Financial Code — Part 1 | FIN — United States — California law | Esheria

Financial Code

Part 1 of 17 · provisions 1–200

This section says the act may be cited as the Financial Code.

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The commissioner must let certain debt collectors keep operating if they applied before January 1, 2023, and may issue a conditional license while an application is pending. Local governments in this state may not require a debt collector to be licensed or to register as a debt collector. This division is named the Debt Collection Licensing Act and may be cited by that name. A person may not do debt collection business in this state without first getting a license, and the license is tied to the principal place of business and cannot be transferred or assigned. This section defines key terms used in the Debt Collection Licensing Act.

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Provisions of Financial Code

Showing 200 of 3,273

  1. 1.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. )

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    This section says the act may be cited as the Financial Code.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. ) ## 1. This act is known and may be cited as the Financial Code. (Enacted by Stats. 1951, Ch. 364.)
  2. 10.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. )

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    The section says how verb tenses are read: present tense also covers past and future, and future tense also covers present.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. ) ## 10. The present tense includes the past and future tenses; and the future, the present. (Enacted by Stats. 1951, Ch. 364.)
  3. 1000.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A corporation may be formed by one or more persons if the commissioner authorizes it, and certain securities of California-incorporated banks or trust companies are exempt from Corporate Securities Law qualification requirements when offered or sold under the stated commissioner authorization or exemption conditions.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1000. When authorized by the commissioner as provided in Chapter 3 (commencing with Section 1040) a corporation may be formed by one or more persons in accordance with the laws of this state for the purpose of conducting a commercial banking business or a trust business, or both of them. The qualification requirements of the Corporate Securities Law of 1968 shall not apply to the offer and sale of securities issued by and representing an interest in or a direct obligation of a bank or trust company incorporated under the laws of this state if the securities are offered and sold pursuant to the commissioner’s authorization described in Section 1201 or the securities are exempt from authorization pursuant to Section 1202, or by a regulation or order of the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  4. 10000.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. )

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    This section defines several terms used in the chapter and says undefined terms take the meaning from Chapter 1 or regulations made by the commissioner.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. ) ## 10000. Terms not expressly defined in this chapter have the meaning given in Chapter 1 (commencing with Section 5000) or as the commissioner may provide by regulation. For the purposes of this chapter: (a) “California savings association” means either (1) an association or (2) a foreign association or successor thereof that was licensed to do the business of an association in California on September 15, 1935. (b) “Foreign holding company” means a savings and loan holding company as defined in Section 10 of the Home Owners Loan Act, as amended (12 U.S.C. Sec. 1467a) or bank holding company as defined in Section 3 of the federal Bank Holding Company Act, as amended, (12 U.S.C. Sec. 1841 et seq.), which savings and loan or bank holding company (1) has its principal place of deposits outside of California and (2) does not control a subsidiary California savings association or a subsidiary federal association with, or a subsidiary foreign savings association with, an authorized home or branch office in California at which accounts may lawfully be opened and deposits may lawfully be accepted. (c) “Foreign savings association” means an insured institution other than a California savings association and other than a federal association. (d) “Insured institution” means an entity: (1) that is organized and licensed as a savings association, savings and loan association, or savings bank under the laws of another state of the United States and the deposits of which are insured by the Federal Deposit Insurance Corporation or (2) that is chartered by the Office of Thrift Supervision. However, “insured institution” does not include any savings bank of the type defined in Section 3(g) of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1813(g)). (e) The “principal place of deposits” of an entity is that state in which the total deposits of all of that entity’s depository operations and those of its affiliates are largest. (Amended by Stats. 2004, Ch. 176, Sec. 5. Effective January 1, 2005.)
  5. 100000.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 1. General Provisions [100000 - 100002] ( Chapter 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Short Title [100000 - 100000.7] ( Article 1 added by Stats. 2020, Ch. 163, Sec. 3. )

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    This division is named the Debt Collection Licensing Act and may be cited by that name.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 1. General Provisions [100000 - 100002] ( Chapter 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Short Title [100000 - 100000.7] ( Article 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100000. This division shall be known, and may be cited, as the Debt Collection Licensing Act. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  6. 100000.5.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 1. General Provisions [100000 - 100002] ( Chapter 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Short Title [100000 - 100000.7] ( Article 1 added by Stats. 2020, Ch. 163, Sec. 3. )

