Monthly Bulletin – August 2024
Volume 12, Number 1
2024 Report on Banks and Credit Unions Fee Income from NSF and Overdraft Charges
State-chartered banks and credit unions are required to report annually to the Department of Financial Protection and Innovation (DFPI) the revenue received from fees on nonsufficient funds and overdraft charges during the calendar year. The requirement is per Financial Code Section 521.
The 2024 Annual Report of Income from Nonsufficient Funds and Overdraft Fees is now posted to the DFPI website. Background on the process and a link to last year’s report are posted to the DFPI website here.
Contents
CalMoneySmart Financial Education Grants Awarded
On Aug. 5, the Department of Financial Protection and Innovation (DFPI) announced the award of $4 million in CalMoneySmart grants for the 2024-2026 grant cycle. This year’s slate of 15 nonprofit organizations expands the program’s geographic coverage to include the North State and Central Coast regions of the state.
The CalMoneySmart program, established in 2019 when Governor Gavin Newsom signed SB 455 (Bradford), supports community-based organizations in providing free financial education and empowerment programs to the most vulnerable unbanked and underbanked consumers.
In the first three years of the program, more than 46,000 participants were served by 36 grantee organizations. The Department received 189 applications, nearly double the number of applications from the prior fiscal year.
More information on CalMoneySmart can be found at dfpi.ca.gov/calmoneysmart.
DFPI Terminates Order Against Silvergate Bank
The California Department of Financial Protection and Innovation (DFPI) has terminated a May 23, 2023, order against Silvergate Bank and its holding company Silvergate Capital Corporation (collectively Silvergate). This announcement follows a similar conclusion by the Federal Reserve Board announced on July 26.
On March 8, 2023, Silvergate’s holding company announced its intent to voluntarily liquidate Silvergate Bank. The DFPI and Federal Reserve Board issued a joint cease and desist order on May 23, 2023, to address the implementation of Silvergate Bank’s voluntary liquidation plan.
Some Escrow Reports Due Aug. 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 April 30, 2024, your annual report is due Aug. 13, 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 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 Escrow.Licensing@dfpi.ca.gov.
Sept. 10 Escrow Advisory Committee Meeting
The next Escrow Law Advisory Committee meeting will be on Tuesday, Sept. 10, 2024, at 10 a.m. PST. The meeting will be held at the Department of Financial Protection and Innovation’s Los Angeles office located at 300 S. Spring St., 15th floor video conference room, Los Angeles, CA 90013.
Please contact Assistant Deputy Commissioner Paul Liang in the Los Angeles office at (213) 576-7535 if you have any questions. Agendas and minutes of previous meetings are available at the DFPI Escrow Law webpage.
Applications Invited for DFPI Credit Union Advisory Committee
The Department of Financial Protection and Innovation (DFPI) is soliciting applications to fill two vacant positions on the Credit Union Advisory Committee for the 2025-2027 term. Applications are due by Sept. 13, 2024.
The Committee advises the Commissioner of the Department of Financial Protection and Innovation and Deputy Commissioner for the Division of Credit Unions on matters relating to credit unions or the credit union business.
DFPI strives to have broad representation on the committee and considers the following priorities when making recommendations for appointment to this position:
- Geographic representation
- Small, Mid-Size, and Large credit unions
- Fields of membership
- Leadership in industry related state and national associations
- Diverse backgrounds and experience
If you are interested in serving on the Advisory Committee for the 2025-2027 term, you may submit an application expressing your interest and summarizing your qualifications for service. Please include:
- Background
- Areas of expertise
- Reasons for serving on the committee
- Credit union’s size, region, and field of membership
- Challenges you face in your own credit union
- Whether your credit union has private or federal insurance
- Experience with hot issues in the current public policy environment, including serving underbanked and vulnerable Californians, financing affordable housing, financial innovation, and community reinvestment.
Submit your email application to Purvi Patel, Deputy Commissioner, Office of Credit Unions at purvi.patel@dfpi.ca.gov by Sept. 13, 2024.
DFPI Revokes Finance Lending License of Synapse Credit LLC
On July 10, the Department of Financial Protection and Innovation Department of Financial Protection and Innovation (DFPI) announced an order revoking the California Financing Law license of Synapse Credit LLC (Synapse Credit), a subsidiary of the self-described “Banking as a Service” (BaaS) company Synapse Financial Technologies, Inc. Synapse Financial Technologies, Inc. filed for Chapter 11 bankruptcy protection in April 2024, setting in motion a chain of events that left thousands of consumers without access to their funds.
Synapse Credit is a finance lending company based in San Francisco that offers loans to individuals and businesses. After the bankruptcy filing of its parent company, the DFPI commenced a regulatory examination of Synapse Credit. As part of that regulatory examination, the DFPI sought books and records, reports, and other data used by the company, to assess whether it was operating in conformity with the California Financing Law. Despite multiple requests, no documents were provided.
Synapse Credit’s failure to provide the requested information prevented the DFPI from conducting its regulatory examination and ensuring that the company was complying with the California Financing Law. As a result of the revocation order, Synapse Credit is no longer permitted to engage in the business of finance lending in the State of California.
The DFPI continues to monitor the impact of the bankruptcy of Synapse Financial Technologies, Inc.
