Monthly Bulletin – June 2023
Volume 10, Number 11
Annual Report Shows Continued Success with Consumer Protection Law
In 2020, California launched one of the most expansive consumer financial protection laws in the nation – the California Consumer Financial Protection Law (CCFPL). Two years into its implementation, the Department of Financial Protection and Innovation (DFPI) has:
Contents
- Received nearly double the complaints regarding products and services subject to the CCFPL compared to 2021, including a 238 percent increase in crypto-related complaints.
- Served more than 105,000 Californians through education and outreach programs.
- Launched a three-month, multimedia communications campaign that generated 55.7 million impressions statewide.
- Leveraged its authority under the CCFPL to enforce multiple consumer financial laws and respond to emerging products, services, and scams, increasing investigations under the law by 85 percent.
Now posted to the DFPI website, the 2022 Annual Report of Activity Under the California Consumer Financial Protection Law highlights the work by the DFPI in meeting the mandate of the CCFPL to better meet the most urgent consumer needs of Californians by expanding our reach over the financial services marketplace and holding firms and individuals accountable through oversight and enforcement and fostering responsible innovation.
The DFPI has established itself as a national leader in the area of consumer protection, notably in outreach and support for student loan borrowers and crypt asset customers. We have seen success in identifying and cracking down on scams in these and other areas. And through implementation of elements of the CCFPL, such as the Office of Financial Technology Innovation and our world-class research team, the DFPI has evolved to meet the challenges of the ever-expanding financial services marketplace. For more information, see the CCFPL report page.
DFPI Action Against Crypto Exchange Platform Coinbase
On June 6, the DFPI issued an action against Coinbase Global, Inc. and Coinbase, Inc. for violations of securities laws and corresponding penalties in connection with Coinbase’s staking rewards program.
The action is the result of a multi-state task force of 10 state securities regulators led by California that also includes Alabama, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin. The DFPI acknowledges the SEC’s concurrent efforts to enforce securities laws and appreciates the inter-agency communication regarding this action.
DFPI Debt Collector Enforcement Sweep
On June 5, the DFPI issued enforcement actions against Allen and Associates, Blackrock Legal Group, and RM Legal for unlicensed debt collection activity. These actions follow previous debt collection action sweeps demonstrating the DFPI’s focus on debt collectors that violate the law. The DFPI ordered the subjects to pay penalties totaling $85,000 and to desist and refrain from violating consumer protection laws.
Silvergate Bank Liquidation
On June 1, the DFPI issued a joint consent order with the Federal Reserve Board of Governors (FRB) to facilitate the implementation of its voluntary liquidation plan, which will include full repayment of all deposits at the Bank. The joint order aims to ensure the voluntary liquidation occurs in a safe and sound manner and in compliance with all applicable federal and state laws, rules, and regulations. Silvergate Bank was required to submit a liquidation plan for approval within 10 days to provide for the orderly wind-down of its operations.
DFPI Sues to Stop Precious Metals Fraud
On May 15, the DFPI, in partnership with the federal Commodity Futures Trading Commission (CFTC) and the State of Hawaii securities regulator, filed a federal lawsuit in Los Angeles against Red Rock Secured, a precious metals dealer, and its majority owner and sales agent for perpetrating an approximately $60 million fraudulent scheme that targeted customers’ retirement savings.
The lawsuit alleges that Defendants steered potential customers into purchasing silver and gold Canadian Red-Tailed Hawk (RTH) coins and misled customers into believing that Red Rock charged a relatively low markup on the sale of its RTH coins,
Some Escrow Reports Due June 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 Feb. 28, 2023, your annual report is due June 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.
June 13 Escrow Advisory Committee Meeting
The next Escrow Law Advisory Committee meeting will be on Tuesday, June 13, 2023, at 10 a.m. PST. The meeting will be held at the Department of Financial Protection and Innovation’s Los Angeles office located at 320 West 4th Street in the 7th floor conference room.
Please contact Special Administrator Paul Liang in the Los Angeles office at (213) 576-7535 if you have any questions. The agenda for the June 13, 2023 meeting and the minutes for the March 14, 2023 meeting are available on the DFPI website.
CalMoneySmart Grants to Support Financial Education
The DFPI received 102 applications for the 2023-24 CalMoneySmart grant cycle. The Department has begun the application evaluation process, performed by the grants review team and CalMoneySmart Steering Committee.
CalMoneySmart grants support financial education and empowerment programs for unbanked and underbanked consumers in the state of California. This is the fourth year of grant funding. Last year, the program awarded nearly $2 million to twelve nonprofit organizations serving 27 counties across the state.
