Department of Financial Protection and Innovation Monthly Bulletin

Monthly Bulletin – October 2023

Volume 11, Number 3

Rules Finalized for Student Loan Servicing and Borrowers Rights

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Final regulations to implement the Student Loan Servicing Act and the Student Loans Borrower Rights Law have been approved and will become effective Jan. 1, 2024. The Department made changes to the original proposed rules and modified the text twice to ensure the regulations were consistent with servicers’ operations and businesses.

The Department’s objective in drafting these new rules is to include all education financing products used to finance a student’s higher education, including income share agreements and installment contracts, within the definition of student loans subject to state law. The rules also include servicers of these products subject to the Act and licensure.

The benefits anticipated from this regulatory action include protective benefits to student loan borrowers with education financing products, improved Department regulatory oversight of the servicer industry, and strengthened enforcement of the recent state laws regarding student loan servicing.

Documentation on the rules may be found at the DFPI Student Loan Servicing Act rulemaking page.

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CalMoneySmart Financial Education Grants Presentations

During September and October, DFPI visited with 2023-24 CalMoneySmart grantees to hear more about their operations and present a symbolic check for the amount of the 2023-24 CalMoneySmart grant awarded to 15 separate community-based organizations. Local media and elected officials were also invited to participate. One such event took place in San Francisco on Sept. 27, where DFPI Commissioner Cloey Hewlett made a presentation to MyPath of $150.000, where she was joined by State Senator Scott Wiener and MyPath associates.

DFPI commissioner holds a big check and a group of people standing together
Photo: (LtoR): MyPath CEO Margaret Libby; California State Senator Scott D. Wiener (D-11); DFPI Commissioner Clothilde Hewlett; MyPath BEEM Project Assistant Norel Knowles; MyPath Youth POWER Associate Alexis Moore; MyPath Youth POWER Member Joanne Yen; CANA CEO Roberto Hernandez. Photo credit: DFPI

The CalMoneySmart program provides annual grants of up to $200,000 to nonprofit organizations to provide financial education and financial empowerment programs and services for unbanked and underbanked Californians. Grant funding of $1,999,627 was awarded to 15 nonprofit organizations across California, expanding the reach of the program to 28 counties, the largest number to date.  Learn more about our 2023-24 grantees on the DFPI website.

Some Escrow Reports Due Oct. 13

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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 June 30, 2023, your annual report is due Oct. 13, 2023. Please have your CPA email your report to 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 Queen Padilla, 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 prompt an immediate examination (Financial Code section 17602.5).

For questions about the annual reports, email

DFPI Halts Securities Fraud Targeting Tongan Community

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On Sept. 21, the DFPI announced that it ordered Tilila Siola’a Walker-Sumchai of Stockton, California, and four entities under her control to desist and refrain from an alleged securities fraud scheme targeting Tongan communities across California.

The DFPI order alleges that Walker-Sumchai offered and sold unqualified securities under the “Tongi Tupe” brand name. In making these offers and sales, Walker-Sumchai made material misrepresentations and omissions to investors. As a result of these misrepresentations and omissions, the scheme collected more than $11.8 million from investors. The DFPI also alleges that Walker-Sumchai falsely claimed that she and her entities were licensed, registered, and qualified to offer securities or act as broker-dealers or investment advisers.

The enterprise targeted recent immigrants from Tonga, a nation located on a chain of islands in the South Pacific, and individuals of Tongan descent. Walker-Sumchai promoted the Tongi Tupe enterprise through Tongan-language video livestreams and posts on social media websites as well as a network of local “chapters” of two entities: American Tonga Global Diaspora PTOA and Ptoa Global Movement for the Poor. Prominent members of local communities were approached to invest in the scheme and act as presidents of the local chapters.

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DFPI and CFTC File Lawsuit Against Precious Metals Firm

On Sept. 28, the DFPI announced that, in partnership with the federal Commodity Futures Trading Commission (CFTC), filed a lawsuit in the United States District Court for the Central District of California centering on a $21 million fraudulent scheme that specifically targeted customers’ retirement savings. Regal Assets LLC, and two individual defendants, are alleged to have misappropriated these funds from more than 120 customers nationwide between November 2019 and October 2022.

Regal Assets LLC, a Southern California-based precious metals dealer, and two principals, Tyler G. Gallagher and Leah Donoso, are accused of engaging in the unlawful offer and sale of precious metals within California. Rather than using customer funds as intended for purchasing precious metals, the defendants are alleged to have diverted funds to cover business and personal expenses. To perpetuate their fraudulent activities, false and misleading information was provided to deceive customers.

