Monthly Bulletin – March 2023
Volume 10, Number 8
DFPI Takes Possession of Silicon Valley Bank
On March 10, the DFPI announced that, pursuant to California Financial Code section 592, it took possession of Silicon Valley Bank, citing inadequate liquidity and insolvency. The DFPI appointed the Federal Deposit Insurance Corporation (FDIC) as receiver of Silicon Valley Bank.
On March 12, the FDIC announced actions to complete its resolution of Silicon Valley Bank “in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
Also on March 12, the Federal Reserve Board announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.
Silicon Valley Bank is a state-chartered commercial bank based in Santa Clara and a member of the Federal Reserve System, with total assets of approximately $209 billion and total deposits of approximately $175.4 billion as of Dec. 31, 2022. Its deposits are federally insured by the FDIC subject to applicable limits.
For information about FDIC coverage limits and requirements, visit www.fdic.gov or call toll-free 1-877-ASK-FDIC.
Silvergate Bank to Begin Voluntary Liquidation
On March 8, the DFPI announced that Silvergate Bank, a state-chartered bank under the supervision of the DFPI, voluntarily began the process of liquidation. Silvergate Bank is based in La Jolla, CA and served as one of the major banks for the crypto industry.
In a statement, DFPI Commissioner Clothilde V. Hewlett said “the Department of Financial Protection and Innovation is monitoring the situation closely to facilitate the safe and expeditious voluntary liquidation of Silvergate Bank. The Department is evaluating compliance with all financial laws, as well as safety and soundness obligations, and is working closely with relevant Federal counterparts.”
Rebecca Martin Selected as Deputy Commissioner for Consumer Services
On March 2, Rebecca Martin joined the Department of Financial Protection and Innovation as Deputy Commissioner for Consumer Services. Rebecca has more than 20 years of experience in multiple roles working for the California Department of Motor Vehicles. She has extensive knowledge and experience in the critical day-to-day operations of the DMV Command Center, which oversees three large contact centers and handles more than 12 million contacts annually. While in the Command Center, Rebecca managed several high-performing teams and worked seamlessly in the ever-changing, fast-paced environment during several phone platform migrations.
Rebecca’s experience overseeing a command center’s daily operations and data analytics will be an invaluable asset for the DFPI. Her contributions in modernizing DMV contact centers include onboarding the Amazon Web Services Connect and ‘Nice in Contact’ telephone platforms, a live chat program, and an artificial intelligence bot on the interactive voice response system that allows customers the ability to self-service. Rebecca was recognized as Supervisor of the Month for her significant contributions to the DMV Contact Centers and for recovering over $1.2 million in erroneous billing.
DFPI Launches Scam Tracker to Help the Public Spot Crypto Scams
On Feb. 16, the DFPI announced the launch of the DFPI Crypto Scam Tracker to help Californians spot and avoid crypto scams. The tracker details apparent crypto scams identified through a review of complaints submitted by the public and allows California consumers and investors to do their own research and prevent harm to themselves and others.
“Scammers are in the shadows using the public’s interest in crypto assets to take advantage of the most vulnerable Californians. Through the new Crypto Scam Tracker, combined with rigorous enforcement efforts, the DFPI is committed to shining a light on these ruthless predators and protecting consumers and investors,” said DFPI Commissioner Clothilde Hewlett.
The Crypto Scam Tracker is a database that is searchable by company name, scam type, or keywords to learn more about the crypto specific complaints the DFPI has received. An accompanying glossary aims to help consumers better understand common scams. As reports of new crypto scams emerge, the DFPI will continually update this tracker to promptly alert and protect the public.
The DFPI receives thousands of consumer and investor complaints each year. The tracker’s content is based on information reported by members of the public to the DFPI. The DFPI has not verified the losses reported by complainants. The announcement of the Crypto Scam Tracker received wide coverage with crypto-oriented media outlets and national news publications.
DFPI Continues Crackdown on Student Loan Debt Relief Companies
On Feb. 28, the DFPI announced that it entered into a Consent Order with an unlicensed Orange County student debt relief company, EDU Doc Support, LLC (EDU) and its owner, Hau H. Nguyen (Nguyen). The announcement is part of a continuing crackdown against student loan debt relief companies violating the California Consumer Financial Protection Law (CCFPL) and the Student Loan Servicing Act (SLSA). As part of the DFPI order, EDU and Nguyen were ordered to rescind all debt relief, debt management, or debt consulting service agreements, and provide refunds to California consumers. See the consent order for details.
Student loan debt relief companies purport to help student loan borrowers manage or reduce their student loan repayment for a fee. Often these companies charge fees for services that federal loan servicers provide at no charge or that borrowers can do on their own. Borrowers can educate themselves on their options to manage or reduce monthly payments by asking their servicer for income-driven repayment or pausing loans by applying for forbearance. Read more on student debt relief companies on the DFPI website.
For questions about the annual reports, call Sultanna Wan at (213) 248-7161.
SLSA Proposed Regulations – Invitation for Comments
After consideration of public comments to the modified proposed regulations under the Student Loan Servicing Act (SLSA), the Commissioner has proposed additional changes to the regulations, and invited public comment during a 15-day comment period. The deadline for comment is March 23.
BDIA Online Examination Commences April 3
The 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 is scheduled to commence on April 3, 2023. If selected the advisory firm will be notified on April 3, 2023, and required to complete and submit the online examination by May 19, 2023. 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 will use the Investment Adviser email 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 is paid to communications from DFPI.
If you have any questions or inquiries, please contact the Division at CADFPIexams@dfpi.ca.gov.
Mortgage Lending Holden Act Reports Due March 31
Mortgage lending licensees must file their Residential Mortgage Loan Report for calendar year 2022 (Holden Act Report) no later than March 31.
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 March 31st . to Holden.Inquiries@dfpi.ca.gov. Information regarding the report may be obtained by calling (866) 275-2677.
Commercial Bank Activity
Bank of the West, San Francisco, California to merge with and into BMO Harris Bank N.A., Chicago, Illinois
Acquisition of Control
Driver Management Company LLC, to acquire control of First Foundation Bank
Premium Finance Company Activity
New Premium Finance Company
Peak Premium Financing Corporation
660 Newport Center Drive, Newport Beach
Premium Financial Partners Co.
8272 Sunset Boulevard, West Hollywood
TWFG CA Premium Finance Company
860 Hillview Ct, Milpitas
Walco Funding PFCA, Inc.
6200 Canoga Avenue, Woodland Hills
Voluntary Surrender of License
AIB Financial Services, Inc.
Credit Union Activity
Voluntary Surrender of License
San Fernando Valley Japanese Credit Union
Foreign (Other Nation) Bank Activity
Credit Agricole Corporate and Investment Bank
2420 Sand Hill Road, Menlo Park (Representative Office)
Foreign (Other State) Bank Activity
35 S. State College Boulevard, Brea (Insured facility)
Money Transmitter Activity
Acquisition of Control
BTO Mythos Holdings (CYM) – NQ L.P., to acquire control of Currencies Direct Inc.
CLOTHILDE V. HEWLETT Commissioner, Department of Financial Protection and Innovation
The March 2023 Monthly Bulletin covers the month ended Feb 28, 2023.
It is issued pursuant to Financial Code section 376.
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