Monthly Bulletin – May 2025

Chief Deputy Commissioner Appointment

On Apr. 25, Governor Newsom appointed Suzanne Martindale as DFPI’s Chief Deputy Commissioner, where she has served as Senior Deputy Commissioner of Consumer Financial Protection since 2021. On Apr. 29, Martindale was sworn in by Commissioner Mohseni.

Advisory to Small Businesses: Speak Up About Merchant Cash Advances

Are you a business owner who might’ve been misled or kept in the dark about the terms of a merchant cash advance (MCA) or other commercial financing product? If you’ve experienced deception, abuse, or unfair treatment through a MCA or similar product, we want to hear from you. Read our Consumer Alert.

CA Financing Law Licensee Notice of Registration Exemption When Offering or Providing Education Financing or Income-based Advances

Effective February 15, 2025, no person shall engage in the business of offering or providing education financing or income-based advances, as defined in California Code of Regulations, title 10, section 1003 and 1004, respectively, without registration under the California Consumer Financial Protection Law (CCFPL). Pursuant to California Code of Regulations, title 10, section 1430.1, a licensee offering or providing education financing and/or income-based advances “within the scope” of the California Financing Law (CFL) license is exempt from registration under the CCFPL.

The Department is requesting any person engaging in the business of a finance lender that offers or provides education financing and/or income-based advances under the authority of the CFL license to send notice via email to [email protected] using the following instructions:

• Email Subject Line: CCFPL Registration Exemption Notice – CFL
• In the body of the email, include one of the following statements, as applicable:
  • “[CFL Licensee’s Legal Name], [CFL Licensee’s Main License Number], is offering [education financing and/or income-based advances] to CA residents.”
  • “[CFL Licensee’s Legal Name], [CFL Licensee’s Main License Number], intends to offer [education financing and/or income-based advances] to CA residents.”
• Please include the name and phone number of contact person.

For CFL licensees that offer or provide one or both subject products mentioned under the CFL license, the Department kindly requests that you provide this notice no later than June 2, 2025.

Please note, that if you offer or provide education financing or income-based advances under the authority of your CFL license, you are required to file the CCFPL Education Financing Annual Report and/or the CCFPL Income-Based Advances Annual Report on or before March 15^th of each calendar year, starting in 2026, as part of a special report required by Financial Code section 22159(b).  Submitting the requested notice will assist the Department in providing you with future information and reminder notices regarding the filing of these separate reporting requirements.

CFL licensees that do not offer education financing or income-based advances under the CFL license, including those who operate only as a broker under the CFL license, do not need to respond to this request.  You will be considered as a CFL licensee who does not provide these subject products or who offers these subject products under the applicable CCFPL registration if we do not receive any response.

If you have any questions or concerns related to this request, please email [email protected]

Notice of Proposed Rulemaking – Money Transmission Act / Digital Financial Assets Law

The Commissioner of the Department of Financial Protection and Innovation (Department) proposes to amend the California Code of Regulations as set forth in the documents below, after considering all comments, objections, and recommendations regarding the proposed action.

• Notice of Proposed Action Notice of Proposed Action
• Text of Proposed Regulations Text of Proposed Regulations
• Initial Statement of Reasons Initial Statement of Reasons
• NMLS Company Form (MU1) PRO 02-23 – NMLS Company Form (MU1)
• NMLS Individual Form (MU2) PRO 02-23 – NMLS Individual Form (MU2)
• DFPI Form 2 (Personal Financial Statement) PRO 02-23 – DFPI Form 2 (Personal Financial Statement)

Time for Comments

The Commissioner invites interested parties to submit comments by May 19, 2025.

Submit comments by any of the following methods:

• By email to: [email protected]. Please include “PRO 02-23” in the subject line. Comments submitted as attachments in Microsoft Word format (.docx) are preferred.
• By postal mail to: Department of Financial Protection and Innovation / Attn: Diana Pha, Regulations Coordinator, Legal Division / 651 Bannon Street, Ste. 300 / Sacramento, CA 95811

Debt Collection News

Debt Collection Advisory Committee

The committee was set up to provide critical feedback to the Department as it stands up its debt collection licensing program. The diverse group includes a consumer advocate and representatives from the debt collection, debt-buying, third-party collection, and collection law industries. The committee will advise the Commissioner on matters related to the debt collection business, including proposed fee schedules and other requirements.   The Debt Collection Advisory Committee members have been appointed for the 2025-2027 term.  The newly appointed members are as follows:

