Monthly Bulletin – January 2025

KC Mohseni Designated Acting DFPI Commissioner

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

Mohseni was appointed by Governor Gavin Newsom in October 2023 as Chief Deputy Commissioner of the DFPI. Prior to his appointment, 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 Guidance for Financial Institutions in Southern California Fire Disaster Areas

On Jan. 7, Governor Gavin Newsom issued an emergency proclamation regarding fire and windstorm conditions in Los Angeles and Ventura counties that threaten structures, homes, and critical infrastructure, including power lines and water tanks, and have prompted evacuation orders and warnings in the impacted areas.

In recognition of the impact of the fires in Southern California, Acting DFPI Commissioner KC Mohseni on Jan.8 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.

On Jan. 18, Governor Newsom announced the state has worked with five major lenders to provide mortgage relief to their customers who are LA firestorm victims. The lenders have committed to offering up to a 90-day grace period on mortgage payments, 90-day waiver of late fees, and 60- to 90-day moratorium on new foreclosures for property owners whose structures were damaged or destroyed by the LA firestorms.

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 will not criticize 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.

For wildfire tips and the latest information, go to dfpi.ca.gov/lafires/.

New Deputy Commissioners Named for DFAL and CFL

In December, Brynly Llyr was appointed to be the first Deputy Commissioner of the Digital Financial Assets Law (DFAL) Division, which she has been managing in an acting capacity along with her role as Assistant Chief Counsel for the Securities Regulation Division over the past 12 months (since December 2023). DFAL established California as one of the first states to provide a comprehensive regulatory regime over many parts of the digital assets market.

Prior to joining DFPI in 2023, Llyr served as the head of Blockchain and Digital Assets at the World Economic Forum with research and publication focus on responsible innovation. She joined the Forum from a blockchain start up focused on launching a mobile-first platform focused on financial inclusion. Llyr was part of the founding team. Prior to that, Llyr served as General Counsel at cryptocurrency technology company Ripple following five years as senior counsel at eBay and PayPal. Llyr was also litigation counsel at O’Melveny & Myers and has a background in financial services. She has been a frequent speaker on topics including blockchain, cryptocurrency and financial inclusion, and was adjunct Professor at Berkeley Law.

On Jan. 13, Nicholas Lee began serving as the new Deputy Commissioner for the California Financing Law (CFL) Program. Lee has served with the DFPI (and its predecessor agencies) for more than 10 years, most recently as a Banking Program Examinations Manager and as a resource in the Information Technology risk management space. He actively works with the Conference of State Bank Supervisors on IT risk management policy initiatives and has been actively managing the examinations and ongoing supervision for one of the largest service providers for banking, Visa.

Lee is a graduate of the University of California, Davis, where he majored in Economics and Communications. He also holds both the Certified Information Systems Auditor and Certified Data Privacy Solutions Engineer certificates.

CCFPL Registration Applications Required by Feb. 15

NEW: CCFPL 2024 Commercial Financing Annual Report Due March 15

Pursuant to regulations effective Oct. 1, 2023, any person engaged in the business of offering or providing commercial financing or another financial product or service to a small business, nonprofit, or family farm, as defined by California Code of Regulations, title 10, sections 1060(f), (h), and (i), whose activities are principally directed or managed from California is required to file an annual report by March 15, 2025 with the Commissioner pursuant to the authority under the California Consumer Financial Protection Law (CCFPL). 

An entity is exempt from filing this report if it made no more than one commercial financing transaction to covered entities in a 12-month period or made five or fewer commercial financing transactions to covered entities in a 12-month period that are incidental to the business of the entity relying on this exemption.  A California Financing Law (CFL) licensee must not include commercial financing activity conducted under the authority of that license in this annual report. 

CCFPL commercial financing annual reports must be submitted electronically through the DFPI Self-Service portal. To learn more about how to register, please visit the CCFPL Commercial Financing Annual Report Information page on the DFPI website. 

To receive ongoing updates, subscribe on the DFPI website.  Once logged in, scroll and choose “Commercial Financing Annual Report” under the category “NCP.”  If you have any questions, please contact [email protected]. 

Reminder: 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].

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

DFPI Exam Rate Increase in 2025

As of Jan. 1, 2025, the DFPI has adjusted the hourly exam rates, consistent with existing statutory authority, to $120 per hour for the programs below to ensure the Department’s exam work is appropriately invoiced to cover costs.

If you have questions regarding the exam rate, please reach out to the appropriate program:

• Mortgage Bankers: [email protected]
• Finance Lenders: [email protected]
• Payday lenders: [email protected]
• Escrow companies: [email protected]
• Student Loan Servicers: [email protected]
• Debt Collectors: [email protected]
• New Covered Persons: [email protected]

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: Banks and Credit Unions to Report Fee Income from NSF and Overdraft Charges

Banks and Credit Unions to Report Fee Income from NSF and Overdraft Charges

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.

Refunds Ordered from Crypto Lending Platform SALT Lending

On Dec. 23, the DFPI announced a consent order with SALT Lending LLC (SALT) to resolve the DFPI’s investigation into SALT’s crypto-backed lending program.

As part of the negotiated resolution, the DFPI secured approximately $162,800 in borrower refunds and $137,500 in penalties, as well as stringent underwriting requirements, risk disclosures, and other consumer protections. From November 2019 through November 2022, SALT contracted for 342 loans with 151 California residents.

Action Against Mortgage Servicer for Data Breach

On Jan. 8, the DFPI and 52 state financial regulatory agencies announced a coordinated action against mortgage company Bayview Asset Management LLC, and three of its affiliates, Lakeview Loan Servicing, Community Loan Servicing, and Pingora Holdings (collectively the Bayview Companies), for deficient cybersecurity practices and for not fully cooperating with state regulators following a data breach that impacted 5.8 million customers. 

The $20 million fine and corrective plan contained in the final settlement highlights the importance of meeting state requirements to protect consumer data and complying with state supervisory demands.

Upcoming Consumer Education Event

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

Protect Yourself from Romance Scams 

Feb. 5, 2025, 12 p.m. | Virtual 

The DFPI will host a webinar on romance scams to advise on tactics used by scammers, red flags to watch for, and practical tips to stay safe in the digital age. Guest Speaker: Sallie Kim, Supervisory Counsel at U.S. Securities and Exchange Commission (SEC). Registration.

LICENSEE ACTIVITY

Commercial Bank Activity

Conversion

Pacific Premier Bank, Irvine, to convert to federal charter
Effected: 12/14/24

Credit Union Activity

Conversion

Altura Credit Union, Riverside, to convert to federal charter
Effected: 12/26/24

Trust Company Activity

New Trust Company

Santa Barbara Trust Company
100 E. de la Guerra Street, Santa Barbara
Filed: 12/16/24

Foreign (Other Nation) Bank Activity

New office

Allied Irish Banks, p.l.c.
415 Mission Street, San Francisco (Representative Office)
Filed: 12/02/24

Societe Generale
2882 Sand Hill Road, Menlo Park (Representative Office)
Filed: 12/02/24
Approved: 12/12/24

Discontinuance

BNP Paribas
To discontinue the Wholesale Branch at 180 Montgomery Street, San Francisco, and to establish a Representative Office at the same location
Approved: 12/23/24

United Overseas Bank Limited
777 South Figueroa Street, Los Angeles (Depository Agency)
Discontinued: 12/31/24

Money Transmitter Activity

New Money Transmitter

Paysend US LLC
Filed: 12/24/24

Voluntary Surrender

Tango Card, Inc.
Effected: 12/11/24