Department of Financial Protection and Innovation Monthly Bulletin

Monthly Bulletin – May 2022

Volume 9, Number 10

Governor Newsom Signs Blockchain Executive Order

Governor Gavin Newsom announced on May 4 an executive order to foster responsible innovation, bolster California’s innovation economy, and protect consumers. It aims to create a transparent regulatory and business environment for web3 companies which harmonizes federal and California approaches, balances the benefits and risks to consumers, and incorporates California values such as equity, inclusivity, and environmental protection. 

Under this executive order, and pursuant to the California Consumer Financial Protection Law passed by the Legislature in 2020, California will begin the process of creating a regulatory approach to spur responsible innovation while protecting California consumers, assess how to deploy blockchain technology for state and public institutions, and build research and workforce development pathways to prepare Californians for success in this industry. 

a dollar sign on an electric panel

The order directs the Department of Financial Protection and Innovation (DFPI) and other state agencies to engage in a public process and exercise statutory authority to develop a comprehensive regulatory approach to crypto assets harmonized with the direction of federal regulations and guidance, creating consumer protections and solidifying California’s status as the premiere global location for responsible crypto asset companies to start and grow. The order sets California on a path to harmonize with forthcoming federal rules and guidelines, to create regulatory clarity for businesses and protect consumers.

A burgeoning industry, crypto assets and blockchain technology surpassed a $3 trillion market cap last November, up from $14 billion just five years prior. According to research, roughly 16 percent of adults have invested in, traded, or used cryptocurrencies. As of April 22, late-stage post-money valuations for venture capital-backed blockchain and crypto asset companies have increased on average 91 percent, to $3.95 billion.

Questions about the executive order should be directed to Belinda Alcala in the DFPI Office of Financial Technology Innovation (belinda.alcala@dfpi.ca.gov).

DFPI Shares Success in Implementation of New Consumer Protection Law

DFPI logo

As part of the implementation of one of the most expansive consumer protection laws in the country, Commissioner Cloey Hewlett testified on May 4 to a joint hearing of the State Senate Banking and Financial Institutions Committee and Assembly Banking and Finance Committee. Commissioner Hewlett was joined by Chief Deputy Commissioner Chris Shultz, Senior Deputy Commissioner Suzanne Martindale, and Deputy Commissioner Christina Tetreault, head of the DFPI Office of Financial Technology Innovation.

The report to the Legislature is required as part of the California Consumer Financial Protection Law (CCFPL), effective as of Jan. 1, 2021. The first year of operation resulted in the DFPI collecting close to $1 million in restitution for consumers, fielding hundreds of additional complaints related to the law, and launching more than 100 investigations using its expanded authority under the California Consumer Financial Protection Law (CCFPL).

To accompany the testimony, the DFPI released the 2021 California Consumer Financial Protection Law (CCFPL) Annual Report on March 23 summarizing DFPI’s activities during its first year including major enforcement actions, consumer complaint statistics, and communications and outreach metrics.

Some Escrow Reports Due May 16

Escrow logo

Escrow agents are required to submit to the Commissioner an annual report prepared by an independent certified public accountant or an independent public accountant (Financial Code section 17406) within 105 days after the close of the escrow agent’s fiscal year. The annual report includes audited financial statements and required supplemental information.

If your fiscal year ended on Jan. 31, 2022, your annual report is due May 16, 2022. Please have your CPA email your report to ESCAnnualReportFiling@dfpi.ca.gov by the deadline using a secured, encrypted delivery system. The use of a secured dropbox is also acceptable. If your CPA is unable to submit the annual report electronically, it can be mailed to Sultanna Wan, Senior Financial Institutions Examiner, Escrow Law, Department of Financial Protection and Innovation, 320 West Fourth Street, Suite 750, Los Angeles, CA 90013.

Penalties for failure to file the annual report by the due date or to include required information are $100 per day for the first five days a report is late and $500 per day thereafter (Financial Code section 17408). Failure to file a report or to include any required information may also result in the suspension or revocation of an escrow agent’s license or a prompt an immediate examination (Financial Code section 17602.5).

For questions about the annual reports, call Sultanna Wan at (213) 576-7647.

 

BDIA Online Examination due May 16, 2022

Escrow logoThe Broker-Dealer / Investment Adviser (BDIA) Division is continuing an annual online examination for certain registered Investment Advisers, in accordance with DFPI’s authority under California Corporations Code Section 25241, subdivision (c). This mandatory examination consists of an online examination for Investment Advisers registered with the DFPI, who have their principal place of business in another state.

The online examination for this year began on April 4. If selected, the advisory firm was notified on April 4 and is required to complete and submit the online examination by May 16. The Division is structuring the exam to be conducted on this population on a four-year cycle. However, an Investment Adviser may be selected for a future examination sooner or later than the estimated four-year cycle.

