Monthly Bulletin – June 2022

DFPI Seeks Public Comment on Oversight of Crypto Asset-Related Financial Products and Services

Governor Gavin Newsom issued Executive Order N-9-22 (Executive Order) on May 4, 2022, to foster responsible innovation, bolster California’s innovation economy, and protect consumers. In his announcement, Governor Newsom outlined his aim to create a transparent regulatory and business environment for web3 companies which harmonizes federal and California approaches, balances the benefits and risks to consumers, and incorporates California values such as equity, inclusivity, and environmental protection.

In accordance with the Executive Order, the Department of Financial Protection and Innovation (DFPI) seeks input from stakeholders and the public in developing guidance and, as appropriate, regulatory clarity and supervision of covered persons and service providers involved in the offering and provision of crypto asset-related financial products and services in California. The DFPI will proceed with rulemaking under the authority of the California Consumer Financial Protection Law (CCFPL).

The DFPI has formulated topics and questions to assist interested parties in providing input. However, stakeholders are not limited to providing comments in the areas identified by the DFPI and may comment on any potential area for rulemaking relating to crypto asset-related financial products and services. The formal Invitation for Comments is posted at the DFPI website.

The DFPI seeks comments on regulatory priorities, CCFPL regulation and supervision, and market-monitoring functions. For any recommendation relating to rulemaking, the DFPI invites stakeholders and the public to provide a description of the economic impact (if known) of the recommendation for California businesses and consumers.

DFPI Commissioner Clothilde Hewlett invites interested parties to submit comments by the deadline of August 5, 2022. Comments may be submitted electronically to [email protected] (please include “Invitation for Comments – Crypto Asset-Related Financial Products and Services ” in the subject line).

Comments may also be mailed to:
Department of Financial Protection and Innovation, Legal Division
Attn: Sandra Navarro, Regulations Coordinator
2101 Arena Boulevard
Sacramento, CA 95834

Debt Collection Licensing: Backlog Advisory

The DFPI is notifying license applicants and prospective license applicants that the issuance of licenses under the Debt Collection Licensing Act is unavoidably delayed at this time, because the Federal Bureau of Investigation has informed the Department that new changes are needed to state agency protocols for requesting federal background checks. The delay was unforeseen and is necessary to enable the Department to conduct the licensing background check required under the Debt Collection Licensing Act. During this delay, applicants may continue to engage in business, and the Department will not take action for unlicensed activity against applicants who filed their applications after December 31, 2021.

We will notify applicants when we begin issuing licenses and we encourage applicants to visit the Department’s website for updates to the Question & Answers at www.dfpi.ca.gov. If you have any questions, please contact us at [email protected].

Some Escrow Reports Due June 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 Feb. 28, 2022, your annual report is due June 13, 2022. 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 Sultanna Wan, 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 a prompt an immediate examination (Financial Code section 17602.5).

For questions about the annual reports, call Sultanna Wan at (213) 576-7647.

Proposed Rules On Consumer Complaints Under the CCFPL

On May 20, the DFPI issued a notice of proposed rulemaking to adopt regulations to implement and interpret certain sections of the California Consumer Financial Protection Law (CCFPL) related to consumer complaints and inquiries. The full text of the proposed regulations is posted to the DFPI website.

The proposed rules would authorize DFPI to establish reasonable procedures for covered persons to provide timely responses to consumers and DFPI concerning consumer complaints and inquiries by mandating, among other things, that covered persons respond to consumer complaints and to establish policies and procedures for receiving and responding to complaints, including providing a complaint form, acknowledging receipt of complaints, tracking complaints, the timeline for responding to complaints, the contents for such a response, and recordkeeping of such complaints. The rules would also require covered persons to submit to DFPI a quarterly complaint report and an annual inquiries report.

Written comments are due by July 5.

DFPI Public Service Loan Forgiveness Waiver Webinar

The DFPI hosted a webinar on May 31st on the Public Service Loan Forgiveness (PSLF) program, eligibility, and how to apply for this federal program. This webinar was in partnership with the Student Borrower Protection Center (SBPC) and featured a live Q&A session to help applicants get started.

This was the third webinar in a series of online events developed for the DFPI’s statewide student borrower outreach campaign. You may view this or any of our student borrower events on the DFPI’s YouTube channel.

The PSLF waiver form submission deadline is October 31, 2022. Learn more by visiting the Public Service Loan Forgiveness Program Website. If you have questions, contact the DFPI at [email protected] or call us at (866) 275-2677.