• David Reid – General Counsel – Receivables Management Association International (RMAI)
• Humberto Matz – Executive Vice President – Creditors Adjustment Bureau, Inc.
• Kali Miller – Director, Product and Regulatory Legal – PTNSVC Mexico (Oportun, Inc.)
• Katie Neill – General Counsel and Chief Compliance Officer – TrueAccord Corp.
• Miguel Soto – Staff Attorney and Clinical Supervisor – East Bay Community Law Center
• Parisa Esmaili – Executive Director – Community Financial Resources (CFR)
• Robert Tavelli – Chief Executive Officer – Tavelli Co., Inc.

Broker-Dealer and Investment Adviser (BDIA) Division Updates

BDIA Online Examination Due May 16

 The Broker-Dealer / Investment Adviser (BDIA) Division is conducting annual online examinations 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 Division conducts these exams 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.

If selected, the advisory firm is required to complete and submit the online examination by May 16, 2025.

If you have any questions or inquiries, please contact the Division at [email protected].

BDIA Investment Adviser Representative Continuing Education (IAR CE) – FinPro account set up

 The continuing education (CE) requirement for investment adviser representatives (IARs) of both state-registered and SEC-registered investment advisers became effective in California in 2024. The IAR CE regulation requires that IARs complete twelve credits of continuing education annually, with six credits focused on Products and Practice and six credits focused on Ethics and Professional Responsibility. An overview of IAR CE requirements can be found on the North American Securities Administrators Association (NASAA) website and an Introduction to IAR CE course is available that explains the program.

It is recommended that IARs create a Financial Professional Gateway (FinPro) account in order to track their CE progress. The account provides representatives direct access to the tools and resources to manage their own securities registration information, gives them the ability to monitor their CE requirement progress, and allows FINRA the ability to reach them with notifications related to their industry records and requirements.

If you have any questions or inquiries, please contact the Division at [email protected].

Older Adult Scam Alert Campaign

For Fraud Prevention Month, we partnered with the California Department of Aging on an older adult scam alert statewide campaign. Topics included how older adults can protect themselves from imposter, investment, and natural disaster scams and fraud. The campaign introduced co-branded social media posts and a downloadable one-page fact sheet that was shared at community events throughout California. The fact sheet is also available in multiple language translations.

Vanguard Multi-State Settlement

We joined 49 states and the U.S. Virgin Islands, Puerto Rico, and Guam in a $106 million settlement with Vanguard Marketing Corp. and The Vanguard Group, Inc. for failing to supervise certain registered persons and disclose potential tax consequences to investors. The settlement stems from a three-year multi-state investigation coordinated through the North American Securities Administrators Association (NASAA)’s Enforcement Section Committee and a parallel investigation by the Securities and Exchange Commission (SEC). More.

DFPI Protections for Small Businesses Upheld by Ninth Circuit Court of Appeals

We announced a big win for small businesses! On April 15, the U.S. Court of Appeals for the Ninth Circuit ruled in favor of DFPI’s protections for small businesses. The ruling requires finance lenders and brokers to disclose key financing terms to small businesses to help them choose financing that provides the best value for their needs. More.

DFPI Seeks Answers from the CFPB over Prehired Restitution Delays

We sent a letter with leaders from eleven states pressing the Consumer Financial Protection Bureau (CFPB) to issue long-delayed restitution to victims of a predatory tech sales program. The letter details illegal, deceptive, and abusive practices that resulted in an award of $4.2 million in restitution to 660 consumers nationwide. More.

Crypto Investment Imposter Posing as DFPI

We posted a scam alert concerning a crypto investment scammer claiming to be from “CDFI,” using deceptive email addresses to closely mimic the DFPI. The imposter is offering fraudulent crypto mining and investments, demanding upfront fees.

GS Partners Investor Refund Video

We posted a video alert on our YouTube and social media channels informing GS Partners investors to file their refund claims by May 22, 2025.

2024 Report of Nonsufficient Funds and Overdraft Fee Income Now Available

DFPI has published the report of the revenue state-chartered banks and credit unions received from fees on nonsufficient funds and overdraft charges during calendar year 2024 on its website here. The report is required by Financial Code section 521.

For more information, please refer to the FAQs.

