Monthly Bulletin – March 2024
Volume 11, Number 8
California State Senate Confirms Greg Young as DFPI Senior Deputy Commissioner of Corporations and Financial Institutions
The California State Senate voted unanimously on March 4 to confirm Greg Young as Senior Deputy Commissioner of Corporations & Financial Institutions at DFPI. The Senate vote followed a unanimous vote by the Senate Rules Committee to recommend confirmation.
On March 29, 2023, Governor Gavin Newsom announced the appointment of Young as Senior Deputy at DFPI. He joined the Department on March 30 and is based in San Francisco.
Contents
Public Comments on Digital Financial Assets Law Rulemaking Posted
The DFPI sought and received public comment for the new Digital Financial Assets Law (DFAL) prior to engaging in formal rulemaking. Comments were invited by Jan. 12, 2024, related to the DFAL license application, licensure requirements, and stablecoin approval. The comments from 18 interested organizations are posted on the DFPI website.
The law was enacted on Oct. 13, 2023, when Governor Gavin Newsom signed into law AB 39 and SB 401. The DFAL provides the DFPI with rulemaking authority and an 18-month delayed operative date to ensure the adopted regulatory framework can be thoughtfully tailored to address industry trends and mitigate consumer harm. As a result, DFPI is engaging in the rulemaking process to further the implementation of the DFAL.
Debt Collector Fingerprint and Background Investigation
As of March 1, 2024, the Debt Collector Licensing Program has begun the Fingerprint and Background Investigation necessary prior to submitting an application. Failure to provide fingerprints may result in revocation of a conditional license. See the DFPI Debt Collector Licensing Act (DCLA) webpage for additional information.
BDIA Online Examination Commences April 2
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 that have their principal place of business in another state.
The annual online examination will commence on April 2, 2024. If selected, the advisory firm will be notified on April 2, 2024, and required to complete and submit the online examination by May 17, 2024. The Division will conduct the exam on a four-year cycle for these licensees. However, an Investment Adviser may be selected for a future examination sooner or later than the estimated four-year cycle.
The Division will communicate about the exam and other matters using the Investment Adviser email entered on the current Form ADV. The business e-mail address must be dedicated to receiving DFPI communications and monitored by an executive from the firm to ensure prompt responses to the Department.
If you have any questions or inquiries, please contact the Division at CADFPIexams@dfpi.ca.gov.
Chime Financial to Pay Fine, Improve Customer Service Standards
On Feb. 27, the DFPI announced a consent order with San Francisco-based Chime Financial, Inc. (Chime). The order, which includes a $2.5 million penalty, resolves DFPI’s investigation regarding the accuracy and responsiveness of Chime’s handling of customer service transactions.
Chime, incorporated in Delaware with headquarters in San Francisco, California, acts as an intermediary between banks and consumers to provide access to retail banking products such as savings and checking accounts. Chime is responsible for training its employees and third-party customer service vendors in handling consumer complaints. Chime cooperated with the investigation and as set out in the Consent Order, has already begun its remediation process which has reduced consumer complaints to the Commissioner.
Multimillion-Dollar Mortgage Assistance Scam
On Feb. 13 the DFPI announced that the U.S. District Court for the Central District of California found defendants Michael Nabati, Armando Solis Barron, Dominic Ahiga (a/k/a Michael Grinnell), and Roger S. Dyer doing business through Los Angeles-based Home Matters USA and related firms, liable for approximately $19 million in combined penalties and victim restitution.
The ruling resolves a joint civil action filed in September 2022 by the DFPI and the Federal Trade Commission (FTC). The Court found that the defendants falsely promised to reduce homeowners’ mortgage payments and prevent foreclosures, defrauding distressed homeowners out of millions of dollars. The scheme harmed more than 3,000 people nationwide, particularly elders and veterans. The defendants violated multiple federal and state laws, including the California Consumer Financial Protection Law (CCFPL).
The ruling represents DFPI’s first civil enforcement action filed jointly with the FTC. It also produced the highest penalties to date through the DFPI’s expanded authority under the CCFPL.
Some Escrow Reports Due Mar. 14
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 November 30, 2023, your annual report is due Mar. 14, 2024. 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 drop box 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 Escrow.Licensing@dfpi.ca.gov.
REMINDER: 2023 Annual Reports for CFL, CDDTL, SLSA, and DCLA Due March 15
Annual reports for 2023 for DFPI Finance Lenders (CFL), Payday Lenders (CDDTL), Student Loan Services (SLSA), and Debt Collectors (DCLA) are due by March 15, 2024.
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 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.
REMINDER: 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.
Consumer Financial Education Webinar April 3
The DFPI hosts a monthly consumer financial education webinar highlighting 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’s YouTube channel.
The next webinar, “Building Wealth through Banking,” is scheduled for April 3 at 12 p.m., PST (Registration). Discussion will include the many financial tools and services offered by banks to help you build, grow, and secure your assets and financial wealth.
LICENSEE ACTIVITY
Commercial Bank Activity
New Bank
Altos 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
Application amended: 9/25/23 – name changed from Entrust Bank
Acquisition of Control
Stearns Living Trust, Glenn B. Stearns, Trustee, to acquire control of Infinity Bank
Filed: 2/23/24
Credit Union Activity
Merger
SafeAmerica Credit Union, Pleasanton, to merge with and into NuVision Federal Credit Union, Huntington Beach
Filed: 2/21/24
Premium Finance Company Activity
New Premium Finance Company
Preferred Premium Finance Inc.
250 Rincon Street, Corona
Approved: 2/26/24
Premier Premium Financing Services, Inc.
23276 S. Pointe Dr., Laguna Hills
Approved: 2/12/24
Foreign (Other State) Bank Activity
New Branch
Safra National Bank of New York
Four Main Street, Los Altos
Filed: 2/22/24
Money Transmitter Activity
New Money Transmitter
Expensify Payments LLC
Opened: 2/21/24
Acquisition of Control
BHN Holdings, Inc., to acquire control of Tango Card, Inc.
Filed: 2/28/24
Joao Vitor Nazareth Menin Teixeira Souza, to acquire control of Inter & Co Payments, Inc.
Filed: 2/09/24
Change of Name
Netspend Corporation to change its name to Ouro Global, Inc.
Effected: 2/2/24
PNC Global Transfers Inc. to change its name to Spectrum Global Payment Solutions, Inc.
CLOTHILDE V. HEWLETT Commissioner, Department of Financial Protection and Innovation
The March 2024 Monthly Bulletin covers the month ended February, 2024.
It is issued pursuant to Financial Code section 376.
The Monthly Bulletin is available at no charge via e-mail.
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