Monthly Bulletin – January 2023
Volume 10, Number 6
DFPI’s Commissioner Hewlett on List of People to Watch in Crypto
The San Francisco Examiner named DFPI’s Commissioner Hewlett on a list of 10 People to Watch in the Crypto Showdown of 2023. As California is home to some of crypto’s most important companies, the crypto crisis has kept the DFPI under Commissioner Hewlett busy and the Department has been working to ensure any company flouting the state’s financial regulations will become a target.
Senior Deputy Commissioner Edgar L. Gill, Jr. to Depart DFPI
Senior Deputy Commissioner Edgar L. Gill, Jr. will depart the Department of Financial Protection and Innovation (DFPI) on Jan. 20. Ed has been a leader at the Department since 2015, serving both as an appointee of both Governors Brown and Newsom.
Ed was first appointed senior deputy commissioner of the Division of Corporations at the then Department of Business Oversight. He was later appointed as Senior Deputy Commissioner for the DFPI Division of Corporations and Financial Institutions.
Prior to his appointment, Ed served in numerous leadership positions at national banking institutions including senior vice president team lead at U.S. Bank, senior vice president and senior client manager at Bank of America and vice president relationship manager at Union Bank of California and Citigroup. Ed was also a mortgage loan officer at Sacramento Savings and Loan and a business banking officer at Wells Fargo Bank.
Ed was essential in the development of the modern DFPI. He consolidated the traditional functions of the Department into the Division of Corporations and Financial Institutions while the parallel division of Consumer Financial Protection was created by the California Consumer Financial Protection Law. Ed has been a respected liaison to the financial services industry leaders that are licensees of the Department.
Please join the DFPI in wishing him a successful new chapter in his career.
DFPI Takes Actions On Crypto Asset Accounts and Businesses
The DFPI has opened multiple investigations in connection with crypto companies, including FTX, BlockFi, Salt Lending LLC, and MyConstant.
In December, the DFPI posted more than 30 consumer alerts highlighting fraudulent or concerning activities by cryptocurrency brokers.
Additionally, the DFPI has recently taken enforcement actions against companies that offer crypto interest accounts, including Voyager Digital LLC, Celsius Network Inc., and Nexo Group. The DFPI is regularly monitoring the most pressing crypto-related questions. The DFPI has posted an informational brief for consumers at the DFPI webpage titled Crypto: What You Should Know Right Now.
Some Escrow Reports Due Jan. 13
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 Sept. 30, 2022, your annual report is due Jan. 13, 2023. 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) 248-7161.
DFPI Debt Collection Advisory Committee
The DFPI will be soliciting applications for members to the Debt Collection Advisory Committee at the end of January. Financial Code Section 100025 provides for a Debt Collection Advisory Committee:
- Appointed by the Commissioner to a two-year term.
- Seven members, including at least one representing consumers.
- No compensation or reimbursement of expenses.
- A minimum of two meetings per year.
Commissioner has identified the following priorities for the industry appointments to this advisory committee:
- Location within California; geographic representation is preferred (but not required).
- Small and large agencies.
- Owner, corporate officer or senior-level employees of debt collector licensees or applicants.
- Representation of different industry segments required to be licensed, including:
- Third-party collection agencies
- Debt buying companies (preference for Receivables Management Certification Program)
- Collection law firms
- Leadership in the industry through participation in state and national trade associations.
- Direct experience working with clients, consumers, auditors, and licensing.
- Experience with types of debt collection, including financial, educational, medical, retail, municipal, others.
- Diversity of backgrounds and experiences.
Those interested in serving on the Debt Collection Advisory Committee can find additional information on our website regarding the application process. You can also contact Ryan Rodriguez at firstname.lastname@example.org.
Student Loan Servicing Act Rulemaking on Income Share Agreements; Comments Due Jan. 26
On Sept. 9, 2022, the Commissioner of Financial Protection and Innovation published a Notice of Proposed Rulemaking in the California Register proposing to adopt regulations implementing the Student Loan Servicing Act, and the Student Loans: Borrower Rights Law (Civil Code section 1788.100, et seq.)
The proposed rules clarify that education financing products, including but not limited to income share agreements and installment contracts, are student loans and that servicers of such education financing products are covered by the Act and must be licensed. The proposed rules define terms and documents specific to education financing products. The proposed rules also amend some existing rules, based on the Department’s years of experience licensing student loan servicers and conducting regulatory examinations.
In response to public comments received regarding the originally proposed rules, the Commissioner has modified the proposed rules. The Commissioner is making the modified rules available for public comment, for a 15-day comment period. The deadline to submit comments to the modified rules is Jan. 26, 2023.
The Notice of Modifications to Proposed Regulations and the Modified Text are available.
CCFPL Complaints and Inquiries Rulemaking Comments Deadline Extended to Jan. 20
On May 20, 2022, the DFPI published a Notice of Proposed Rulemaking (PRO 03-21) regarding consumer complaints and inquiries under the California Consumer Financial Protection Law.
On Dec. 22, 2022, the Department issued a Notice of Modifications to PRO 03-21 stating comments are due Friday, Jan. 13, 2023.
Due to the holiday season and to accommodate the requests of interested parties, the Department is now extending the deadline to submit comments by another seven days. The new deadline to submit comments is Friday, Jan. 20, 2023.
Please submit comments regarding the modifications to the proposed rules and comments regarding their economic impact by any of the following methods:
- Via e-mail to: email@example.com with a copy to Bae@dfpi.ca.gov. Identify the comments as “PRO 03-21” in the subject line.
