a notice with instructions on how to subscribe. The public list is open to all. For an
e-mail subscription to the Bulletin, go to the subscription form on the DFI Web site at
www.dfi.ca.gov/bulletin/subscription/public.asp, fill in the requested information and click the subscribe
button. An e-mail message asking you to confirm your subscription will be sent to the address you
provided. Respond as instructed, and your e-mail address will be added to the list. Once you have been
confirmed, you will receive a second e-mail message with instructions on how to unsubscribe, etc.
It is now possible for subscribe/unsubscribe requests to be processed automatically. To subscribe by email, send a blank message to firstname.lastname@example.org and confirm the subscription
request as instructed above. To unsubscribe, send a blank e-mail message to email@example.com. The Monthly Bulletin is also posted on the DFI Web site at
http://www.dfi.ca.gov/bulletin/current.pdf. Questions or comments about the new policy may be
addressed to the list administration team at firstname.lastname@example.org or by calling Patrick Carroll, Strategic
Support Manager at (415) 263-8559.
2 Monthly Bulletin May, 2003
OCC, OTS and FRB Issue Interagency
Statement re Sarbanes-Oxley Compliance
Regulators do not plan to apply Sarbanes-Oxley to nonpublic banks
The OCC, OTS, and FRB jointly issued an Interagency Statement on the Application of Recent
Corporate Governance Initiatives to Non-Public Banking Organizations. The interagency statement was
prepared in response to questions the agencies have received concerning whether they intend to require
banking organizations that are not public companies to comply with the provisions of the SarbanesOxley Act. In the joint statement, the regulators said they will not extend rules governing board
composition, director independence, audit committees, auditor independence, or other corporate
governance requirements to privately held banks. The statement noted that public or private banks with
assets over $500 million, must comply with the Federal Deposit Insurance Act provisions which
resemble those of Sabanes-Oxley on auditing procedures. In addition, bank call reports and thrift
financial reports hold institutions to strict standards on accounting. The FDIC issued similar guidance on
March 5, Effect of the Sarbanes-Oxley Act of 2002 on Insured Depository Institutions.
Personal Information and Privacy
Licensees are urged to fully review Sections 1798.82 and 1798.84 of the Civil Code (SB 1386)
regarding the privacy of customer personal information.
Effective July 1, 2003, any licensee that owns or licenses computerized data that includes personal
information must disclose a breach of security of that system to a California customer if that customers’
unencrypted personal information was, or is reasonably believed to have been, obtained by an
unauthorized person. A licensee who violates section 1798.82 may be liable for damages and/or
enjoined from further violations.
Licensees are urged to fully review the new statutes to ensure compliance.
Bank Enterprise Awards
The Community Development Financial Institutions Fund is offering monetary incentives through its
Bank Enterprise Award Program to certain eligible FDIC-insured institutions that comply with the
program’s requirements and submit an application for consideration. Applications are due on July 23,
The Community Development Financial Institutions (CDFI) Fund will award $18 million this year in
financial incentives through its Bank Enterprise Award (BEA) Program to certain eligible FDIC-insured
institutions that comply with the program’s requirements and submit an application for consideration.
The CDFI Fund is a program administered by the Department of the Treasury that was created by
Congress to expand the availability of credit, investment capital and financial services in distressed
urban and rural communities. Applications for the BEA Awards will be accepted through July 23, 2003 .
3 Monthly Bulletin May, 2003
In addition to CRA consideration as community development activities, investments in and loans to a
CDFI may make an FDIC-insured institution eligible for monetary incentives under the BEA Program.
The program complements the community development activities of traditional banks and thrifts by
providing financial incentives to expand investments in CDFIs and to increase lending, investment and
services activities within economically distressed communities. The BEA Program provides awards to
eligible institutions based on a prioritized ranking of the type of investment or activity, with equity
investments and deposits receiving primary consideration. Awards are provided on an annual basis, and
eligible institutions must comply with the requirements of the program and submit an application for
consideration. Every eligible institution is not guaranteed an award. Further information about the BEA
Program is available on the CDFI Fund’s Web site at http://www.cdfifund.gov/programs/BEA/index.asp.
