Monthly Bulletin – February 2025

KC Mohseni Appointed DFPI Commissioner

KC Mohseni has been appointed Commissioner of the Department of Financial Protection and Innovation (DFPI) by Governor Gavin Newsom.

Mohseni has served since the start of the year as Acting Commissioner and was previously appointed by Governor Gavin Newsom in October 2023 as Chief Deputy Commissioner of the DFPI. Prior to his arrival at DFPI, Mohseni served as Chief Operating Officer in the State Controller’s Office from 2022 to 2023. He was Deputy Director of Administration at the California Department of Housing and Community Development from 2020 to 2022.

DFPI Response to Los Angeles Area Wildfires

The Department of Financial Protection and Innovation (DFPI) has taken several steps to monitor and respond to the Los Angeles area wildfires that have cost lives and caused large-scale property damage.

• On Jan. 17, Acting DFPI Commissioner KC Mohseni reached out to all state-chartered banks, credit unions, mortgage lenders and servicers, seeking a rapid response from the state’s financial institutions regarding the willingness of FIs to provide relief to Californians impacted by the wildfires in Los Angeles and Ventura Counties.
• On Jan. 18, Governor Newsom announcedthat the state has worked with major lenders to offer mortgage relief to LA firestorm victims. As of Jan. 30, the Department of Financial Protection and Innovation (DFPI) has confirmed additional commitments from more than 400 financial institutions. The lenders have committed to offering:
  1. 90-day mortgage payment forbearance periods, streamlined processes for requesting initial relief without submitting forms or documents, payment options that do not require immediate repayment of unpaid amounts (i.e., no balloon payments) at the end of the forbearance period, and the opportunity for additional relief.
  2. Relief from mortgage-related late fees accruing during the forbearance period for 90 days.
  3. Protection from new foreclosures or evictions for at least 60 days.
  4. Institutions will not report late payments of forborne amounts to credit agencies.

  The relief is available to qualified residents who are customers of these institutions in Los Angeles County.

• On Jan. 14, the California Department of Financial Protection and Innovation, the Federal Deposit Insurance Corporation, the Federal Reserve Board, the National Credit Union Administration, and the Office of the Comptroller of the Currency, collectively issued a media release to recognize the serious impact of the California wildfires on the customers and operations of many financial institutions and a commitment to provide appropriate regulatory assistance to affected institutions subject to their supervision. The agencies encouraged institutions operating in the affected areas to meet the financial services needs of their communities. A list of the disaster areas can be found at https://www.fema.gov/disaster/declarations.
• DFPI Fire Response Webpages – The DFPI has developed and maintained dedicated webpages to share information and resources for victims of the Los Angeles wildfires.
  • LA Fires Resources Webpage – Includes help for residents, fraud and scam protection, and student loan assistance.
  • Mortgage Relief Resources Webpage – Focuses on mortgage and residence help.
  • Summary of DFPI Response to LA Firestorm – A description of measures taken by the DFPI since the wildfires broke out on Jan. 7.
• On Jan. 21, the DFPI issued a consumer alert urging consumers and investors to be alert to mortgage-related scams and fraud seeking to exploit heightened economic anxieties resulting from wildfires. Common scams include the transfer of property deeds to a third party, intentional default, and charging excessive advance fees for mortgage assistance.
• On Jan. 8, in recognition of the impact of the fires in Southern California, Acting DFPI Commissioner KC Mohseni issued a proclamation allowing state-chartered banks to close impacted bank branches. Additionally, the Department issued guidance that encourages financial institutions to work with those affected by these disasters and consider flexibility in their efforts to repay mortgages and other loans.

Any support that can be extended to survivors of this disaster is appreciated. A number of disaster assistance programs have been implemented to help individuals, businesses, farmers, and the impacted communities recover. The Acting Commissioner supports and welcomes efforts to accommodate disaster victims in a safe and sound manner. Prudent efforts to modify or restructure loans for disaster victims will not be criticized by examiners.