- Via postal mail addressed to: Department of Financial Protection and Innovation, Attn: Araceli Dyson, 2101 Arena Blvd., Sacramento, CA 95834.
Both the Notice of Modification and the Proposed Text are posted at the DFPI website.
Californians with Student Loans Updates
IDR & PSLF Account Adjustment: The Department of Education (ED) is currently conducting a one-time automatic account adjustment of Income Driven Repayment (IDR) and Public Student Loan Forgiveness (PSLF) payment credits that will count toward or get borrowers closer to forgiveness. The ED estimates that this action will result in automatic debt cancellation for at least 40,000 borrowers qualifying for PSLF and several thousand borrowers under IDR. More than 3.6 million borrowers will receive at least three years of additional credit toward forgiveness under IDR. The adjustment will be automatic, and no application is required. For details on this program and to find out whether your loans apply, visit StudentAid.gov.
Student Borrower Bill of Rights: Californians with federal and private student loans have special protections provided by the Student Borrower Bill of Rights. Servicers are the borrower’s main point of contact when calling about their payments, forgiveness, and repayment options and they should be acting in the borrower’s best interest. If you have any questions about your rights, your servicer, or you are unsure if you should file a complaint, contact the DFPI’s Student Loan Servicing Ombudsperson, Celina Damian, at Celina.Damian@dfpi.ca.gov, where she will either answer your question directly or refer you to the appropriate resources you need to resolve your issue.
DFPI Student Loan Resources: During the repayment pause extension and while the Supreme Court reviews legal challenges to the federal Student Debt Relief program, borrowers are encouraged to learn all they can about their loans and prepare for repayment. Check out the Back on Track Website for the most up to date information on student loans.
File a Complaint: The DFPI is responsible for protecting consumers and ensuring financial service providers, like student loan servicers, are following the law. If you have been the victim of a student loan related scam, are having an issue with a loan servicer, or you suspect that you’ve been the victim of unfair, unlawful, deceptive, or abusive practices (UDAP), contact the DFPI toll-free at (866) 275-2677 or Ask.DFPI@dfpi.ca.gov or File a Complaint online.
Reminder: Required Lists of Bank Offices Now Past Due
Pursuant to Financial Code Section 1077, all commercial banks, industrial banks and trust companies are required to file a list of all offices currently maintained and operated by the bank. The report shall designate the type and complete address of each such office. Please note this requirement does not apply to other licensee types, such as foreign banking organizations, credit unions, money transmitters, etc. Licensees that did not send in the required report of offices on or before January 1 should do so as soon as possible.
For the purposes of section 1077, please provide the DFPI the following information:
- Name of bank
- Popular name of branch offices and facilities
- Office type (include the head office, branch and facility locations; do not include free-standing ATMs)
- Street address, including city, state, country and ZIP code.
Responses may be emailed to Licensing@dfpi.ca.gov or sent by regular mail to Department of Financial Protection and Innovation, One Sansome Street, Suite 600, San Francisco, CA 94104 Attn: Licensing Section.
For questions, please contact Patrick Carroll at Patrick.Carroll@dfpi.ca.gov or (415) 263-8559.
Reminder: Banks and Credit Unions to Report Fee Income from Nonsufficient Funds and Overdraft Charges by March 1
As a result of SB 1415, state-chartered banks and credit unions are required to notify the Department of Financial Protection and Innovation (DFPI) annually of the revenue they received from fees on nonsufficient funds and overdraft charges during the calendar year. These reports are due by March 1 so the DFPI can publish the information on its website by March 31.
DFPI has developed a data collection and reporting process. On Friday December 30, reporting institutions received an email from firstname.lastname@example.org. The email has a unique, secure URL provided by FORM.com, which the DFPI uses to collect and store report data. FORM.com complies with state IT security requirements and has extensive security measures in place to protect your/our data. Please be sure the email did not end up in your spam folder or get blocked by your firewall.
If you have questions about the report content, please refer to the FAQs or contact Derek Nelson at email@example.com (banks) or Kim-Phuong Hoang at firstname.lastname@example.org (credit unions) for more information.
If you have technical questions about the report link or submission, please send an email to Survey@dfpi.ca.gov.
Acquisition of Control
Strategic Value Investors, LP (the “Fund”); Strategic Value Bank Partners, LLC; Strategic Value Private Investors, LP; Strategic Value Private Partners, LLC; and Messrs. Benjamin Mackovak and Martin Adams, to acquire control of Community Bank of the Bay
Purchase of Partial Business Unit
First Northern Bank of Dixon to acquire the banking business of three branch offices of Columbia State Bank
Change of Name
Bank of Hemet, The, to change its name to HCN Bank
Fresno First Bank, to change its name to FFB Bank
Premium Finance Company Activity
New Premium Finance Company
Argent Premium Finance Inc.
2283 Bayleaf Drive, San Ramon
Rescue Premium Finance Corp.
660 Newport Center Drive, Newport Beach
X Capital Lending, Inc.
660 Newport Center Drive, Newport Beach
Acquisition of Control
Linda A. Roberson Survivor’s Trust, to acquire 50% control of Snowcrest Funding, Inc.
Foreign (Other State) Bank Activity
500 Ygnacio Valley Road, Walnut Creek (Insured facility)
Stifel Bank & Trust
500 Ygnacio Valley Road, Walnut Creek (Insured facility)
Money Transmitter Activity
Voluntary Surrender of License
CLOTHILDE V. HEWLETT Commissioner, Financial Protection and Innovation
The January 2023 Monthly Bulletin covers the month ended December 31, 2022.
It is issued pursuant to Financial Code section 376.
The Monthly Bulletin is available at no charge via e-mail.
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