Business Continuity Planning
On May 20, 2000 the Federal Financial Institutions Examination Council (FFIEC) issued revised
guidance for examiners and financial institutions on business continuity planning. The Business
Continuity Planning Booklet provides guidance and examination procedures to assist examiners in
evaluating financial institution and service provider risk management processes to ensure the
availability of critical financial services. Sound business continuity plans allow financial institutions to
respond to such adverse events as natural disasters, technological failures, human error, and terrorism.
Financial institutions must be able to restore information systems, operations, and customer services
quickly after any adverse event. It is important that business operations be resilient and that customer
service disruptions be minimal.
Credit Union Redistricting Plan Approved
Deputy Commissioner Elizabeth J. Dooley approved a plan effective May 12, 2003 to divide
responsibility for regulatory oversight of California state-chartered credit unions from two districts into
three. This coincides with the division of the credit union staff into three work teams. An Assistant
Deputy Commissioner and Financial Institutions Supervisor will lead each Credit Union Division
Previously, the credit union assignments were regionally based. The plan approved by Deputy
Commissioner Dooley takes into consideration such factors as size, financial condition, and geographic
location. Letters notifying each credit union as to which district it has been assigned will be mailed
Annual Fee Reminder
The following institution types are reminded that annual fees are due in this office on or before July 1,
2003. Please remit fees payable the Department of Financial Institutions at:
Department of Financial Institutions
111 Pine Street, #1100
San Francisco, CA 94111-5613
4 Monthly Bulletin May, 2003
Representative offices of foreign (other nation) banks
The annual representative license fee for fiscal year 2003/2004 is due on or before July 1, 2003.
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, 2003.
Those foreign (other nation) banks which also maintain agency or branch offices in California are
not subject to this fee. Please remit fees to the attention of Patrick Carroll at the above address. For
questions about fees, call (415) 263-8559 or e-mail email@example.com.
Branch offices of foreign (other state) state banks
The annual fee for fiscal year 2003/2004 is due on or before July 1, 2003. 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. Please remit fees to the attention of Patrick Carroll at the above
address. For questions about fees, call (415) 263-8559 or e-mail firstname.lastname@example.org.
Facilities of foreign (other state) banks
The annual fee for fiscal year 2003/2004 is due on or before July 1, 2003. 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, 2003.
Those foreign (other state) banks which also maintain branch offices in California are not subject to this
fee. Please remit fees to the attention of Patrick Carroll at the above address. For questions about fees,
call (415) 263-8559 or e-mail email@example.com.
Transmitters of money abroad
The annual fees for fiscal year 2003/2004 are due on or before July 1, 2003. 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. Please remit fees to the attention of Julio Prada at the above address. For
questions about fees call (415) 263-8540 or e-mail firstname.lastname@example.org.
Business and Industrial Development Corporation (BIDCO)
The annual license fee for fiscal year 2003/2004 is due on or before July 1, 2003. The fee, as outlined in
Section 31115(a)(6), is $2,000.00 for each BIDCO doing business as of June 1, 2003. Please remit fees
to the attention of Patrick Carroll at the above address. For questions about fees, call (415) 263-8559 or
5 Monthly Bulletin May, 2003
IRS Invites Financial Institutions To Join
EFTPS Marketing Campaign
Federal tax payments via electronic funds transfer
The Internal Revenue Service (IRS) wants to partner with local banks to promote the use of the
Electronic Federal Tax Payment System, known as EFTPS. EFTPS is a way for business and individual
taxpayers to make all their federal tax payments via electronic funds transfer instead of checks and paper
coupons. Not only is EFTPS easier and more efficient, businesses having more than $200,000 of
depository taxes in 2001 are required to use EFTPS in 2003 and all future years. All businesses and
individuals, however, may use EFTPS.