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    The commissioner must let certain debt collectors keep operating if they applied before January 1, 2023, and may issue a conditional license while an application is pending.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 1. General Provisions [100000 - 100002] ( Chapter 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Short Title [100000 - 100000.7] ( Article 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100000.5. (a) The commissioner shall allow any debt collector that submits an application before January 1, 2023, to operate pending the approval or denial of the application. (b) (1) Notwithstanding Section 100011, the commissioner may issue a conditional license to an applicant pending compliance with the requirements of subdivisions (a) to (c), inclusive, of Section 100008. (2) A conditional license issued pursuant to this subdivision shall expire at the earliest of the following: (A) Ninety days after the requirements of Sections 100007, 100008, and 100009 have been satisfied. (B) Upon the issuance of an unconditional license. (C) Ninety days after the commissioner directs the licensee in writing to submit fingerprints for submission to the Department of Justice pursuant to Section 100008, if the licensee fails to submit a set of fingerprints for each individual described in Section 100009. (D) Upon the denial, pursuant to Section 100012, of a license application. (c) The commissioner may deny an application under Section 100012 at any time before the issuance of an unconditional license. (Amended by Stats. 2022, Ch. 569, Sec. 10. (AB 156) Effective September 27, 2022.)
  7. 100000.7.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 1. General Provisions [100000 - 100002] ( Chapter 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Short Title [100000 - 100000.7] ( Article 1 added by Stats. 2020, Ch. 163, Sec. 3. )

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    Local governments in this state may not require a debt collector to be licensed or to register as a debt collector.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 1. General Provisions [100000 - 100002] ( Chapter 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Short Title [100000 - 100000.7] ( Article 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100000.7. No county, city, or other political subdivision within this state shall require a debt collector to be licensed or to register as a debt collector. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  8. 100001.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 1. General Provisions [100000 - 100002] ( Chapter 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Requirements for Licensure [100001- 100001.] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. )

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    A person may not do debt collection business in this state without first getting a license, and the license is tied to the principal place of business and cannot be transferred or assigned.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 1. General Provisions [100000 - 100002] ( Chapter 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Requirements for Licensure [100001- 100001.] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100001. (a) No person shall engage in the business of debt collection in this state without first obtaining a license pursuant to this division. To the extent permitted by federal law, a person is acting in this state if the person is located in this state and is seeking to collect from a debtor that resides inside or outside the state, or is located outside of the state and is seeking to collect from a debtor that resides in this state. A license shall be obtained for the licensee’s principal place of business and shall not be transferred or assigned. A separate license is not required for each individual branch office. (b) (1) Except as provided in paragraph (2), this division shall not apply to a depository institution, as defined in Section 1420, a person licensed pursuant to Division 9 (commencing with Section 22000) or Division 20 (commencing with Section 50000), a person licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code, a person who is subject to the Karnette Rental-Purchase Act (Title 2.96 (commencing with Section 1812.620) of Part 4 of Division 3 of the Civil Code), or a trustee performing acts in connection with a nonjudicial foreclosure pursuant to Article 1 (commencing with Section 2920) of Chapter 2 of Title 14 of Part 4 of Division 3 of the Civil Code. (2) The commissioner may use the authority described in Section 100005 in connection with a violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code by a person described in paragraph (1). (c) This division shall not apply to debt collection regulated pursuant to Division 12.5 (commencing with Section 28100) or to the collection of covered commercial debt or covered commercial credit, as those terms are defined in Title 1.6C (commencing with Section 1788) of Part 4 of Division 3 of the Civil Code. (Amended by Stats. 2024, Ch. 522, Sec. 16. (SB 1286) Effective January 1, 2025.)
  9. 100002.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 1. General Provisions [100000 - 100002] ( Chapter 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 3. Definitions [100002- 100002.] ( Article 3 added by Stats. 2020, Ch. 163, Sec. 3. )