Industry News

CFPB Announcement Regarding Enforcement Actions Related to Buy Now, Pay Later Loans

The Consumer Financial Protection Bureau announced recently that it will not prioritize enforcement actions taken on the basis of the Truth in Lending (Regulation Z); Use of Digital User Accounts to Access Buy Now, Pay Later Loans, 89 Fed. Reg. 47,068 (May 31, 2024) (“Buy Now, Pay Later”). The Bureau will instead keep its enforcement and supervision resources focused on pressing threats to consumers, particularly servicemen and veterans. The Bureau takes this step in the interest of focusing resources on supporting hard-working American taxpayers, servicemen, veterans, and small businesses. The Bureau is further contemplating taking appropriate action to rescind Buy Now, Pay Later.

FTC Rule on Unfair or Deceptive Fees to Take Effect on May 12, 2025

Staff of the Federal Trade Commission published Frequently Asked Questions (FAQs) designed to provide consumers and businesses with information regarding the agency’s Rule on Unfair or Deceptive Fees, which takes effect on May 12, 2025. More.

FINRA Announces New “FINRA Forward” Initiatives to Support Members, Markets and Investors

FINRA announced recently the launch of FINRA Forward, a series of initiatives to improve its effectiveness and efficiency in pursuing its mission. The three FINRA Forward initiatives are modernizing FINRA rules, empowering member firm compliance, and combating cybersecurity and fraud risks. More.

Upcoming Consumer Education Event

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

Public Service Loan Forgiveness (PSLF) webinar

June 3, 12 – 1:30 p.m. | Virtual

Join nationally recognized student loan expert Betsy Mayotte from The Institute of Student Loan Advisors (TISLA) and Celina Damian, DFPI’s Student Loan Servicing Ombudsperson, to learn how government and nonprofit employees can maximize the benefits of PSLF with step-by-step instructions on how to qualify.

LICENSEE ACTIVITY

Bank Activity

New Bank Activity

Venture Coast Partners LLC
Proposed location: Street address to be determined in University Avenue, Palo Alto
Correspondent: Ravi Mallela
6024 Harwood, Oakland, CA 94618
Phone: 415-547-9632
Filed: 4/28/25

Merger

Cornerstone Community Bank, Red Bluff, to merge with and into Plumas Bank, Quincy
Approved: 4/10/25

EH National Bank, Los Angeles, to merge with and into Genesis Bank, Newport Beach
Approved: 4/29/25

Territorial Savings Bank, Honolulu, Hawaii, to merge with and into Bank of Hope, Los Angeles, California
Effected: 4/02/25

Change of Name

Santa Cruz Community Bank to change its name to West Coast Community Bank
Effected: 4/01/25

Credit Union Activity

Merger

Adelfi Credit Union, Brea, to merge with into Christian Community Credit Union, San Dimas
Filed: 4/09/25

Vocality Community Credit Union, Garberville, to merge with and into Community First Credit Union, Santa Rosa
Approved: 4/01/25
Effected: 4/01/25

Conversion

California Credit Union, Glendale, to convert to federal charter
Filed: 4/02/25

Foreign (Other Nation) Bank Activity

New Office

ID Bank CJSC
655 North Central Avenue, Glendale (Representative Office)
Approved: 4/15/25

Resona Bank, Limited
350 South Grand Avenue, Los Angeles (Representative Office)
Opened: 4/25/25

Erratum

BNP Paribas
It was erroneously stated in the April 2025 Monthly Bulletin that BNP Paribas Representative Office relocated to 180 Montgomery Street, San Francisco on March 28, 2025. The correct address is 475 Sansome Street, San Francisco,

Foreign (Other State) Bank Activity

New Office

Hana Bank USA, National Association
3170 W. Olympic Boulevard, Los Angeles (branch)
Filed: 4/09/25

Metro City Bank
5300 Beach Boulevard, Buena Park, Orange County (branch)
Filed: 4/11/25

Money Transmitter Activity

New Money Transmitter

Figure Payments of California, Inc.
Withdrawn: 3/17/25

Procore Payment Services, Inc.
Filed: 4/07/25

TabaPay Payment Services LLC
Filed: 4/14/25

Acquisition of Control

Digital Capital Holdings LLC & Agau Holdings Corp. to acquire control of GroupEx Financial Corporation
Cancelled: 2/23/25

Voyager Parent, LLC to acquire control of Everi MTL, LLC
Filed: 4/11/25