Monthly Bulletin – July 2023
Volume 10, Number 12
2023-24 Assessment Rates for Financial Institutions
On June 30, invoices for the 2023-24 annual assessment were emailed to credit unions and money transmitters. Licensees that did 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 Aug. 1, with more time allowed for payments made via electronic funds transfers (EFT). EFT payments are due by Aug. 8.
On July 21, the invoice for the 2023-24 annual assessment will be emailed to commercial banks, industrial banks, and trust companies. 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 21, with more time allowed for payments made via electronic funds transfers (EFT). EFT payments are due by August 28.
The assessment rates for various types of financial institutions is:
- Commercial Banks, Foreign Banks, and Trust Companies: The base rate was set at $1.76 per $1,000 of assets, a $0.37 increase from last year’s rate of $1.39.
- Credit Unions: The base rate was set at $0.99 per $1,000 of assets, a $0.02 reduction from last year’s rate of $1.01.
- Industrial Banks: The base rate was set at $1.76 per $1,000 of assets, an increase of $0.37 from last year’s rate of $1.39.
- Money Transmitters: The assessment rate was set at $0.013 per $1,000 received for transmission by a licensee in calendar year 2022, a decrease of $0.001 from last year’s rate. The 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 firstname.lastname@example.org. Questions regarding assessment payment processing should be directed to the Accounts Receivable Unit at AccountingAR@dfpi.ca.gov.
IT System Survey for Banks, CUs
The DFPI is preparing to send out its biennial IT survey to all banks, including Foreign Banking Organizations, Credit Unions, and Trust Companies. The survey will be emailed on July 27, 2023, to each institution’s designated email address in accordance with Financial Code section 331.5. Please take a moment to ensure that an appropriate email address is on file, and that the mailbox is monitored regularly.
The email will contain a secure link to your individual institutions survey. The electronic 2021 IT Systems Survey is designed to help the DFPI assess the level of each licensee’s IT risk, allocate resources, and prepare for examinations.
Licensees are required to submit the survey pursuant to Financial Code section 455. Responses are kept confidential and used only in the examination process.
The survey will be sent out on July 27, 2023, and will be due no later than August 30, 2023. If you have questions, please contact:
For Banks, Trust Companies, Foreign Banks, and Foreign Branches:
For Credit Unions:
Senior Financial Institutions Examiner Eric Kwon at email@example.com.
For technical concerns:
Credit Union Mortgage Insurance Requirements
DFPI Commissioner Clothilde Hewlett has waived some mortgage insurance requirements for state-chartered credit unions.
Pursuant to Financial Code section 14201, the Commissioner has waived the provision in California Code of Regulations, Title 10, section 30.802(a)(1)(B), requiring mortgage insurance on loan amounts in excess of 80 percent of the appraised value of the improved real property. The order does not waive any other requirement in section 30.802.
The order is effective as of June 22, 2023, and shall remain in effect until revoked, amended, or by further order of the Commissioner.
To view the Order, click here.
Student Loan Enforcement Action
On July 13, the DFPI joined several state attorneys general and the Consumer Financial Protection Bureau (CFPB) in filing a complaint against Prehired, LLC and its related entities in U.S. Bankruptcy Court for violations of the Consumer Financial Protection Act of 2010 (CFPA).
Prehired offered students unfair and deceptive income share agreements (ISAs) to pay for Prehired-provided training as a percentage of future income. The complaint seeks a declaration that Prehired’s conduct is in violation of the CFPA, a permanent injunction to stop violations of the CFPA, full restitution to injured consumers, disgorgement, civil monetary penalties, and rescission of contracts where necessary to redress injury to consumers.
NASAA Securities Violation Order
On July 11, the DFPI announced a multi-state settlement with Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. for the firms to pay at least $8.2 million in refunds to clients and $4.2 million in penalties and costs to the states for failing to ensure reasonable commission charges on equity transactions, harming main street investors.
In California, Raymond James will pay full restitution of not less than $460,000, plus interest in the amount of 6 percent, to customers with transactions that included an unreasonable commission for services performed (i.e., in excess of 5 percent of the principal trade amount) from July 1, 2018, through July 17, 2023. The settlement stems from a North American Securities Administrators Association (NASAA) investigation spearheaded by state securities regulators from Alabama, California, Illinois, Massachusetts, Montana, and Washington.
DFPI Action Against CryptoFX for Securities Violations
On June 27, the DFPI issued a desist and refrain order against CryptoFX LLC and two of its promoters for violating California securities laws by offering and selling unqualified securities and making material misrepresentations and omissions to investors. The DFPI ordered the company to stop soliciting investments and making misrepresentations about returns. Beginning in February 2022, CryptoFX, also known as CryptoFX Academy, CryptoFX Learning Academy, CFX Lifestyle Academy, CFX Academy, and CFX, targeted the Latino community for its investment scheme. Using word-of-mouth solicitations, in-person meetings, and a recruitment network, promoters solicited investors to give their money to CryptoFX to purportedly invest in crypto assets. CryptoFX operated as a classic affinity fraud. The DFPI’s order is one of many enforcement actions taken in the past year to protect consumers from crypto scams and frauds. Learn more about CryptoFX and the red flags to watch out for on the DFPI website.
