California Department of Business Oversight
Volume 6, Number 09 – April 2019
DBO Moves to Void Loans and Revoke Licenses of Auto Title Lender Fast Money Loan
The DBO filed an action on March 19 to void loans and revoke the licenses of Fast Money Loan, a prominent Southern California auto title lender, for numerous and repeated violations of the state’s lending laws.
The DBO’s accusation alleges the Long Beach-based lender routinely charged customers more interest and fees than permitted by law, failed to consider borrowers’ ability to repay as required, openly used its illegal lack of underwriting as a marketing tool, engaged in false and misleading advertising, operated out of unlicensed locations, and failed to maintain required records that would document its illegal activity.
The DBO found in two separate examinations that RLT Management, Inc., which does business as Fast Money Loan at a purported 31 locations statewide, leveraged fees that borrowers owed to the Department of Motor Vehicles to push those borrowers’ loan amounts above $2,500, the threshold at which state interest rate limits no longer apply, the DBO alleges. State law caps interest rates at about 30 percent on auto title loans of less than $2,500.
From 2012 through 2017, Fast Money reported to the DBO that it charged more than 100 percent interest on about three-fourths of its auto title loans. During that same period, Fast Money made about 1 percent of all auto title loans under the California Financing Law (CFL) but carried out 5 percent of the auto title loan repossessions in the state.
In each year from 2014 through 2017, Fast Money conducted auto title loan repossessions four to five times more often – almost two vehicles a day – than the average CFL auto title lender.
The Office of Administrative Law has granted final approval of regulations to implement the Student Loan Servicing Act (SLSA), which became operational on July 1, 2018.
The SLSA authorizes the Commissioner of Business Oversight to license, regulate, and oversee student loan servicers. The SLSA authorizes the Commissioner to adopt regulations consistent with this authority.
On Sept. 8, 2017, the DBO published a Notice of Rulemaking in the California Register proposing to adopt regulations implementing the SLSA. The Commissioner made the originally proposed regulations available for a 45-day public comment period. The Commissioner modified the proposed regulations three times. The Commissioner held an additional 15-day public comment period each time the regulations were modified.
After consideration of all comments, the DBO finalized the proposed regulations. The DBO filed an action with the Office of Administrative Law, proposing to adopt 26 regulations in seven new articles under a new subchapter of the California Code of Regulations. The Office of Administrative Law issued a Notice of Approved Rulemaking, adopting the regulations, effective March 28, 2019.
SEC Adopts Rules to Modernize and Simplify Disclosure Guide
The Securities and Exchange Commission (SEC) voted March 20 to adopt amendments to modernize and simplify disclosure requirements for public companies, investment advisers, and investment companies. The amendments are intended to eliminate outdated and unnecessary disclosure and make it easier for investors to access and analyze material information.
The amendments, consistent with the SEC’s mandate under the Fixing America’s Surface Transportation (FAST) Act, will improve the readability and navigability of company disclosures, and discourage repetition and disclosure of immaterial information. The amendments will increase flexibility in the discussion of historical periods in Management’s Discussion and Analysis, allow companies to redact confidential information from most exhibits without filing a confidential treatment request, and incorporate technology to improve access to information on the cover page of certain filings.
The amendments relating to the redaction of confidential information in certain exhibits will become effective upon publication in the Federal Register. The rest of the amendments will be effective 30 days after they are published in the Federal Register, with some limited exceptions.
FFIEC Releases 2019 HMDA Reporting Guide
On March 25, the Federal Financial Institutions Examinations Council (FFIEC) issued the 2019 edition of “Guide to HMDA Reporting: Getting It Right!,” which reflects amendments made to the Home Mortgage Disclosure Act (HMDA) by the May 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) and the August 2018 interpretive and procedural rule issued by the Consumer Financial Protection Bureau (CFPB).
The FFIEC guide includes a summary of responsibilities and requirements, directions for assembling the necessary tools, and instructions for reporting HMDA data. The HMDA was originally enacted by Congress in 1975.
Commercial Bank Activity
Uniti Bank, Buena Park, to merge with and into United Business Bank, Walnut Creek
Sale of Partial Business Unit
Silvergate Bank, La Jolla, to sell the banking business of the San Marcos branch office to HomeStreet Bank, Seattle, Washington
Purchase of Partial Business Unit
Exchange Bank, Santa Rosa, to purchase approximately $80 million of fiduciary assets from American Trust and Savings Bank, Dubuque, Iowa
Industrial Bank Activity
Change of Name
Rancho Santa Fe Thrift & Loan Association, to change its name to Hatch Bank
Premium Finance Company Activity
New Premium Finance Company
Cal West Premium Finance Funding
600 West Broadway, San Diego
Pantheon Reserve, Inc., The
1108 Willow Pass Ct., Concord
Premium Finance Funding, Inc. DBA Premium Finance Funding
660 Newport Center Drive, Newport Beach
Principal Premium Financing, Inc.
22364 Alessandro Boulevard, Moreno Valley
Acquisition of Control
DMI Insurance Services, Inc., Austin, Texas, to acquire control of Insurance Installment Services, Inc., Newport Beach
WebBank, Salt Lake City, Utah, to acquire control of National Partners PFco Inc. of California, Denver, Colorado
Credit Union Activity
FedOne Federal Credit Union, Laguna Niguel, to merge with and into Credit Union of Southern California, Anaheim
McClatchy Employees Credit Union, Sacramento, to merge with and into First U.S. Community Credit Union, Sacramento
Northern California Latvian Credit Union, San Francisco, to merge with and into California Lithuanian Credit Union, Santa Monica
Foreign (Other Nation) Bank Activity
Banco Santander, S.A.
169 University Avenue, Palo Alto (Representative Office)
Foreign (Other State) Bank Activity
CIBC Bank USA
Three Embarcadero Center, San Francisco (Facility – Insured Bank)
First National Bank in Howell
907 8th Street, Manhattan Beach (Facility – Insured Bank)
Money Transmitter Activity
New Money Transmitter
eBay Commerce Inc.
LL Pay U.S., LLC
Acquisition of Control
Finabler Limited, to acquire control of Travelex Currency Services Inc.
Fiserv, Inc., to acquire control of Integrated Payment Systems, Inc.
New Omaha Holdings L.P., to acquire control of CheckFreePay Corporation
JAN LYNN OWEN
Commissioner of Business Oversight
The March 2019 Monthly Bulletin covers the month ended February 28, 2019. It is issued pursuant to Financial Code section 376.
The Monthly Bulletin is available without charge via e-mail. To subscribe, go to: https://dfpi.ca.gov/connect-with-the-dbo-via-email/