REMINDER: CCFPL Registration Applications Required by Feb. 15

Pursuant to the provisions of the California Consumer Financial Protection Law (CCFPL), the DFPI will now require providers of the following financial products and services to register and submit data to the Department:

• Debt Settlement Services
• Student Debt Relief Services
• Education Financing
• Income-Based Advances (also known as “earned wage access”)

Financial service providers covered by the new regulations must file an application by Feb. 15, 2025 to continue operating legally in the state. Registration will provide valuable data and insights to help inform changes to consumer protection laws and regulations in the future.

Registration of covered products and services will be managed through NMLS as of Nov. 1, 2024. To learn more about how to register, visit our Information for New Registrants page on the DFPI website.

NEW: CCFPL 2024 Commercial Financing Annual Report Due March 15

Escrow News and Reminders:

2024 Escrow Annual Liability Report Due Feb. 15

A reminder that all escrow agents licensed prior to Jan. 1, 2025, must submit an Annual Liability Report to the DFPI. The Annual Liability Report form is now available on DFPI’s website. The deadline to submit the Annual Liability Report electronically is Feb. 15, 2025.

A DFPI portal account is required to submit the Annual Liability Report. To register for a portal account, go to DFPI’s website. 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 [email protected].

Some Escrow Annual Reports Due Feb. 13

Escrow agents are required to submit to the Commissioner an annual report prepared by an independent certified 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 Oct. 31, 2024, your annual report is due Feb. 13, 2025. Please have your CPA email your report to [email protected] 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 [email protected].

Escrow Advisory Committee Openings

There are two openings on the Escrow Advisory Committee as follows:

• a representative for small-sized escrow companies.
• a CPA who has escrow agent clients.

The Committee is established in Financial Code section 17214. The Committee’s purpose, as provided in statute, is to assist the Commissioner in the implementation of the Commissioner’s duties under the Escrow Law. The Committee is comprised of eleven members, including the Commissioner or the Commissioner’s designee. The Commissioner appoints the Committee members, other than those representing Escrow Institute of California and Escrow Agents’ Fidelity Corporation. The Committee meets quarterly at the Department’s office. If you qualify for one of the open positions, you are encouraged to apply by sending a letter of qualifications and resume to the attention of Paul Liang, Assistant Deputy Commissioner at 320 West 4th Street, Suite 750, Los Angeles, California 90013. The deadline for submission is March 31, 2025. Should you have any questions, please contact Paul Liang at (213) 576-7535 or [email protected].

Escrow Bulletin

The DFPI has issued the following Escrow Bulletin regarding Social Engineering Scams targeting Licensed Escrow Companies (https://dfpi.ca.gov/wp-content/uploads/2025/02/EscrowBulletin0225.pdf). Questions regarding this bulletin should be directed to [email protected].

REMINDER: 2024 Annual Reports for CFL, CDDTL, SLSA, and DCLA Due March 15

Annual reports for 2024 for DFPI Finance Lenders (CFL), Payday Lenders (CDDTL), Student Loan Services (SLSA), and Debt Collectors (DCLA) are due by March 15, 2025.

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 2024 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, 2025, even if the licensee had no business activity in the calendar year 2024. 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 [email protected] 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, 2025, even if the licensee had no business activity in calendar year 2024. 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 [email protected].

Student Loan Servicing Act (SLSA)

Each student loan servicer is required to file an annual report with the DFPI on or before March 15, 2025, per Financial Code section 28146(a) of the Student Loan Servicing Act (SLSA). All student loan servicers licensed prior to Jan. 1, 2024, 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 [email protected].

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, 2025, per Financial Code section 100021(a). For questions about the content of the Report or clarification on the instructions, please email [email protected] or call (866) 275-2677.

REMINDER: DFPI Debt Collection Advisory Committee

The DFPI is soliciting applications for members to the DFPI Debt Collection Advisory Committee through Feb. 21, 2025.