To communicate the online examination, as well as any follow-up communication, the Division is using the Investment Adviser email address as disclosed on the current Form ADV. The business e-mail address must be dedicated to receiving DFPI communications and be monitored by the executive staff of your firm, to ensure prompt attention to communications from DFPI.

If you have any questions or inquiries, please contact the BDIA Division at CADFPIexams@dfpi.ca.gov.

DFPI Hosts Public Service Loan Forgiveness Waiver Webinar on May 31

a person with a bag of loan on his back
The DFPI will host a webinar on May 31st at 12 noon (PST) about the Public Service Loan Forgiveness (PSLF) program, eligibility, and how to apply for this federal program. This webinar is in partnership with the Student Borrower Protection Center (SBPC) and will feature a live Q&A session to help applicants get started. This webinar is free and open to all.

Register for this webinar and submit your questions to be answered during a dedicated Q&A session. It is the third webinar in a series of online events developed for the DFPI’s statewide student borrower outreach campaign. If you missed any of our student borrower events, you can watch them on the DFPI’s YouTube channel.

The PSLF waiver form submission deadline is October 31, 2022. Learn more by visiting the Public Service Loan Forgiveness Program Website. If you have questions, contact the DFPI at StudentLoanServicing@dfpi.ca.gov or call us at (866) 275-2677.

Holden Act Reports Due June 13

A hand holding a house model with a Dollar sign in it

Mortgage lending licensees must file their Residential Mortgage Loan Report for calendar year 2021 (Holden Act Report) no later than June 13. Please note that we have updated the submission filing deadlines. You may disregard the previous March 31st due date. No action will be taken if you had not submitted your report before March 31, 2022.

The Holden Act Report must be filed by all State-licensed residential mortgage lenders that do not report the data to a federal or State regulatory agency as provided by the Home Mortgage Disclosure Act of 1975.

Licensees should consult with their internal compliance officers regarding whether they are required to file the report. Instructions and reporting forms may be found at the DFPI website here.

Completed reports may be scanned and emailed on or before June 13 to Holden.Inquiries@dfpi.ca.gov. Information regarding the report may be obtained by calling (866) 275-2677.


Licensee logo

LICENSEE ACTIVITY


Commercial Bank Activity

New Bank

Bank Irvine
Proposed location: Street address to be determined in Irvine
Correspondent: James B. Jones
Carpenter & Company, 23 Corporate Plaza Drive, Suite 150, #D-11, Newport Beach, CA 92660
Phone: 949-261-8888
Approved: 4/18/22

Premium Finance Company Activity

New Premium Finance Company

Elite Premium Finance, Inc.
600 West Broadway, San Diego
Approved: 4/13/22

Velocity Premium Finance, Inc.
74710 CA 111, Palm Desert
Opened: 2/01/22

Walco Funding PFCA, Inc.
6200 Canoga Avenue, Woodland Hills
Approved: 4/28/22

Acquisition of Control

Athena Capital, LLC; Dinamo Foreign Investments, LLC; Franrika Foundation, LLC; and XS-Latam Thor, LLC , to acquire controlling shares of Biz Premium Finance Corporation
Filed: 12/13/21
Approved: 4/25/22

Warburg Pincus Global Growth GP, L.P., to acquire control of South Bay Acceptance Corporation
Filed: 1/20/22
Approved: 3/29/22 

Foreign (Other Nation) Bank Activity

New Office

Bank of Nova Scotia, The
415 Mission Street, San Francisco (Representative office)
Filed: 4/20/22

Credit Union Activity

Merger

Pacific Federal Credit Union, Diamond Bar, to merge with and into Arrowhead Central Credit Union, Rancho Cucamonga
Approved: 12/07/21
Effected: 4/01/22

Premier Community Credit Union, Stockton, to merge with and into Self-Help Federal Credit Union, Durham, North Carolina
Approved: 1/25/22
Effected: 4/26/22

Money Transmitter Activity

New Transmitter

Figure Payments Corporation
Opened: 4/13/22

Visa Global Services Inc.
Approved: 4/13/22

Acquisition of Control

WizzFinancial US LLC, to acquire control of Moneydart Global Services, Inc.
Filed: 4/04/22

Change of Name

GPS Capital Markets, Inc., to change its name to GPS Capital Markets, LLC
Effected: 4/11/22

CLOTHILDE V. HEWLETT Commissioner, Financial Protection and Innovation

The May 2022 Monthly Bulletin covers the month ended  April 30, 2022.

It is issued pursuant to Financial Code section 376.

The Monthly Bulletin is available at no charge via e-mail.

To subscribe, go to: https://public.govdelivery.com/accounts/CADFI/subscriber/new.

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Last updated: Oct 5, 2022 @ 2:28 pm