June is National Homeownership Month

National Homeownership Month is celebrated each year in June to remind consumers about the benefits of owning a home as well as an opportunity to provide information and resources that support homeownership. Keeping Californians in their homes is a priority for the state and state agencies are working hard across California to advance affordable homeownership opportunities, particularly in communities of color and other underserved communities. In April, the California Housing and Finance Agency (CalHFA) and California Department of Housing and Community Development (HCD) announced two new programs to help California first-time homebuyers:

• Forgivable Equity Builder Loan Program (CalHFA) – Allows first-time homebuyers to borrow a down payment at a 0% interest rate. The program provides forgivable loans to homebuyers for up to 10% of the home’s purchase price. Loans are available through CalHFA’s network of approved lenders, which operates in every California county. For more information about the applications process or how to qualify, contact a Preferred Loan Officer.
• CalHome Awards Program (HCD) – Provides grants to local public agencies and nonprofit corporations for first-time homebuyer down payment assistance, housing rehabilitation assistance, homebuyer counseling, and technical assistance to enable low- and very low-income households become or remain homeowners.

Additional mortgage assistance and homeowner resources may be found here:

• National Mortgage Settlement Housing Counseling Program (HUD) – Provides counseling services to California families who are in danger of eviction or foreclosure through housing counselors certified by the U.S. Department of Housing and Urban Development (HUD).
• California Mortgage Relief Program (CalHFA) – Helps Californians who have been financially impacted by the COVID-19 pandemic by assisting homeowners get caught up on their housing payments. The program is free, and the relief funds do not need to be repaid.
• DFPI’s Path to Homeownership Resource Booklet and Foreclosure Protection & Relief Webpage.

State Regulators Support Modernizing Regulatory Framework for Bank Mergers

A modernized regulatory framework for bank merger transactions should reflect changes in financial services, the diversity of consumer and small business needs and the interests of community banks, the Conference of State Bank Supervisors (CSBS) said in a comment letter to the Federal Deposit Insurance Corporation (FDIC).

In a letter sent May 31, CSBS offered several recommendations, including:

• Incorporate the role of states in the federal regulatory framework of bank merger transactions;
• Promote alignment and consistency across the federal banking agencies and the DOJ; and
• Provide greater clarity around the objective, scope, and criteria of modernizing the regulatory framework for the benefit of regulators, the banking industry and the public.

The FDIC has solicited comments as it undertakes a comprehensive review of all aspects of the existing regulatory framework applicable to bank merger transactions.

LICENSEE ACTIVITY

Commercial Bank Activity

Change of Name

Bank of Hemet, The, to change its name to HSJ Bank
Notified: 5/10/22

Pacific City Bank, to change its name to PCB Bank
Notified: 5/06/22

Premium Finance Company Activity

New Premium Finance Company

Atlas Premium Finance Inc.
660 Newport Center Drive, Newport Beach
Filed: 5/24/22

Integrated Premium Funding Corp of CA Inc.
1811 Aston Avenue, Carlsbad
Opened: 5/09/22

Rescue Premium Finance Corp.
660 Newport Center Drive, Newport Beach
Approved: 5/03/22

Voluntary Surrender of License

Chelsea Financial Group, Inc.
6200 Canoga Avenue, Woodland Hills
Effected: 5/06/22

Integrated Premium Funding Corp.
1811 Aston Avenue, Carlsbad
Effected: 5/06/22

Trust Company Activity

Acquisition of Control

Lido Advisors, LLC, to acquire control of Enterprise Trust & Investment Company
Filed: 5/27/22

Credit Union Activity

Change of Name

Evangelical Christian Credit Union, to change its name to AdelFi Credit Union
Effected: 5/05/22

Money Transmitter Activity

New Transmitter

RAM Payment, LLC
Approved: 4/07/22

Acquisition of Control

BTO Mythos Holdings (CYM) – NQ L.P., to acquire control of Currencies Direct Inc.
Filed: 5/16/22

Intermex Wire Transfer, LLC, to acquire control of Envios de Valores La Nacional Corp.
Filed: 5/09/22

Change of Name

Square, Inc., to change its name to Block, Inc.
Effected: 5/11/22

Voluntary Suspension of Operations

The Department of Financial Protection and Innovation (DFPI) has been notified that Moneydart Global Services Inc. has voluntarily suspended all money transmission operations in California effective December 15, 2020, through September 30, 2022. Consumers may contact Shanti Om Bade at 732-582-6416 ext. 132 or by e-mail at [email protected].