Financial Code section 100025 provides for a Debt Collection Advisory Committee:

• Appointed by the Commissioner to a two-year term.
• Seven members, including at least one representing consumers.
• No compensation or reimbursement of expenses.
• A minimum of two meetings per year.

Those interested in serving on the Debt Collection Advisory Committee should submit a statement summarizing their qualifications or complete the Debt Collection Advisory Committee Member form to [email protected] no later than Feb. 21, 2025.

New appointments will be announced in April of 2025 for the upcoming term. For full details please go to the DFPI Application Process webpage.

REMINDER: Report of Fee Income from NSF and Overdraft Charges Due March 3

Financial Code section 521 requires state-chartered banks and credit unions to report annually to the Department of Financial Protection and Innovation (DFPI) the revenue they received from fees on nonsufficient funds and overdraft charges during the calendar year. These reports are due by March 3, 2025, so the DFPI can publish the information on its website by March 31.

On Dec. 31, the DFPI sent an email with a report link to the designated email address of each reporting institution from the [email protected] email address.  If you did not receive the email with the report link, please contact [email protected].

Please refer to the FAQs or contact Marilyn Davis at [email protected] (banks) or Kim-Phuong Hoang at [email protected] (credit unions) for more information.

Patelco Cybersecurity Action

On Feb. 4, the DFPI announced a consent order with Patelco Credit Union (Patelco), one of California’s largest credit unions, for cybersecurity violations. The order follows an examination prompted by a June 2024 ransomware attack impacting all of Patelco’s approximately 500,000 members.

Block, Inc. Multi-State Settlement

On Jan. 16, the DFPI announced a coordinated action with 47 state financial regulatory agencies against Block, Inc., for violations of Bank Secrecy Act and anti-money laundering laws that safeguard the financial system from illicit use. The settlement plan includes a penalty of $80 million to the state agencies and a corrective plan.

Edward Jones Multi-State Settlement

On Jan. 15, the DFPI announced a multi-state settlement, in partnership with the North American Securities Administrators Association (NASAA), with investment adviser and broker-dealer, Edward D. Jones & Co., L.P. (Edward Jones). The firm will pay $17 million in administrative fines to the states for failing to properly supervise the making of certain recommendations to clients. Edward Jones will pay a fine to California of approximately $320,000.

Upcoming Consumer Education Event

Each month we educate consumers through community events and a monthly consumer financial education webinar.

Protect Yourself from Mail Scams

March 5, 12 – 1 p.m. | Virtual

The DFPI will host a webinar on common mail scams, including phishing, lottery, and charity scams. Special guest speaker will be from the U.S. Postal Inspection Service, law enforcement, crime prevention, and security arm of the Postal Service. Registration.

New Contact Information for the Department of Financial Protection and Innovation

The Department of Financial Protection and Innovation will be relocating our Sacramento offices as of March 10, 2025, to the new May Lee State Office Complex. Please save the following address to your records:

To ensure mail is properly delivered to the Department, please begin using the new address by March 10.

LICENSEE ACTIVITY

Bank Activity

Merger

Territorial Savings Bank, Honolulu, Hawaii, to merge with and into Bank of Hope, Los Angeles, California
Approved: 1/28/25

Premium Finance Company Activity

Voluntary Surrender

X Capital Lending, Inc.
660 Newport Center Drive, Newport Beach
Effected: 1/15/25

Foreign (Other Nation) Bank Activity

New Office

Societe Generale
2882 Sand Hill Road, Menlo Park (Representative Office)
Opened: 1/14/25

Relocation

BNP Paribas
From 180 Montgomery Street to 475 Sansome Street, San Francisco (wholesale branch)
Filed: 1/15/25
Approved: 1/21/25
Effected: 1/22/25

Voluntary Surrender

DNB Bank ASA
470 Ramona Street, Palo Alto (representative office)
Filed: 1/09/25

Money Transmitter Activity

New Money Transmitter

Bivo Inc.
Approved: 1/08/25

Booking Holdings Financial Services USA LLC
Opened: 1/09/25

Klarna Inc.
Filed: 1/07/25