The complaint seeks a permanent injunction, disgorgement, full restitution, rescission, and civil monetary penalties. The plaintiffs are seeking a jury trial. This collaborative effort between the California DFPI and the CFTC underscores the commitment of both agencies to protect consumers and their financial interests.

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PSLF Student Loan Webinar

On Oct. 18, the DFPI will host a student loan webinar titled “Understanding the Public Service Loan Forgiveness (PLSF) Program.” DFPI’s Student Loan Ombudsperson, Celina Damian, and nationally recognized student loan expert, Betsy Mayotte from The Institute of Student Loan Advisors (TISLA), will be the keynote speakers.

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Financial Education Webinar Series

On Oct. 25, the DFPI Education and Outreach unit continues its monthly Financial Education Webinar Series for 2023 with a webinar on investing. “Safe and Successful Investing Strategies” will feature guest speaker DFPI outreach director Kue Lee discussing tips to protect investors from fraud, how to check on brokers and investment advisers, and what to do when faced with a fraudulent scheme. Register on DFPI’s website.

DFPI Franchise and Securities Electronic Submission system

a desktop Computer

The DFPI is actively working on a new Franchise and Securities Electronic Submission (FRANSES) system to improve the usability and functionality of our self-service franchise and securities filing system (currently referred to as the DOCQNET Portal).

For more information about our new FRANSES system, estimated to launch in Q4 2024, sign up for email notifications (FRANSES Updates) to receive updates and future engagement opportunities.


CSBS 2023 Survey of Community Banks

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On Oct. 4, the Conference of State Bank Supervisors (CSBS) released its Community 2023 Annual Survey of Community Banks.

This is the 10th year of the survey, which canvassed 462 community banks with less than $10 billion in total assets. The survey captures community bankers’ views on key risks, compliance costs, technology, competition, and liquidity and funding, among other areas. The findings have implications for researchers, regulators, bankers, and policymakers.

Net interest margins, cost of funds and core deposits rated as the highest external concerns for community bankers. More than 86% of respondents named the cost of funds as either extremely or very important, up from the 48% who said so last year. Core deposits were also a concern, with 83% of respondents naming core deposit growth extremely or very important, up from 38% a year ago. Three-quarters viewed these challenges as manageable.

Community bankers ranked cybersecurity threats as their top internal concern once again. 83% of respondents cited liquidity concerns as extremely or very important compared to 35% a year ago. Nearly all banks surveyed identified adopting new or emerging technologies as important but cited costs and implementation as the largest impediments, followed by core service provider limitations.

CSBS released the survey at the Community Banking Research Conference, co-sponsored by CSBS, the Federal Reserve System and the FDIC, in St. Louis.

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Commercial Bank Activity

Acquisition of Control

Banc of California, Inc. to acquire control of PacWest Bancorp
Filed: 9/07/23

Premium Finance Company Activity

New Premium Finance Company

Apex Finance Inc.
510 Myrtle Avenue, South San Francisco
Filed: 9/15/23

Credit Union Activity


SESLOC Federal Credit Union, to convert to state charter
Filed: 6/05/23

Change of Name

San Mateo Credit Union, to change its name to Monterra Credit Union
Filed: 09/06/23
Effected: 9/22/23

Foreign (Other Nation) Bank Activity

New Office

ING Bank, N.V.
333 S. Grand Avenue, Los Angeles (Representative Office)
Opened: 7/10/23

Royal Bank of Canada
2 Embarcadero Center, San Francisco (Representative Office)
Approved: 9/12/23
Opened: 9/18/23

Voluntary Surrender of License

Banco Bilbao Vizcaya Argentaria, S.A.
100 First Street, San Francisco (Representative Office)
Effected: 9/29/23

Foreign (Other State) Bank Activity

New Office

Independent Trust Company, LLC
3250 Grey Hawk Ct., Carlsbad (Facility – non-insured)
Approved: 9/21/23

Money Transmitter Activity

New Transmitter

Affirm Payments LLC
Filed: 9/22/23

Wave Financial USA, Inc.
Withdrawn: 9/12/23

Voluntary Surrender

Lucky Money, Inc.
Effected: 7/25/23

Prabhu Group, Inc.
Effected: 8/28/23

Utopa America Inc.
Effected: 1/25/23

CLOTHILDE V. HEWLETT Commissioner, Department of Financial Protection and Innovation

The October 2023 Monthly Bulletin covers the month ended September 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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Last updated: Oct 12, 2023 @ 4:42 pm