DFI Monthly Bulletin – May 2004

May 1, 2004

Volume 7, Number 11

Senate Confirms Commissioner Howard Gould

Howard Gould was confirmed by the California State Senate as Commissioner of Financial Institutions on
May 17, 2004. Governor Schwarzenegger appointed Gould as Commissioner effective March 2, 2004.
Below are comments from California’s new Commissioner:
“I am pleased to both have the opportunity to serve Governor Schwarzenegger, and to serve California’s
dynamic financial services industry. I am pleased that the California Senate confirmed my appointment
this week and I look forward to the challenges and opportunities ahead. During my confirmation process,
I was asked to provide the Senators a statement of goals I had developed in my first few weeks as
commissioner. I thought that I should share those goals with you as well, so we have replicated below
the memo that I submitted to the Senate. I hope that this helps provide you some insight as to what I
hope to achieve during my tenure with the Department of Financial Institutions.”
Commissioner Gould’s Confirmation Statement
To: Mr. Chairman and Members
Senate Rules Committee
Subject : Statement of Goals
Howard Gould
Commissioner of Financial Institutions
I am pleased to have the opportunity to accept Governor Schwarzenegger’s offer that I join his
Administration, and I seek your confirmation of my appointment, for the very simple reason that I feel I
can add value to the state’s role in financial institution regulation and can bring experienced managerial
expertise to the governmental process.
2 Monthly Bulletin May 2004
I am in a unique stage of professional life wherein my three decades of experience and success in the
financial services sector allows me to now focus only on making a contribution. I believe I can make that
contribution unaffected by any motivation other than to add value and share what expertise I may have
developed. This is the same motivation that led me to become a college professor following retirement
from my banking career.
It is also unique that I held a similar position during the Deukmejian Administration. I believe it is that
experience, plus my decades as a business executive that will allow me to bring valuable perspective to
the Commissioner’s duties. During my career, I have seen financial services from the viewpoints of a
front line business executive, as a regulator, as a legislative consultant, and as a business consultant. In
these various capacities I have dealt with all segments of the financial services industry that I will now
regulate. I have managed and consulted to banks, savings and loans, and industrial banks; I have handled
the failure of banks, savings and loans, industrial banks, and money changers; I’ve been involved in the
regulation of banks, savings and loans, industrial banks and credit unions; and I’ve been the client of
banks and a credit union. This unique set of experiences provides me with broad perspective of this
industry and the dramatic change it is undergoing.
The opportunity the Governor has given me to add value is the core of my single personal and emotional
goal, and that is to leave the Department of Financial Institutions as a significantly more effective
governmental organization when I depart than it was when I arrived. And hopefully to make my presence
felt, in a positive progressive way, to the industries we regulate. This assumes nothing negative in the
department’s status, only the optimism that we can achieve continuous improvement. I will endeavor to
find ways to measure this progress during my tenure.
In addition to that emotional goal, I have two simply stated business goals – namely:
To achieve status for the department as the recognized leader among state financial institution
regulators nationwide, and
To build that leadership on a base of solidly competent people and business practices that allows
us to most effectively protect the clients of our state’s financial institutions.
The first goal – to be #1 among state regulators – is clearly the rightful place for California, given the
nature of our state’s financial services industry, and is within reach. We must establish benchmarks that
are indicative of our status such as accreditation ratings, client surveys, and peer feedback. Being #1
means we are looked to as a peer of the national regulators with whom we cooperate, it means our
methodologies are progressive and effective, it means that our opinions are sought from a variety of
stakeholders, and that our people are seen as creative in meeting the regulatory challenges in our dynamic
industry. Being #1 will enhance the confidence the Legislature and the Administration can place in us.
The second business goal – of continuous enhancement of competence, as the means to building our
leadership position – is pursued via two key avenues: our people and our processes. The business of the
Department is purely a people business. There is no manufacturing, no supply chain, there are simply
people using their skill to protect the public’s confidence in our financial system, in the most efficient
manner. And effective process is the means by which we can best leverage the limited resource of our
people’s skills. Because we are resource constrained, we must find process improvements that help
target our people’s time on the highest value added activities. In the first weeks of my tenure, we have re-
3 Monthly Bulletin May 2004
engineered our new bank charter approval process, and reduced the time involved by at least fifty
As a result, our goal of continuous improvement of competence is delivered through consistent skills
development for our staff, through efforts to improve our personnel practices to help retain our
competent people, through never-ending challenges to improve our processes that save time and money,
and through skillful utilization of technology to simplify the development and delivery of competence.
Multitudes of initiatives are necessary to pursue this competence goal, but the determination exists to
undertake the tasks. My key role will be to guide and nurture those initiatives, and to leave behind a
culture that will sustain competence long after I depart.
In the face of the many challenges that confront our industry and its regulators, as well as the challenges
to the dual banking system and state’s rights, a solidly competent Department of Financial Institutions is
our strongest offense and our only defense.
I look forward to having the opportunity to again serve our state, the Legislature, and the
Schwarzenegger Administration as your Commissioner of Financial Institutions.