An announcement of awardees for the 2023-24 CalMoneySmart grantee cohort is expected in July. More information for CalMoneySmart applicants can be found at dfpi.ca.gov/calmoneysmart. For questions, comments, or help, please contact grants@dfpi.ca.gov.
“Path to Homeownership” Webinar
On June 26, the DFPI will participate in a “Path to Homeownership” webinar hosted by the California Housing Finance Agency (CalHFA). The webinar will advise of the many assistance programs available to homebuyers and tips to avoid fraud and scams. Registrants will receive the presentation slides and a link to the recording. Register online. This webinar is hosted by the DFPI as part of its Monthly Consumer Financial Education Webinar Series. Guest speaker is CalHFA.
DFPI Californians with Student Loans Webinar on July 12
Californians with student loans are invited to a DFPI webinar titled “Understanding the One-Time Income-Driven Repayment Adjustment.”
This is the first in a series of DFPI-hosted student loan-focused webinars featuring nationally-recognized student loan expert Betsy Mayotte from The Institute of Student Loan Advisors (TISLA). Register online.
For videos of past student loan workshops, visit the DFPI “Californians with Student Loans” playlist set up on our YouTube Channel.
SEC, NASAA, FINRA Webinar on Senior Financial Exploitation
On June 15, the Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA) and the Financial Industry Regulatory Authority (FINRA) will co-host the Senior Safe Act Webinar: Identifying and Reporting Suspected Exploitation.
The webinar will be held on World Elder Abuse Awareness Day and is open to the public. The discussion will build on the SEC, NASAA and FINRA’s joint training released in 2021 on Addressing and Reporting Financial Exploitation of Seniors and Vulnerable Adult Investors. Visit FINRA to register.
CSBS Community Bank Sentiment Index
Banks are encouraged to participate in the 2nd quarter 2023 Conference of State Bank Supervisors (CSBS) Community Bank Sentiment Index (CBSI) survey, which is open until June 30. The survey gauges the economic outlook of community banks across the nation on a quarterly basis.
The CBSI captures what community bankers nationwide think about the future and is included in the Federal Reserve Economic Data, the online database maintained by the Federal Reserve Bank of St. Louis known informally as the FRED. Responses are analyzed and compiled into a single number. Anything above 100 indicates a positive sentiment, and anything below 100 indicates a negative sentiment.
Last year, the CBSI fell to 83, its lowest record since the survey began in 2019. Responding to two special questions, 94% of community bankers believe the U.S. economy is in a recession and rated their top concerns for 2023 as: government regulation, inflation, cyberattacks and the cost/availability of labor. For more information about the CBSI, visit: csbs.org/cbindex. You can also listen to a podcast about the CBSI here.
LICENSEE ACTIVITY
Bank Activity
New Bank
Entrust Bank
Proposed location: Street address to be determined in Downtown Los Altos, Los Altos
Correspondent: James B. Jones
Carpenter & Company, 23 Corporate Plaza Drive, Suite 150, #D-11, Newport Beach, CA 92660
Phone: 949-261-8888
Filed: 5/15/23
Acquisition of Control
Driver Management Company LLC, to acquire control of First Foundation Bank
Approved: 5/04/23
Selwyn Isakow, to acquire control of Private Bancorp of America, Inc.
Filed: 5/10/23
Approved: 5/17/23
Merger
Gateway Bank, F.S.B., Oakland, to merge with and into Royal Business Bank, Los Angeles
Withdrawn: 5/05/23
Surrender of Trust Powers
Manufacturers Bank, to surrender its trust powers
Filed: 3/21/23
Approved: 3/27/23
Effected: 3/31/23
Premium Finance Company Activity
New Premium Finance Company
Argent Premium Finance Inc.
2283 Bayleaf Drive, San Ramon
Opened: 5/08/23
Central Valley Premium Finance Inc
241 Merida Way, Livingston, Merced County
Filed: 5/30/23
Credit Union Activity
Merger
North County Credit Union, San Diego to merge with and into BluPeak Credit Union, San Diego
Withdrawn: 5/05/23
Foreign (Other State) Bank Activity
Acquisition of Control
Independent Trust Company, LLC
3250 Grey Hawk Ct., Carlsbad (Facility – non-insured)
Filed: 5/19/23
Money Transmitter Activity
New Transmitter
Ramp Payments Corporation
Filed: 5/22/23
CLOTHILDE V. HEWLETT Commissioner, Department of Financial Protection and Innovation
The June 2023 Monthly Bulletin covers the month ended May 31, 2023.
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.
Back to the top of this newsletter