Annual Report of the DFPI Student Loan Ombudsman
The DFPI has published its first Annual Report of the Student Loan Ombudsman. In 2020, Governor Gavin Newsom signed Assembly Bill 376, also known as the California Student Borrower Bill of Rights, into law. The Student Borrower Bill of Rights establishes a comprehensive framework of rights and protections for Californians with student loans. It also establishes a Student Loan Servicing Ombudsman within the DFPI whose statutory duties include tracking complaints, providing information to the public, coordinating with state and federal agencies, and issuing an annual report summarizing activities to implement the Student Borrower Bill of Rights. Pursuant to the Student Borrower Bill of Rights, this report covers all DFPI activity coordinated by the Ombudsman in the 2022 calendar year, with information about student loan complaints, borrower inquiries, and other DFPI oversight activities. The report also contains a summary of activities related to the DFPI’s Back on Track communications outreach campaign.
2022 Reports on Increased Access to Responsible Small Dollar Loans and Non-Profits
The DFPI has published the 2022 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 2022 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.
AI and Crypto Scams Financial Education Webinar
On July 19 at 6:30 p.m., the DFPI will co-host with Assemblymember Cottie Petrie-Norris (AD73) a Financial Education webinar as part of the DFPI monthly webinar series.
Join to learn how you can stay safe from financial fraud and scams. The July 19 event is titled “Avoid AI Scams and Use Caution with Crypto” and will feature guest speaker DFPI attorney Trevor Carroll.
Visit the DFPI events page for more information on this and other webinars.
CSBS Community Bank Sentiment Index
Community bankers’ outlook on economic conditions has dropped to a new low in the most recent Community Bank Sentiment Index (CSBI), released on July 6 by the Conference of State Bank Supervisors (CSBS). Concerns about regulatory burden, monetary policy, future business conditions and future profitability dropped the CBSI to 73, falling 10 points from the previous quarter and to the lowest recorded level since the survey began in 2019.
The CBSI surveys community bankers nationwide in the last month of each quarter to capture their thoughts on future economic conditions in seven areas. An index reading of 100 indicates a neutral sentiment. Anything above 100 indicates a positive sentiment, and anything below 100 indicates a negative sentiment. Quarterly results are included in the Federal Reserve Economic Data, the online database maintained by the Federal Reserve Bank of St. Louis known informally as the FRED.
FFIEC 2022 Data on Mortgage Lending Now Available
On June 29, the Federal Financial Institutions Examination Council (FFIEC) announced the availability of data on 2022 mortgage lending transactions reported under the Home Mortgage Disclosure Act (HMDA) by 4,460 U.S. financial institutions, including banks, savings associations, credit unions, and mortgage companies.
The HMDA data are comprehensive publicly available information on mortgage market activity. The data are used by industry, consumer groups, regulators, and others to assess potential fair lending risks and for other regulatory and informational purposes. The data help the public assess how financial institutions are serving the housing needs of their local communities and facilitate federal financial regulators’ fair lending, consumer compliance, and Community Reinvestment Act examinations. The Snapshot National Loan-Level Dataset contains the national HMDA datasets as of May 1, 2023.
The FFIEC also released several other data products to serve a variety of data users. Additional summary information regarding the 2022 data may be found here.
Beach Cities Commercial Bank
100 Progress, Irvine
Phone #: (949)704-1010
Kent Falk, Chief Executive Officer
Jeff Redeker, President
Nasrin Rostami, EVP/Chief Operating Officer
Premium Finance Company Activity
New Premium Finance Company
955 Alma Street, Palo Alto
Ethos Premium Financing, Inc.
660 Newport Center Drive, Newport Beach
Credit Union Activity
Sequoia Federal Credit Union, Redwood City, to merge with and into PremierOne Credit Union, San Jose
Trust Company Activity
Voluntary Surrender of License
Sunstone Trust Company
18881 Von Karman Avenue, Irvine
Foreign (Other Nation) Bank Activity
Voluntary Surrender of License
Banco Bilbao Vizcaya Argentaria, S.A.
100 First Street, San Francisco (Representative Office)
CLOTHILDE V. HEWLETT Commissioner, Department of Financial Protection and Innovation
The July 2023 Monthly Bulletin covers the month ended June 30, 2023.
It is issued pursuant to Financial Code section 376.
The Monthly Bulletin is available at no charge via e-mail.
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