Thank you.
Paul J. Deiro Appointed Legislative Deputy
Commissioner of Financial Institution Howard Gould announced that Paul J. Deiro was appointed
Deputy Commissioner, Legislation effective May 17, 2004
Mr. Deiro has extensive experience in policy development, budgetary and fiscal matters, and analyzing
and presenting testimony on important legislative issues. Most recently, he served as Senior Consultant
for the California State Assembly Republican Fiscal Committee, where his responsibilities included
briefing the Vice Chair of the Assembly Budget Committee and Assembly Republican leadership on
budget issues and fiscal bills pertaining to public financing, affordable housing, banking, taxation,
economic development, privacy, telecommunications and energy policy.
Mr. Deiro formerly served as Director of Legislation for the Department of Housing and Community
Development, was Chief Consultant for the California State Assembly Committee on Housing and
Community Development and served as the Director of Legislation for the California Housing Finance
Agency. Mr. Deiro has also worked on Capitol Hill for U.S. Senator Pete Wilson as a Legislative Aide.
Mr. Deiro takes over from Margaret (“Meg”) Svoboda who left DFI on May 10, 2004 to pursue other
interests of a professional nature in the area of legislation and public policy.
The Department welcomes Paul and wishes Meg every success in her new endeavors. He will be located
in the Sacramento Office and can be reached at (916) 322-5963 or by email at pdeiro@dfi.ca.gov.
4 Monthly Bulletin May 2004
Robert Venchiarutti Appointed Deputy
Commissioner, Special Licensees
Commissioner Howard Gould announced the appointment of Robert Venchiarutti to Deputy
Commissioner, Special Licensee Division effective May 18, 2004. Mr. Venchiarutti has been acting in this
capacity for the past year and has brought new Departmental focus to the importance of the regulation of
this segment of the financial services industry. Mr. Venchiarutti joined the Department of Financial
Institutions (DFI) in December 2000 as a Staff Counsel in the San Francisco Office.
Prior to joining DFI, Mr. Venchiarutti was in private practice for six years. He is a graduate of
Georgetown University and Hastings College of the Law.
William G. (Tom) Thompson
It is with great sadness that we report the death of Assistant Chief Counsel William G. (Tom) Thompson
on Tuesday, May 4, 2004 at the age of 54. Mr. Thompson first joined the State Banking Department in
1981 as a legal counsel. He was promoted to Senior Counsel and became Assistant Chief Counsel in
Tom was an enthusiastic high performance car aficionado. He enjoyed driving in track events, and he
belonged to a number of car clubs. Tom is survived by Linnea, his wife of 17 years; his son and daughter,
Bobby and Sarah; his parents, Bill and Joan and his siblings Katie, John, Sally, Bob and ten nieces and
Mr. Thompson was a valued member of the Department’s legal staff. The DFI staff joins with his many
friends and colleagues in extending our deepest sympathy to Mr. Thompson’s family.
SB1 – Financial Information Privacy Act
California’s Financial Information Privacy Act, commonly referred to as SB 1 (Senate Bill 1 (Speier))
(Division 1.2 (commencing with Section 4050) of the Financial Code), will become effective on July 1,
2004. SB 1 requires financial institutions to deliver privacy notices to consumers as a condition of
disclosing consumer information to affiliates and third parties for marketing purposes.
The Department is prepared to include an evaluation of compliance with SB 1 in all examinations
conducted after the effective date of the law.
On May 20, 2004, the Department sent out a reminder notice to all of our licensees. At that time, some
were under the impression that the lawsuit filed on April 19, 2004, by the American Bankers Association
had rendered SB 1 unenforceable.
The SB 1 lawsuit was filed in the Federal District Court in Sacramento (Case number CIV.S-04-0778
MCE KLM) seeking to enjoin the Department, along with the Attorney General and the Departments of
5 Monthly Bulletin May 2004
Corporations and Insurance, from enforcing certain of the provisions of SB 1. To date, no hearings have
been scheduled.
Licensees were advised in the May 20th notice that the litigation is in its early stages, and that nothing has
occurred within the lawsuit to delay or block the effective date of the new law. Absent any intervening
event, all licensees of the Department are expected to comply with SB 1 on and after the SB 1’s effective
It was also noted that the current litigation is narrowly drawn and affects only the plaintiffs in the case.
Licensees are advised to seek continuing guidance regarding their responsibilities under SB 1 from their
legal counsel or trade association.
Annual Fee Reminder
The following institution types are reminded that annual fees are due in this office on or before July 1,
2004. Please remit fees payable the Department of Financial Institutions at:
Department of Financial Institutions
111 Pine Street, #1100
San Francisco, CA 94111-5613
Representative offices of foreign (other nation) banks
The annual representative license fee for fiscal year 2004/2005 is due on or before July 1, 2004. 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, 2004. 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 pcarroll@dfi.ca.gov.
Branch offices of foreign (other state) state banks
The annual fee for fiscal year 2004/2005 is due on or before July 1, 2004. 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 pcarroll@dfi.ca.gov.
