Monthly Bulletin – August 2020

DBO Continues to Monitor Face Guidance Covering Compliance

Licensees of the Department of Business Oversight (DBO) are commended for their continuing sacrifices and safety measures taken to protect consumers and employees from the pandemic.

In accordance with Governor Newsom’s directive on face coverings, the DBO continues to remind all licensees to ensure employees and customers fully comply with the latest guidance from the California Department of Public Health (CDPH).

All customers must be required to wear appropriate face coverings as outlined by CDPH guidance. Those refusing to wear masks and do not meet the CDPH exemptions should not be allowed to enter banks, credit unions, and other places of business.

The DBO mobilized drive-by spot checks of various branch and storefront locations to verify compliance with the Governor’s order throughout the state. These checks determined whether notices were posted on public facing doors, observed customers entering and exiting the premises, and noted whether a greeter or monitor was at the location restricting access or providing personal protective equipment (PPE).

As the Governor noted, the DBO and other state agencies will be monitoring compliance with the face-covering guidance, which will remain in effect until further notice. The DBO recognizes that enforcement of the face-mask guidance may be difficult at times and appreciates licensees’ help with this critical effort to protect all Californians during this historic crisis. Please send any questions to [email protected]

Jennifer Rumberger Appointed DBO Legal Division Deputy Commissioner

On July 15, Governor Newsom appointed Jennifer Rumberger, of San Francisco, as deputy commissioner of the legal division at the Department of Business Oversight, where she has served as attorney IV since 2015 and was attorney III from 2007 to 2015.

Ms. Rumberger was staff counsel at the California Department of Financial Institutions from 2004 to 2007. She was a litigation associate at Cooley LLP from 1998 to 2002. Ms. Rumberger earned a Juris Doctor degree from the University of California, Hastings College of the Law. This position does not require Senate confirmation

DBO posts 2019 Report on the California Residential Mortgage Loan Act

The DBO has published the 2019 Annual Report of activity under the California Residential Mortgage Lending Act (CRMLA). The report provides detailed information on residential mortgage lending loans, rates, consumer complaints, foreclosures and other data elements for calendar year 2019.

The report compiles data submitted to the DBO by residential mortgage lenders and mortgage loan servicers licensed under the CRMLA. The licensees submitted the data pursuant to Financial Code section 50307(a) requiring each residential mortgage lender or servicer licensee to file a report with the commissioner annually. The information contained in this report was provided by licensees for the calendar year ended December 31, 2019.

Some Escrow Annual Reports Due August

Each escrow agent licensee is required to submit to the Commissioner of Business Oversight an annual report prepared by an independent certified public accountant (CPA) 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.

For escrow agents whose fiscal year ended on April 30, 2020, your annual report is due August 13, 2020. Please have your CPA email your annual report to [email protected] 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 Sultanna Wan, Specialist, Escrow Law, Department of Business Oversight, 320 West Fourth Street, Suite 750, Los Angeles, CA 90013.

Penalties for failure to file the annual report by the due date, or failure to include any information required in the report, are $100 per day for the first five days the report is late and $500 per day thereafter (Financial Code section 17408). Failure to file the report or to include required information may also result in the suspension or revocation of an escrow agent’s license and/or prompt an immediate examination (Financial Code section 17602.5).

For questions on the annual report forms, call Sultanna Wan at (213) 576-7647.

DBO CalMoneySmart Program Receives 95 Applications

In May, the DBO launched CalMoneySmart, a new $4 million grant program to support financial education and empowerment programs for unbanked and underbanked consumers. CalMoneySmart will award $1 million a year in grants of up to $100,000 to nonprofit organizations that submit the best proposals to develop or provide free financial education, coaching, or a product to help consumers access lower-cost financial services, establish or improve their credit, increase savings, or reduce debt.

The application period for the CalMoneySmart financial education grant program closed on July 3. The DBO received 95 grant applications, with 45 percent from Northern California, 45 percent from Southern California, 8 percent from the Central Valley, and 1 percent from out of state. The DBO’s Education and Outreach office has formed a committee to review and score the grant proposals. The DBO expects to notify applicants of the results by August 21.

The grant program was created when Governor Gavin Newsom signed SB 455 by Sen. Steven Bradford, D-Gardena, in October 2019. The bill established a $4 million Financial Empowerment Fund, from which the CalMoneySmart program will award grants for four years.

