Department of Financial Protection and Innovation Monthly Bulletin

Monthly Bulletin – July 2022

Volume 9, Number 12

Student Loan Borrower Campaign Gains 2022-23 Budget Funding

The California Legislature has approved $10 million in General Fund money for the DFPI to conduct a student loan borrower outreach campaign as part of the 2022-2023 Budget.

  • $7.25 million will be dedicated to creating a grant program to provide resources to community-based organizations that provide direct assistance to student loan borrowers.
  • $2.75 million will be dedicated to targeted public outreach to notify people with federal student loans about available resources and webinars to help them prepare for deadlines related to the repayment restart, Public Service Loan Forgiveness (PSLF) waiver program, and how to file student loan related complaints and inquiries.
A Dollar sign and a PHD hat

The California Legislature passed the budget proposal, Senate Bill 154, on June 13. Governor Newsom announced an agreement with the Legislature on the framework of the 2022-23 Budget and officially signed the bill into law on June 27. Although, negotiations with legislators regarding the numerous trailer bills will continue through the summer, no further changes are expected regarding funding for the Student Loan Borrower Campaign.

DFPI Student Loan Borrower Webinars

A person with loan bag on his bag

The next student loan borrower webinar (fourth in a series), Student Loan Updates and Repayment Options, will be held on August 24 at 12 pm PST. With student loan repayments set to start after August 31, 2022, get the latest news and updates about the different repayment options available to borrowers. The DFPI will host the event in partnership with the Consumer Financial Protection Bureau (CFPB) and the Student Borrower Protection Center (SBPC). Click here to register for the Aug. 24 webinar.

The DFPI hosted a webinar on May 31st on the Public Service Loan Forgiveness (PSLF) program, eligibility, and how to apply for this federal program. Between now and October 31, the U.S. Department of Education is waiving some of the usual requirements for getting credit toward PSLF, if you consolidate any older ineligible loans and document your public service employment history. By acting early, you gain valuable time to adjust your loans and to find out whether you are on track to qualify for the PSLF program before the waiver deadline on October 31, 2022.

You may view any of our student loan borrower events on the DFPI’s YouTube channel. If you have questions, contact the DFPI at Ask.DFPI@dfpi.ca.gov or call us at (866) 275-2677.

DFPI’s Commercial Financing Disclosure Regulations Extended to Small Businesses

Regulation stamp logo The California Office of Administrative Law (OAL) approved on June 9 the DFPI’s proposed commercial financing disclosure regulations. The regulations extend disclosure protections to California small businesses when those businesses seek commercial financing. When the disclosures take effect on December 9 of this year, California small businesses will be better equipped to understand the costs and benefits of commercial financing offers and to compare different offers to find the best financing solution to meet their needs. The final regulations and Final Statement of Reasons are posted to the DFPI website.

The regulations are the culmination of a multi-year process in which the DFPI solicited input from a diverse range of stakeholders and used that input to improve the DFPI’s draft regulations. On September 30, 2018, California enacted SB 1235 (Glazer), a bill requiring commercial financing providers to provide disclosures to small businesses. The bill required providers to disclose the total amount of funds provided, the total dollar cost of financing, the term or estimated term, the method, frequency, and amount of payments, a description of prepayment penalties, and (until January 1, 2024) the total cost of financing expressed as an annualized rate. The California Legislature tasked the DFPI with issuing regulations before the above-described requirements would take effect.

Proposed Rules on Commercial Financial Products and Services

Regulation stamp logo

The DFPI has filed a Notice of Proposed Action with the Office of Administrative Law and invites public comments on proposed rulemaking under the Consumer Financial Protection Law (CCFPL). The proposed regulations implement, interpret, or make specific provisions of the Financial Code which relate to the offering and provision of commercial financing and other financial products and services to small businesses, nonprofits, and family farms.

Submit comments by any of the following methods.

Via email to regulations@dfpi.ca.gov with a copy to Samuel.Park@dfpi.ca.gov. Include “PRO 02-21” in the subject line.

Via postal mail to:

Department of Financial Protection and Innovation
Attn: Sandra Navarro
2101 Arena Boulevard
Sacramento, California 95834

Available at the DFPI website are the Notice of Proposed Action, the Text of Proposed Regulations and the Initial Statement of Reasons.

The 45-day public comment period ends on Monday, August 8, 2022.

