Monthly Bulletin – February 2024
Volume 11, Number 7
Reminder: Mandatory Filing for Digital Financial Asset Transaction Kiosk Operators Now in Effect
Pursuant to the Digital Financial Assets Law which became effective January 1, 2024, the Department requests kiosk operators submit a list of kiosks to the Department no later than March 15, 2024. The new Digital Financial Assets Law also requires a kiosk operator to submit updates to the Department within 30 days of any changes, and places additional obligations for kiosk operators.
A digital financial asset transaction kiosk is defined as an electronic information processing device that is capable of accepting or dispensing cash in exchange for a digital financial asset. For more information on the law and how to submit the kiosk location list, please visit our website: dfpi.ca.gov/dfal-kiosk/.
Contact the Department at crypto@dfpi.ca.gov. with questions. Subscribe here for updates related to digital financial asset transaction kiosk operators and the Digital Financial Assets Law.
Contents
Guidance Regarding Borrowers Affected by Severe Winter Storms, Flooding and Landslides
The DFPI has issued guidance directed to financial institutions, lenders, and mortgage servicers in California whose customers may be experiencing financial hardship as a result of recent severe winter storms, flooding, and landslides. The Department recognizes the serious impact to borrowers in communities affected by these natural disasters and encourages lenders and servicers to work with these customers to meet their financial needs.
The Commissioner encourages financial institutions, lenders, and servicers to work constructively with their customers and propose solutions to meet their lending needs as the recovery continues. Such solutions may include offering payment accommodations, such as deferrals or extensions, and loan modifications to the rate or term. Prudent efforts to modify or restructure the terms of loans will not be criticized by examiners. This guidance does not modify any existing law or regulation.
Furthermore, the Commissioner acknowledges that some licensees may experience an increase in delinquent or nonperforming loans and troubled debt restructures as a result of the financial impact to borrowers caused by the severe storm activity. The Commissioner will consider such increases in adversely classified assets within the context of the state of emergency, and supervisory responses will be measured and appropriate. The Commissioner supports and will not criticize efforts to accommodate customers in a safe and sound manner.
On January 23 and February 4, 2024, Governor Gavin Newsom proclaimed a state of emergency in parts of California as a result of the winter storms. These storms caused flooding, closure and damage to roadways, power outages, damage to structures, and mandatory evacuations in certain counties.
Order Against TradeStation Crypto Interest-Earning Program
On Feb. 7, the DFPI announced a consent order with TradeStation Crypto, Inc. (TradeStation) to resolve the DFPI’s securities investigation into TradeStation’s crypto interest-earning program. This order is part of a multistate settlement that is the result of a North American Securities Administrators Association (NASAA) task force of eight state securities regulators co-led by California and Washington that also includes Alabama, Mississippi, North Carolina, Ohio, South Carolina, and Wisconsin. The task force determined that from August 2020 to June 2022, TradeStation engaged in the unqualified offer and sale of securities via its crypto interest-earning program.
Order Against Deceptive “Junk Fees”
All escrow agents licensed prior to Jan. 1, 2024, must submit an Annual Liability Report to the DFPI. The Annual Liability Report form is now available on DFPI’s website here. The deadline to submit the Annual Liability Report electronically is Feb. 15, 2024. A DFPI portal account is required to submit the Annual Liability Report. To register for a portal account, go to DFPI’s website here. Licensees are strongly encouraged to begin gathering the data to ensure they can timely file the Annual Liability Report. Failure to submit the Annual Liability Report by the deadline may result in monetary penalties pursuant to Financial Code section 17408. For questions, please email ESCLiabilityReportFiling@dfpi.ca.gov.
Reminder: 2023 Escrow Annual Liability Report Due Feb. 15
A reminder that all escrow agents licensed prior to Jan. 1, 2024, must submit an Annual Liability Report to the DFPI. The Annual Liability Report form is now available on DFPI’s website here. The deadline to submit the Annual Liability Report electronically is Feb. 15, 2024.
A DFPI portal account is required to submit the Annual Liability Report. To register for a portal account, go to DFPI’s website here. Licensees are strongly encouraged to begin gathering the data to ensure they can timely file the Annual Liability Report. Failure to submit the Annual Liability Report by the deadline may result in monetary penalties pursuant to Financial Code section 17408.
For questions, please email ESCLiabilityReportFiling@dfpi.ca.gov.
Debt Collection Advisory Committee Meeting Feb. 15
The Debt Collection Advisory Committee advises Commissioner Clothilde V. Hewlett on matters related to the debt collection industry. The next meeting of the Debt Collection Advisory Committee will be held Thursday, Feb. 15, 2024, from 10:30 a.m. to 12 p.m. The Zoom meeting information is available on the Department website. This will be a hybrid meeting and some participants will be in the Sacramento office.
2023 Annual Reports for CRMLA, CFL, CDDTL, SLSA, and DCLA Due in March
Annual reports for 2023 for DFPI Mortgage Lending (CRMLA), Finance Lenders (CFL), Payday Lenders (CDDTL), Student Loan Services (SLSA) and Debt Collectors (DCLA) are due in March.
A registered DFPI portal account is required to submit the Annual Report. To register for a portal account, go to the DFPI’s website here. Licensees are strongly encouraged to begin gathering the data early to ensure timely filing of the 2023 Annual Report.