The IRS is launching a new marketing campaign designed to boost enrollment in and use of EFTPS, a
free service that compliments other electronic services your bank may offer to small business customers.
The greatest benefits to your bank are improving customer service and focusing bank resources on
achieving a greater efficiency.
EFTPS is an efficient, accurate and quick way for businesses and individuals to pay employment,
income, estimated and excise taxes. Many taxpayers simply don’t know about this option and continue
to use paper Federal Tax Deposit Coupons 8109 coupons and checks, rather than initiate electronic
funds transfers by going online or making a toll-free phone call.
One bank estimated that processing paper coupons costs two to four dollars each. Small business
taxpayers also pay the hidden cost of visiting a bank branch and waiting in line to deposit their payroll
and other federal taxes. EFTPS is more efficient both for banks and taxpayers.
The IRS, which has an interest in helping businesses stay current with their tax payments, has initiated a
two-pronged marketing program to increase the use of EFTPS. We are asking local banks to promote
EFTPS to small businesses opening new business checking accounts. Also, we are asking local banks to
promote EFTPS to small businesses that make employment tax and other business tax deposits in the
New account holders frequently look to the bank as a source of information on both the practical aspects
and tax responsibilities for their new businesses. Banks benefit by marketing EFTPS and other free IRS
resources to new account holders who need help to understand and to keep current with their tax
obligations. The branch can utilize free products and services provided by the IRS to address frequently
asked questions about business taxes. Other free IRS resources for small businesses include the Small
Business Resource Guide on CD-ROM and the new EIN-Online service.
Similarly, banks benefit by marketing EFTPS to current account holders. Using EFTPS not only reduces
foot traffic in their branches but also maintains excellent customer service by exposing customers to free
online services and tax resources about which these customers might not otherwise be aware. A similar
marketing initiative in Oregon demonstrated that banks decreased their processing of paper federal tax
deposit coupons by a minimum of 13% by promoting the use of EFTPS. At the same time, banks
6 Monthly Bulletin May, 2003
increased customer satisfaction due to the ease, convenience, flexibility, security, accuracy and time
saving features of EFTPS.
Businesses and individuals wanting to make tax deposits by phone or computer must first enroll in
EFTPS. Using EFTPS is free and requires no special equipment. EFTPS enrollment can be completed
online at www.eftps.gov. Taxpayers may also enroll by calling (800) 945-8400 or (800) 555-4477.
In short, the IRS marketing project offers banks the opportunity to provide an important service to their
customers while reducing paper-processing costs, and decreasing foot traffic at the bank. Financial
institutions interested in participating in the EFTPS marketing campaign should contact any one of the
IRS specialists listed below:
Bay Area: Terri Malone 510-637-2621
Fresno: Alexis Lindauer 559-271-6150
Laguna Niguel: Shana Hart 562-980-3308
Los Angeles: Georgina Espinosa 626-312-5144
Sacramento: Rita Palacios-Rader 916-974-5050
San Bernadino: Amy Smith 909-388-8234
San Diego: Nina Walker 619-557-5631
San Jose: James Kinsey 408-817-6842.
For EFTPS resources on the Web, go to http://www.irs.gov/efile/article/0,,id=98005,00.html. The TDD
hearing-impaired number is (800) 945-8900 or (800) 733-4829. The EFTPS Customer Service number
for assistance in Spanish is (800) 945-8600 or (800) 244-4829.
