Monthly Bulletin – March 2024

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.

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 [email protected].

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 Civil-Action-Green-Equitable-Solutions-Order-Granting-Plaintiffs-Motion_Redacted 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 [email protected] 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 [email protected].

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 [email protected]. Information regarding the report may be obtained by calling (866) 275-2677.

National Community Development Lending Data for 2022

On Dec. 20, federal bank regulatory agencies, as members of the Federal Financial Institutions Examination Council (FFIEC), released data on small business, small farm, and community development lending during 2022. The Community Reinvestment Act regulations require the Board of Governors of the Federal Reserve System (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) to annually disclose these data.

The FFIEC also prepared aggregate disclosure statements of small business and small farm lending for all the metropolitan statistical areas and non-metropolitan counties in the United States and its territories. The statements are available here. Also available is a fact sheet on the 2022 data.

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.