California Residential Mortgage Lending Act (CRMLA)
Licensees under the California Residential Mortgage Lending Act (CRMLA) must file their 2023 annual report electronically by March 1, 2024. Missing the deadline may result in penalty assessments; failure to file constitutes grounds for license revocation. For questions about the content of the Report or clarification on the instructions, please email CRMLA.Exams@dfpi.ca.gov.
California Financing Law (CFL)
All DFPI licensees under the California Financing Law (CFL) are required to submit an annual report on or before March 15, 2024, even if the licensee had no business activity in the calendar year 2023. Failure to submit the annual report by the due date will result in penalties pursuant to Financial Code section 22715(b). Click here for a penalty matrix reflecting the penalties assessable based on the late-filing date. For questions about the content of the Report or clarification on the instructions, please email CFL.AnnualReport@dfpi.ca.gov or call (866) 275-2677.
California Deferred Deposit Transaction Law (CDDTL)
All licensees under the California Deferred Deposit Transaction Law (CDDTL), also known as payday lending, must submit an Annual Report and Industry Survey (Annual Report) to the DFPI by March 15, 2024, even if the licensee had no business activity in calendar year 2023. Failure to submit the Annual Report by the deadline may result in financial penalties pursuant to Financial Code section 23058 or summary revocation pursuant to Financial Code section 23053. For questions about the content of the Report or clarification on the instructions, please email RespondToCDDTL@dfpi.ca.gov.
Student Loan Servicing Act (SLSA)
Each student loan servicer is required to file an annual report with the DFPI on or before March 15, 2024, per Financial Code Section 28146(a) of the Student Loan Servicing Act (SLSA). All student loan servicers licensed prior to Jan. 1, 2023, must file the report, even if no business was conducted. Failure to submit the Annual Report by the due date may result in penalties pursuant to Financial Code Section 28154. For questions about the content of the Report or clarification on the instructions, please email the Student Loan Servicing Program at studentloanservicing@dfpi.ca.gov.
Debt Collection Licensing Act (DCLA)
All licensees under the Debt Collection Licensing Act (DCLA) must submit an Annual Report to the DFPI by March 15, 2024, per Financial Code section 100021(a) (1) – (4), (6) and (7). For questions about the content of the Report or clarification on the instructions, please email DCLA.Inquiries@dfpi.ca.gov or call (916) 576-8623.
Mortgage Lending Holden Act Reports Due March 31
Mortgage lending licensees must file their Residential Mortgage Loan Report for calendar year 2023 (Holden Act Report) no later than March 31, 2024.
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 31 to Holden.Inquiries@dfpi.ca.gov. Information regarding the report may be obtained by calling (866) 275-2677.
REMINDER: Banks and Credit Unions to Report Fee Income from NSF and Overdraft Charges
State-chartered banks and credit unions are required to report annually to the DFPI the revenue received from fees on nonsufficient funds and overdraft charges during the calendar year. The requirement is per Financial Code Section 521. These reports are due by March 1 so the DFPI can publish the information on its website by March 31. On Dec. 29, the DFPI sent an email with a report link to the designated email address of each reporting institution. Please refer to the FAQs or contact Marilyn Davis at marilyn.davis@dfpi.ca.gov (banks) or Kim-Phuong Hoang at kim-phuong.hoang@dfpi.ca.gov (credit unions) for more information.
Consumer Webinar March 6
The DFPI hosts a monthly consumer financial education webinar exploring a new topic every month. Each webinar includes guest speakers and a Q&A session. Everyone who registers for these webinars will be emailed a link to the recording and a copy of the slides. Past presentations in the series may be viewed on the DFPI YouTube site.
The next webinar, “Managing and Getting Out of Debt,” is scheduled for March 6 at 12 Noon, PST (Registration). Topics that will be discussed include:
- Creating and maintaining a budget
- Strategies to paying down debt
- Negotiating debts and interest rates
- Debt consolidation and bankruptcies
- Building an emergency fund
- Developing health spending habits
LICENSEE ACTIVITY
Commercial Bank Activity
New Bank
Culver Community Bank
Proposed location: 6125 Washington Boulevard, Culver City
Correspondent: James B. Jones
Carpenter & Company, 23 Corporate Plaza Drive, Suite 150, Newport Beach, CA 92660
Filed: 01/02/24
Elemi Bank
Proposed location amended from Encino to Burbank
Correspondent: James B. Jones
Carpenter & Company, 23 Corporate Plaza Drive, Suite 150
Newport Beach, CA 92660
Tel: 949-261-8888
Application amended: 11/29/23 – name changed from United Community Bank
Merger
Community West Bank, NA., Goleta, to merge with and into Central Valley Community Bank, Fresno with a change of name to “Community West Bank”
Approved: 01/12/24
Credit Union Activity
Conversion
CoastHills Credit Union, Santa Maria, to convert to federal charter
Effected: 01/19/24
Premium Finance Company Activity
New Premium Finance Company
Apex Finance, Inc.
510 Myrtle Avenue, South San Francisco
Approved: 01/19/24
Money Transmitter Activity
New Money Transmitter
Brex Payments LLC
Opened: 01/08/24
Acquisition of Control
Digital Capital Holdings LLC & Agau Holdings Corp. to acquire control of GroupEx Financial Corporation
Filed: 01/30/24
Voluntary Surrender
Rakuten Card USA, Inc.
Effected: 12/05/23
YapStone, Inc.
Effected: 01/11/24
CLOTHILDE V. HEWLETT Commissioner, Department of Financial Protection and Innovation
The February 2024 Monthly Bulletin covers the month ended January 31, 2024.
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.
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