Additional information can be found at https://dfpi.ca.gov//calmoneysmart/. For questions or comments, please contact [email protected].

FFIEC Issues Statement on Additional Loan Accommodations Related to COVID-19

On August 3, the Federal Financial Institutions Examination Council (FFIEC) issued a joint statement on behalf of its members setting forth prudent risk management and consumer protection principles for financial institutions to consider while working with borrowers as initial coronavirus-related loan accommodation periods come to an end and they consider additional accommodations.

As initial loan accommodation periods come to an end, some borrowers may be able to resume contractual payments, and others may be unable to meet their obligations due to continuing financial challenges. Financial institutions should consider appropriate, prudent options for additional accommodations that can ease cash flow pressures on affected borrowers, improve their capacity to service debt, and facilitate the financial institution’s prudent management of its loans, consistent with applicable laws and regulations.

The FFIEC is an interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB).

FinCEN Advisory on COVID-19 Related Impostor Scams

On July 7, the Financial Crimes Enforcement Network (FinCEN) issued an advisory to alert financial institutions to potential indicators of impostor scams and money mule schemes, which are two forms of consumer fraud observed during the COVID-19 pandemic.

Many illicit actors are engaged in fraudulent schemes that exploit vulnerabilities created by the pandemic. The advisory contains descriptions of impostor scams and money mule schemes, financial red flag indicators for both, and information on reporting suspicious activity.

This advisory is intended to aid financial institutions in detecting, preventing, and reporting potential COVID19-related criminal activity and is based on analysis of COVID-19-related information obtained from Bank Secrecy Act (BSA) data, open source reporting, and law enforcement partners. FinCEN will issue COVID-19-related information to financial institutions to help enhance their efforts to detect, prevent, and report suspected illicit activity on its website at https://www.fincen.gov/coronavirus, which also contains information on registering to receive FinCEN Updates.

LICENSEE ACTIVITY

Commercial Bank Activity

Acquisition of Control

Bing Yang, Alice Liu, Byron Yang, Lauren Yang, Out of the Shell, LLC, and the AB Yang Foundation, to acquire control of Mega Bank
Approved: 7/29/20

Patriot Financial Partners, GP II, L.P., Patriot Financial Partners II, L.P., Patriot Financial Partners Parallel II, L.P., Patriot Financial Partners GP II, LLC, Patriot Financial Manager LLC, Patriot Financial Manager, L.P., to acquire control of Avidbank Holdings, Inc.
Approved: 7/1/20

Patriot Financial Partners III, L.P., Patriot Financial Partners, GP III, L.P., Patriot Financial Partners, GP III, LLC, Patriot Financial Advisors L.P., Patriot Financial Advisors, LLC, and Messrs. W. Kirk Wycoff, James J. Lynch and James F. Deutsch, to acquire control of Pacific Mercantile Bancorp
Approved: 7/1/20

Sami Beydoun and Talal Beydoun, to acquire control of Partners Bank of California
Filed: 7/8/20

Premium Finance Company Activity

New Premium Finance Activity

Ultimate Premium Finance
411 W. Lambert Rd, Brea
Approved: 7/24/20

Velocity Premium Finance, Inc.
74710 CA 111, Palm Desert
Filed: 7/24/20

Voluntary Surrender

Alliance Premium Finance, Inc.
5315 Laurel Canyon Boulevard, Valley Village
Effected: 7/23/20

First Provident Bancorp, Inc.
660 Newport Center Drive, Newport Beach
Effected: 7/23/20

Professional Premium Acceptance Corp.
3250 Grey Hawk Ct., Carlsbad
Effected: 7/23/20

TAFS Premium Finance California, Inc.
6200 Canoga Avenue, Woodland Hills
Effected: 7/16/20

Credit Union Activity

Merger

C&H Sugar Employees Federal Credit Union, Crockett, to merge with and into 1st Northern California Credit Union, Martinez
Approved: 2/25/20
Effected: 7/1/20

Money Transmitter Activity

New Money Transmitter

Airwallex US, LLC
Filed: 7/23/20

CSG Forte Payments, Inc
Filed: 7/7/20

eMoola Inc.
Filed: 7/10/20

Acquisition of Control

2020 Maxitransfers Trust to acquire control of Maxitransfers Corporation
Filed: 7/31/20