DFPI Seeks Public Comment on Oversight of Crypto Asset-Related Financial Services

Dollar sign on an electric board

A reminder that the DFPI is seeking comments on regulatory priorities, California Consumer Financial Protection Law (CCFPL) regulation and supervision, and market-monitoring functions regarding oversight of crypto-asset related financial products and services. For any recommendation relating to rulemaking, the DFPI invites stakeholders and the public to provide a description of the economic impact (if known) of the recommendation for California businesses and consumers. The DFPI will proceed with rulemaking under the authority of the CCFPL.

Governor Gavin Newsom issued Executive Order N-9-22 (Executive Order) on May 4, 2022, to foster responsible innovation, bolster California’s innovation economy, and protect consumers. In his announcement, Governor Newsom outlined his aim 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.

In accordance with the Executive Order, the DFPI seeks input from stakeholders and the public in developing guidance and, as appropriate, regulatory clarity and supervision of covered persons and service providers involved in the offering and provision of crypto asset-related financial products and services in California.

The DFPI has formulated topics and questions to assist interested parties in providing input. However, stakeholders are not limited to providing comments in the areas identified by the DFPI and may comment on any potential area for rulemaking relating to crypto asset-related financial products and services. The formal Invitation for Comments is posted at the DFPI website.

Interested parties are invited to submit comments by the deadline of August 5, 2022. Comments may be submitted electronically to regulations@dfpi.ca.gov (please include “Invitation for Comments – Crypto Asset-Related Financial Products and Services ” in the subject line).

Comments may also be mailed to:

Department of Financial Protection and Innovation, Legal Division
Attn: Sandra Navarro, Regulations Coordinator
2101 Arena Boulevard
Sacramento, CA 95834

2022-23 Assessment Rates for Financial Institutions

a frisbee with assessment word on it

On June 30, the invoice for the 2022-23 annual assessment were emailed to banks, credit unions and money transmitters, instead of a sending a paper invoice through the mail. Licensees that do not receive their invoices should notify the Accounts Receivable Unit at AccountingAR@dfpi.ca.gov as soon as possible.

Invoices are payable on or before August 1, with more time allowed for payments made via electronic funds transfers (EFT). EFT payments are due by August 8.

Following is assessment information for various types of financial institutions:

  • Commercial Banks, Foreign Banks, and Trust Companies: The base rate was set at $1.39 per $1,000 of assets, a $0.05 decrease from last year’s rate of $1.44.
  • Credit Unions: The 2021-22 assessment rate was set at $1.01 per $1,000 of assets, the same as last year’s rate.
  • Industrial Banks: The base rate was set at $1.39 per $1,000 of assets, a decrease of $0.05 from last year’s rate of $1.44.
  • Money Transmitters: The 2021-22 assessment rate was set at $0.014 per $1,000 received for transmission by a licensee in calendar year 2021, a decrease of $0.006 from last year’s rate. The 2021-22 assessment rate for issuers of payment instruments and stored value was set at $0.63 per $1,000 of total payment instruments and stored value sold by a licensee. The rate has not increased since 2012.

For questions about the calculation of an assessment, please refer to “How to Calculate Your Assessment” or contact Patrick Carroll at (415) 263-8559 or patrick.carroll@dfpi.ca.gov. Questions regarding assessment payment processing should be directed to the Accounts Receivable Unit at AccountingAR@dfpi.ca.gov.

Some Escrow Reports Due July 14

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 March 31, 2022, your annual report is due July 14, 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.

Escrow Advisory Committee Openings

Escrow logo

As of September, there will be three openings on the Escrow Advisory Committee.

The Committee is comprised of eleven members, including the Commissioner or the Commissioner’s designee. The Commissioner appoints the Committee members, other than those representing Escrow Institute of California and Escrow Agents’ Fidelity Corporation. The Committee is established in Financial Code section 17214 and its purpose is to assist the Commissioner in the implementation of the Commissioner’s duties under the Escrow Law.

Appointed members serve for a period of two years without compensation or reimbursement for expenses. The Committee meets quarterly at the Department’s office. The next meeting is tentatively scheduled for Wednesday September 7, 2022.

The current committee vacancies are representatives from:

1) A small-size escrow company,

2) An escrow company that has a different type of business ownership, and

3) A CPA who has escrow agent clients.