Commercial Bank Activity
Bay Business Bank
Proposed location: in the vicinity of 2999 Oak Road, Walnut Creek, Contra Costa County
Correspondent: Maryam Hamzeh
Carpenter & Company
5 Park Plaza, Suite 950
Irvine, CA 92614
Phone: (949) 261-8888
Commercial Bank of California
695 Town Center Drive, Suite 100, Costa Mesa, Orange County
Web site: www.combancal.com
Officers: K.P. Bala Balkrishna, President and Chief Executive Officer
Paul E. Adkins, Senior Vice President and Chief Financial Officer
Carl P. Patsko, Senior Vice President and Chief Credit Officer
7 Monthly Bulletin May, 2003
New Banks (Continued)
Diablo Valley Bank
Proposed location: in the vicinity of San Ramon Valley Boulevard and Hartz Way, Danville, Contra
Correspondent: Mr. James H. Avery
James H. Avery Company
PO Box 3009
San Luis Obispo, CA 93403
Phone: (805) 544-5477
Torrey Pines Bank
550 West C Street, Suite 100, San Diego, San Diego County
Web site: www.torreypinesbank.com (under construction)
Officers: Gary Cady, President
Robert Sarver, Chairman and Chief Executive Officer
Phil Fowler, Chief Financial Officer
Phone: (619) 233-2500
Purchase of Partial Business Unit
Cathay Bank, Los Angeles, to acquire the New York Branch of CITIC International Financial Holdings
Limited, dba CITIC Ka Wah Bank Limited, New York
Acquisition of Control
America Bancshares, Inc. to acquire control of Sun Country Bank, Victorville
Citizens Bancorp, to acquire control of Citizens Bank of Nevada County, Nevada City
8 Monthly Bulletin May, 2003
Savings and Loan Association Activity
Acquisition of Control
Malaga Financial Corporation, to acquire control of Malaga Bank, S.S.B., Palos Verdes Estates, through
merger with Malaga Merger Corporation
(The merger of Malaga Merger Corporation with and into Malaga Bank, S.S.B., Parlos Verdes Estates
Premium Finance Company Activity
New Premium Finance Companies
Capitol Payment Plan of California, Inc.
21820 Burbank Boulevard, Suite 300, Woodland Hills, CA 91367
Focus Premium Finance Company
6046 Cornerstone Court West, Suite 202, San Diego, San Diego County
Mid-America Premium Finance Company West
6046 Cornerstone Court West, San Diego, San Diego County
PFS Financing Corp. of California
601 South Glenoaks Boulevard, Suite 403, Burbank, Los Angeles County
RSA Premium Finance Company
2501 East Chapman Avenue, Suite 100, Fullerton, Orange County
Snowcrest Funding, Inc.
2501 East Chapman Avenue, Suite 100, Fullerton, Orange County
Voluntary Surrender of License
Fremont Premium Finance Corporation
2020 Santa Monica Boulevard, Santa Monica, Los Angeles County
9 Monthly Bulletin May, 2003
Foreign (Other Nation) Bank Activity
Change of Name
Thai Farmers Bank Public Company Limited, to Kasikornbank PCL
Foreign (Other State) Bank Activity
Franklin Bank S.S.B. (Facility – Insured Bank)
23001 Del Lago Drive, Suite D-2, Laguna Hills, Orange County
177 W. Henderson Avenue, Suites 3 & 4, Porterville, Tulare County
Credit Union Activity
Franklin-Media Credit Union, Oakland, into Meriwest Credit Union, San Jose
Los Robles Federal Credit Union, Thousand Oaks, into Ventura County Credit Union, Ventura
San Gabriel Valley Credit Union, Walnut, into Credit Union of Southern California, Brea
Super U Credit Union, Sacramento, into California Community Credit Union, Sacramento
Field of Membership
Seven credit unions received approvals to add 12 new fields of membership during April 2003.
Six credit unions received approvals for six bylaw amendments during April 2003.
10 Monthly Bulletin May, 2003
Transmitter of Money Abroad Activity
Samso’s Express Money Transfer, Inc.
DONALD R. MEYER
Commissioner of Financial Institutions
Bulletin for Month ended
May 2003, issued pursuant
to Financial Code, Section 258
The Monthly Bulletin is available without charge via e-mail. To subscribe, go to http://www.dfi.ca.gov/bulletin/subscription/public.asp To
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