DFI Monthly Bulletin – September 2009

Monthly Bulletin

Volume 13, Issue 3 – September 2009

Application Deadline for the Capital Assistance Program (“CAP”)

In order to ensure compliance with the previously announced funding deadline of November 9, 2009, qualifying institutions wishing to participate in the CAP are encouraged to submit their application to the appropriate Federal banking agency by October 15, 2009. This will provide sufficient time for review and will enable preliminarily approved applicants to meet the funding deadline. http://www.financialstability.gov/docs/CPP/FAQ_CAPdeadline.pdf

Failure to Implement Proper Access Controls Can Create Liability in Data Breach Cases

In August 2009, an Illinois District Court ruled a bank can be sued for their failure to adopt multi-factor authentication and concluded the bank breached its common law duty to protect the Plaintiffs’ account against fraudulent access, and if the bank’s failure to adopt multi-factor authentication caused fraudulent access to plaintiffs’ account, it could be held liable for negligence (Shames-Yeakel v. Citizens Financial Bank, No. 07 C 5387. Aug. 21, 2009).

The court observed that the Federal Financial Institutions Examination Council (FFIEC) had issued guidance entitled Authentication in an Internet Banking Environment (2005 Guidance) to all financial institutions, which states, “The [FFIEC] agencies consider single-factor authentication, as the only control mechanism, to be inadequate for high-risk transactions involving access to customer information or the movement of funds to other parties. Financial institutions offering Internet-based products and services to their customers should use effective methods to authenticate the identity of customers using those products and services..” In addition, the 2005 Guidance reminds financial institutions, “The risks of doing business with unauthorized or incorrectly identified persons in an Internet banking environment can result in financial loss and reputation damage through fraud, disclosure of customer information, corruption of data, or unenforceable agreements.”

The DFI expects its depositary licensees and their technology service providers to implement appropriate risk management controls as described in the 2005 Guidance and the interagency document, Frequently Asked Questions on FFIEC Guidance on Authentication in an Internet Banking Environment dated August 15, 2006. If you have any questions about the IT/E-Banking Examination Program for banking institutions, please contact Deputy Commissioner Doug Kirkpatrick at (213) 897-2223, email: dkirkpatrick@dfi.ca.gov; or IT/E-Banking Program Manager Richard Schorr at (213) 897-2225, email: rschorr@dfi.ca.gov. For state-chartered credit unions, please contact Chief Examiner T. Bert McLane at (213) 897-9351, email: bmclane@dfi.ca.gov; or Assistant Chief Examiner Les Thompson at (213) 897-2174, email: lthompson@dfi.ca.gov.

Census 2010

New Census Partner Web sites Provide Central Resource for Materials

The Census Bureau launched a new Web site for partners, 2010census.gov/partners, that includes information, resources and materials to communicate important messages about the Census and drive participation. Many materials available on the partner Web site are customizable, allowing partners the flexibility to include additional information and graphics. Many other materials are turnkey and can be dropped right into a newsletter or posted on a Web site. The Census Bureau updates the site regularly with new materials and fresh ideas for partnership activities, visit 2010census.gov/partners. Throughout the coming year, we have many opportunities to build awareness of the 2010 Census in our communities. Refer to the “2010 Census Operational Milestone” timeline for key dates and communications activities surrounding the 2010 Census.

DFI has a Census 2010 Web page with California-specific information. The DFI page includes information on the California Complete Count Committee, Maps of Hard-to-Count areas by California county, and other information to support the efforts of Census 2010 partners in California. See http://www.dfi.ca.gov/census/census2010.asp

Commercial Bank Activity

New Bank

Gateway Pacific Bank
801 National City Boulevard, National City, San Diego County
Correspondent: Russell W. Bushore
Carpenter & Company
Five Park Plaza, Suite 950
Irvine, CA 92614
(949) 261-8888
Expired: 9/17/09


1st Pacific Bank of California, San Diego, to merge with First Business Bank, San Diego, with 1st Pacific Bank of California as surviving bank
Filed: 9/9/09

Acquisition of Control

Ernest and Lisa D. Auerbach to acquire control of 1st Pacific Bank of California
Filed: 9/9/09

Orfalea Family Foundation and Hutton Foundation to acquire control of Bank of Santa Barbara
Approved: 9/29/09

Sale of Partial Business Unit

Westamerica Bank, San Rafael, to sell the San Jose branch office to City National Bank, Los Angeles
Filed: 9/3/09
Approved: 9/24/09

Premium Finance Company Activity

New Premium Finance Company

Advanced Consulting Enterprises, Inc.
6030 Pat Avenue, Woodland Hills, Los Angeles County
Approved: 9/30/09

gotoPremiumFinance.com, Inc.
21820 Burbank Boulevard, Woodland Hills, Los Angeles County
Opened: 9/15/09

Pacific Premium Financing Specialists, Inc.
500 East E Street, Ontario, San Bernardino County
Filed: 9/3/09

Peninsula Life Solutions, LLC
1010 Wisconsin Avenue, N.W., Washington, D.C.
Filed: 9/1/09

Sundance Premium Finance Company
8475 E. Hartford Drive, Scottsdale, Maricopa County, Arizona
Filed: 8/18/09

Voluntary Surrender of License

AMGRO Premium Financing, Inc.
Effected: 9/17/09

Life Credit Corporation
Effected: 9/17/09

Partners Premium Finance Company
Effected: 9/17/09

Credit Union Activity

Field of Membership

Two credit unions received approval to add four new fields of membership during August 2009.


Limoneira Federal Credit Union, Santa Paula, to merge with and into California Agribusiness Credit Union, Buena Park
Approved: 9/1/09

Printing & Publishing Employees Credit Union, Riverside, to merge with and into Printing Industries Credit Union, Los Angeles
Approved: 9/1/09

WestWorks Credit Union, Alhambra, to merge with and into Credit Union of Southern California, Brea
Approved: 9/1/09

Foreign (Other Nation) Bank Activity

New Office

The Bank of Nova Scotia
580 California Street, City and County of San Francisco (Representative Office)
Approved: 9/3/09


The Bank of Nova Scotia
580 California Street, City and County of San Francisco (Depositary Agency Office)
Approved: 9/3/09

Voluntary Surrender of License

Commerzbank Aktiengesellschaft
633 West Fifth Street, City and County of Los Angeles (Limited branch office)
Effected: 9/1/09

Foreign (Other State) Bank Activity

New Facility

Crestmark Bank (Facility – Insured Bank)
17846 Lahey Street, Granada Hills, Los Angeles County
Opened: 9/9/09

Discontinuance of Facility

Allegiance Direct Bank (Facility – Other State Industrial Bank)
7350 Spinnaker Street, Carlsbad, San Diego County
Discontinued: 9/26/09

Payment of Instrument Activity

New Payment Instrument

Order Express, Inc.
Opened: 9/15/09

Commissioner of Financial Institutions

Bulletin for Month ended
September 2009, issued pursuant
to Financial Code section 258