Examples of a different business ownership include companies owned by title companies or brokers. Managers or corporate officers of independent escrow companies are eligible to serve on the committee.

Licensed escrow agents and qualifying CPAs who may meet the criteria for one of the above categories are encouraged to apply by sending a letter of qualifications and/or resume to the attention of Paul Liang at Department of Financial Protection and Innovation, 320 West 4th Street, Suite 750, Los Angeles, California 90013, or via email to Paul.Liang@dfpi.ca.gov The deadline for submissions is July 29, 2022.

Questions should be directed to Paul.Liang@dfpi.ca.gov or (213) 576-7535.

2021 Reports on Increased Access to Responsible Small Dollar Loans and Non-Profits

Report booklet

The DFPI has published the 2021 Annual Report of the Pilot Program for Increased Access to Responsible Small Dollar Loans (RSDL). The report contains detailed information gathered earlier this year from the lenders who participate in the program.

Pursuant to legislation enacted in 2013, the Pilot Program was created to increase the availability of responsible small dollar installment loans of at least $300 but less than $2,500. Legislation enacted in 2018 raised the maximum loan amount to $7,500. The program is designed to provide an alternative to payday loans and other more expensive forms of consumer credit.

Also posted is the 2021 Annual Report for Nonprofit Entities Providing Zero-Interest Loans. Senate Bill 896 was enacted in 2015 to encourage nonprofit organizations (exempt organizations) to facilitate zero-interest, low-cost loans. In part, the small dollar loans are intended to allow consumers to establish and build credit histories or improve their credit scores.

Credit Union

New Staff for DFPI Market Monitoring, Consumer Research, Insight & Analytics

The annual State System Summit of the National Association of State Credit Union Supervisors (NASCUS), known as S3, will be held at the Waterfront Beach Resort in Huntington Beach, California on August 15-17, 2022.

To register for this event or learn more, please click here.


Licensee logo

LICENSEE ACTIVITY


Commercial Bank Activity

New Bank

Icon Bank
Proposed location: Street address to be determined in the vicinity of Riverside, Riverside County
Correspondent: James B. Jones
Carpenter & Company, 23 Corporate Plaza Drive, Suite 150 #D-11, Newport Beach, CA 92660
Phone: 994-261-8888
Filed: 6/10/22

Legacy Bank
41391 Kalmia Street, Murrieta, CA 92562
Phone #: 877-210-3277
Fax #: 951-579-3178
Officers: James D. Hicken, President and Chief Executive Officer
Rick Huerta, Executive Vice President and Chief Financial Officer
Kathy Gonzales, Executive Vice President and Chief Banking Officer
Dinna Pamintuan, Executive Vice President and Chief Credit Officer
Capitalization: $25 million
Website: www.legacybankca.com
Opened: June 10, 2022

Acquisition of Control

Patriot Financial Partners, GP IV, L.P., Patriot Financial Partners IV, L.P., Patriot Financial Partners Parallel IV, L.P., Patriot Financial Partners GP IV, LLC, Patriot Financial Advisors, LLC, Patriot Financial Advisors, L.P., to acquire control of Avidbank Holdings, Inc.
Filed: 6/29/22

Sale of Partial Business Unit

Mission Bank, to sell the banking business of its Ridgecrest Business Banking Center, to AltaOne Federal Credit Union
Effected: 6/03/22

Foreign (Other State) Bank Activity

New Facility

Emigrant Bank
8730 West Sunset Boulevard, West Hollywood, Los Angeles County (Facility – insured bank)
No Objection: 6/24/22

Credit Union Activity

Merger

Moore West Federal Credit Union, San Leandro to merge with and into UNCLE Credit Union, Livermore
Filed: 6/01/22

South San Francisco City Employees Federal Credit Union, South San Francisco, to merge with and into Financial Partners Credit Union, Downey
Approved: 1/19/22
Effected: 6/01/22

Foreign (Other State) Credit Union Activity

New Branch

Rogue Credit Union
Address to be determined
Filed: 6/16/22

Money Transmitter Activity

New Transmitter

Wave Financial USA, Inc.
Approved: 6/08/22

Change of Name

GCA MTL, LLC, to change its name to EVERI MTL, LLC.
Effected: 5/12/22

CLOTHILDE V. HEWLETT Commissioner, Financial Protection and Innovation

The July 2022 Monthly Bulletin covers the month ended  June 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 24, 2022 @ 3:57 pm