Facilities of foreign (other state) banks
The annual fee for fiscal year 2004/2005 is due on or before July 1, 2004. 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, 2004.
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 pcarroll@dfi.ca.gov.
6 Monthly Bulletin May 2004
Transmitters of money abroad
The annual fees for fiscal year 2004/2005 are due on or before July 1, 2004. 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 jprada@dfi.ca.gov.
Business and Industrial Development Corporation (BIDCO)
The annual license fee for fiscal year 2004/2005 is due on or before July 1, 2004. The fee, as outlined in
Section 31115(a)(6), is $2,000.00 for each BIDCO doing business as of June 1, 2004. Please remit fees
to the attention of Patrick Carroll at the above address. For questions about fees, call (415) 263-8559 or
e-mail pcarroll@dfi.ca.gov.
Commercial Bank Activity
New Bank
First General Bank
1744 South Nogales Street, Rowland Heights, Los Angeles County
Correspondent: Gary Steven Findley, Esq.
Gary Steven Findley & Assoc.
1470 North Hundley
Anaheim, CA 92806
(714) 630-7136
Withdrawn: 5/10/04
Great America Bank
In the vicinity of San Gabriel Boulevard and East Valley Boulevard, San Gabriel, Los Angeles County
Correspondent: Gary Steven Findley, Esq.
Gary Steven Findley & Assoc.
1470 North Hundley
Anaheim, CA 92806
(714) 630-7136
Withdrawn: 5/28/04
New YCB Bank
624 Court Street, Woodland, Yolo County
Correspondent: Joseph G. Mason
Dodd, Mason, George LLP
100 Century Center Court, Suite 605
San Jose, CA 95112-4536
Filed: 5/20/04
7 Monthly Bulletin May 2004
New Bank (Continued)
Ojai Community Bank
402 West Ojai Avenue, Ojai, Ventura County
Correspondent: James H. Avery
James H. Avery Company
PO Box 3009
San Luis Obispo, CA 93403
Phone: (805) 544-5477
Filed: 5/17/04
Bank of Orange County, Orange, with and into Placer Sierra Bank, Auburn
Filed: 5/10/04
Pacific Union Bank, Los Angeles, with and into Hanmi Bank, Los Angeles
Effected: 4/30/04
Yolo Community Bank, Woodland, with and into New YCB Bank, Woodland
Filed: 5/20/04
Conversion from Industrial Bank
Affinity Bank, Ventura
Filed: 5/6/04
Approved: 5/20/04
Conversion from National Bank
InterBusiness Bank, N.A., Los Angeles, to convert from a national bank to a state-chartered bank under
the name InterBusiness Bank
Withdrawn: 5/11/04
Application for Trust Powers
County Bank
550 West Main Street, Merced, Merced County
Approved: 5/4/04
Effected: 5/20/04
Final Order (Financial Code 1913)
First International Bank, Chula Vista
Terminated: 5/14/04
United Pacific Bank, City of Industry
Issued: 4/29/04
8 Monthly Bulletin May 2004
Premium Finance Company Activity
New Premium Finance Company
Commonwealth Premium Financing, Inc.
13750 Pipeline Ave., Chino, San Bernardino County
Filed: 5/21/04
Mutual Credit Corporation
1620 N. Placentia Ave., Suite 210, Placentia, Orange County
Filed: 5/26/04
Oasis Financial Services, Inc.
2501 East Chapman Avenue, Suite 100, Fullerton, Orange County
Approved: 5/11/04
Pacific Alliance Premium Finance, Inc.
2501 East Chapman Avenue, Suite 100, Fullerton, Orange County
Approved: 5/14/04
Voluntary Surrender of License
Transamerica Insurance Finance Corporation
600 Montgomery Street, San Francisco, San Francisco County
Effected: 5/20/04
Foreign (Other State) Bank Activity
New Facility
Fifth Third Bank
26361 Crown Valley Parkway, Suite 200, Mission Viejo, Orange County
4510 East Pacific Coast Highway, Suite 640, Long Beach, Los Angeles County
Opened: 8/29/03
Credit Union Activity
California Federation of Teachers Credit Union, Burbank, into Matadors Community Credit Union,
Effected: 4/30/04
Field of Membership
Seven credit unions received approvals to add 30 new fields of membership during April 2004.
9 Monthly Bulletin May 2004
Amendment of Articles of Incorporation
One credit union received approvals for an amendment to the articles of incorporation during April 2004.
Bylaw Amendment
One credit union received approval for a bylaw amendment during April 2004.
Transmitter of Money Abroad Activity
New Transmitter
HSBC Internet Payment Services (USA) Inc.
Approved: 5/21/04
Trans-Fast Remittance, Inc.
Filed: 5/28/04
Acquisition of Control
Newco Z, Inc., f/k/a Tri-Axxa, Inc. to acquire control of Giromex, Inc.
Filed: 5/20/04
Commissioner of Financial Institutions
Bulletin for Month ended
May 2004, 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
unsubscribe, send a blank e-mail to leave-dfi_public@blizzard.sparklist.com. Contact the list administration team at bulletin@dfi.ca.gov