DFPI Alert on Fraudulent Investment Adviser
On July 19, the Department of Financial Protection and Innovation (DFPI) received information that the website bluelawnassetmanagement.com is fraudulently marketing itself as a licensed investment adviser.
The imposter websites, bluelawnassetmanagement.com and www.blassetmanagement.com, are not associated with a California licensed Investment Adviser. The imposter websites are posing as Blue Lawn Asset Management LLC, which is a California licensed Investment Adviser (CRD number 136527).
The DFPI urges consumers to exercise extreme caution before responding to any solicitation offering investment or financial services. To check whether an investment or financial service provider is licensed in California, or to submit a complaint, consumers should go to the DFPI website at dfpi.ca.gov/consumers or call (866) 275-2677.
CSBS Plans to Modernize NMLS
On July 20, the Conference of State Bank Supervisors (CSBS) released the first phase of enhancements for the Nationwide Multistate Licensing System & Registry (NMLS). The system updates will resolve pain points for professionals across the mortgage, consumer finance, debt, and money services businesses industries who use NMLS to manage their state licensing or federal registration.
The NMLS updates will allow more than 600,000 NMLS industry users to create a username and password without having to contact the NMLS Call Center for support. More than 50,000 users who have multiple NMLS accounts will be able to access their accounts using one username and password.
The full set of NMLS updates includes:
- A new login experience, including a newly designed screen.
- One username and password to access all NMLS accounts.
- The ability to reset a username or password without contacting the NMLS Call Center.
- A new user profile page that simplifies account management by enabling users to view all NMLS accounts on one page.
- A new built-in survey that allows NMLS users to provide feedback anytime – right in the system.
- A new method that makes it easier for companies to create an NMLS account on behalf of an individual employee.
The financial crisis of 2008 led to federal adoption of NMLS as part of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”) to help promote consumer protection by increasing visibility across the mortgage industry. State financial services regulatory agencies started using NMLS to manage licensing for the consumer finance, debt, and money services businesses in 2012.
The next phase of enhancements to further modernize NMLS will focus on making it easier for individuals in the mortgage industry to apply for state licenses in NMLS.
Upcoming Consumer Webinars
- “SAVE/Debt Relief Student Loan Update” is scheduled for Aug. 20 at 12 Noon.
This session will explain the recent court ordered temporary pause on the SAVE repayment plan as well as the latest in debt relief that was announced on July 31st. Speakers are national student loan expert Betsy Mayotte from the Institute of Student Loan Advisors and DFPI student loan ombudsperson Celina Damian. (Registration).
- “Estate Planning: Leaving a Legacy” is scheduled for Sept. 4 at 12 Noon.
This session will share tips on how to plan, protect, and leave a legacy for loved ones and favorite causes. Estate planning topics will include Wills, living trusts, and power of attorneys, Trusts, Probate, asset transfer, and tax implications, Life insurance, and Beneficiaries. (Registration).
Past presentations in the series may be viewed on the DFPI YouTube site.
AARP/DFPI “Scam Chat Wednesday” Webinars Continue
In August, the Department of Financial Protection and Innovation (DFPI) co-hosts a weekly “Scam Chat Wednesday” webinar with the California chapter of the American Association of Retired Persons (AARP). Join the DFPI and AARP California to learn how you can stay safe from financial fraud and scams. Visit the DFPI events page for more information on this and other webinars.
LICENSEE ACTIVITY
Commercial Bank Activity
New Bank
Altos Bank
Proposed location: Street address to be determined in Downtown Los Altos, Los Altos, Santa Clara County
Correspondent: James B. Jones
Carpenter & Company, 23 Corporate Plaza Drive, Suite 150, #D-11, Newport Beach, CA 92660
Phone: 949-261-8888
Approved: 7/29/24
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
Withdrawn: 7/12/24
Merger
Community Bank of the Bay, Oakland, to merge with and into Commercial Bank of California, Irvine
Filed: 7/05/24
Acquisition of Control
Steven C. Zola, to acquire control of Montecito Bank & Trust
Filed: 7/24/24
Voluntary Surrender
Silvergate Bank
4225 Executive Square, La Jolla
Effected: 7/08/24
Credit Union Activity
Merger
High Sierra Credit Union, Bishop, to merge with and into Desert Valleys Federal Credit Union, Ridgecrest
Filed: 7/09/24
North County Credit Union, San Diego, to merge with and into Cabrillo Credit Union, San Diego
Filed: 7/12/24
Conversion
Altura Credit Union, Riverside, to convert to federal charter
Filed: 7/03/24
Foreign (Other Nation) Bank Activity
New Office
Canadian Imperial Bank of Commerce
101 Second Street, San Francisco
Approved: 6/04/24
Opened: 7/08/24
Chang Hwa Commercial Bank, Ltd.
515 South Flower Street, Los Angeles (to convert from a limited branch to a wholesale branch)
Filed: 7/08/24
Approved: 7/22/24
Money Transmitter Activity
New Transmitter
Figure Payments of California, Inc.
Filed: 7/26/24
X Payments LLC (fka Twitter Payments LLC)
Approved: 7/11/24
Acquisition of Control
Bayani Pay Inc to acquire control of BDO Remit USA Inc.
Filed: 7/15/24
CLOTHILDE V. HEWLETT Commissioner, Department of Financial Protection and Innovation
The August 2024 Monthly Bulletin covers the month ended July 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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