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    This section defines key terms used in the Debt Collection Licensing Act.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 1. General Provisions [100000 - 100002] ( Chapter 1 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 3. Definitions [100002- 100002.] ( Article 3 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100002. For purposes of this division, the following terms have the following meanings: (a) “Applicant” means a person, including a natural person, partnership, corporation, limited liability company, trust, estate, cooperative, association, or other entity, who applied for a license pursuant to this division. (b) “California debtor accounts” means accounts that are owned by consumers who reside in California at the time that the consumer makes a payment on the account. (c) “Collection agency” means a business entity through which a debt collector or an association of debt collectors engage in debt collection. (d) “Commissioner” means the Commissioner of Financial Protection and Innovation. (e) “Consumer credit transaction” means a transaction between a natural person and another person in which property, services, or money is acquired on credit by that natural person from the other person primarily for personal, family, or household purposes. (f) “Consumer debt” or “consumer credit” means money, property, or their equivalent, due or owing, or alleged to be due or owing, from a natural person by reason of a consumer credit transaction. The term “consumer debt” includes a mortgage debt. The term “consumer debt” includes “charged-off consumer debt” as defined in Section 1788.50 of the Civil Code. (g) “Creditor” means a person who extends consumer credit to a debtor. (h) “Debt” means money, property, or their equivalent that is due or owning or alleged to be due or owing from a natural person to another person. (i) “Debt collection” means any act or practice in connection with the collection of consumer debt. (j) “Debt collector” means any person who, in the ordinary course of business, regularly, on the person’s own behalf or on behalf of others, engages in debt collection. The term includes any person who composes and sells, or offers to compose and sell, forms, letters and other collection media used or intended to be used for debt collection. The term “debt collector” includes “debt buyer” as defined in Section 1788.50 of the Civil Code. (k) “Debtor” means a natural person from whom a debt collector seeks to collect a consumer debt that is due or owing or alleged to be due or owing from the person. (l) “Department” means the Department of Financial Protection and Innovation. (m) “Fund” means the Debt Collection Licensing Fund established pursuant to Section 100006.5. (n) “Licensee” means a person licensed, conditionally or unconditionally, pursuant to this chapter. (o) “Nationwide Multistate Licensing System & Registry” means a system of record, created by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, for nondepository, financial services licensing or registration in participating state agencies, the District of Columbia, Puerto Rico, the United States Virgin Islands, and Guam. (p) “Person” means a natural person, partnership, corporation, limited liability company, trust, estate, cooperative, association, or other similar entity. (Amended by Stats. 2023, Ch. 198, Sec. 7. (SB 152) Effective September 13, 2023.)
  10. 100003.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. )

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    The commissioner administers this division and may make rules, issue orders, grant or deny licenses, and take enforcement and recordkeeping actions.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. ) ## 100003. (a) The commissioner shall administer this division and may adopt rules and regulations, and issue orders, consistent with that authority. (b) Without limitation, the functions, powers, and duties of the commissioner include all of the following: (1) To issue or to refuse to issue a license as provided in this division. (2) To allow affiliated companies to be under a single license. The commissioner shall adopt regulations specifying what constitutes an affiliated company for these purposes. (3) To revoke or suspend any license for a violation of this division or a violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code. (4) To keep records of licenses issued under this division. (5) To receive, consider, investigate, and act upon a complaint made in connection with a licensee. (6) To prescribe the form of and to receive applications for licenses and reports, books, and records required to be made or retained by a licensee. (7) To subpoena documents and witnesses, and to compel their attendance and production, to administer oaths, and to require the production of books, papers, or other materials relevant to any inquiry authorized by this division. (8) To require information with regard to an applicant that the commissioner may deem necessary, with regard for the paramount public interest in ascertaining the experience, background, honesty, truthfulness, integrity, and competency of an applicant for collecting consumer debt, and if an applicant is an entity other than an individual, in ascertaining the honesty, truthfulness, integrity, and competency of officers, directors, or managing members of the corporation, association, or other entity, or the general patters of a partnership. (9) To enforce by order any provision of this division. (10) To levy fees, fines, and charges in an amount sufficient to cover the cost of the services performed in administering this division. The fees collected pursuant to this division shall not exceed the costs of administering this division. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  11. 100003.3.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. )

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    The commissioner may suspend or revoke a license, and may adopt regulations about the factors used in that decision.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. ) ## 100003.3. (a) The proceedings for a revocation of a license shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (b) The commissioner may suspend or revoke a license if, after notice and an opportunity for hearing, the commissioner finds any of the following: (1) The licensee violated this division or a regulation adopted or an order issued under this division. (2) The licensee does not cooperate with an examination or investigation by the commissioner. (3) The licensee violates Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code. The commissioner may adopt regulations that specify the factors that the commissioner will consider in revoking or suspending a license, including, but not limited to, the harm to the consumer, the frequency of the violation, and the number of prior disciplinary actions taken against the licensee. (4) The licensee is insolvent, suspends payment of its obligations, or makes a general assignment for the benefit of its creditors. (5) A receiver, liquidator, or conservator has been appointed for a licensee. (6) Any fact or condition exists that, if it had existed at the time that the licensee applied for the license, would have been grounds for denying the application. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  12. 100004.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. )

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    The commissioner may investigate and examine applicants and licensees, access debt-collection-related records and evidence, and control or take possession of documents during an examination.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. ) ## 100004. (a) Notwithstanding any law the commissioner shall have the authority to conduct investigations and examinations of an applicant or licensee as follows: (1) For purposes of determining whether an applicant is eligible for a license, or that a licensee is complying with the provisions of this division or any regulation or order of the commissioner, the commissioner may access, receive, and use any books, accounts, records, files, documents, information, or evidence that relates to debt collection, including, but not limited to, any of the following relating to the intent to, or the practice of, collecting consumer debt: (A) Criminal, civil, and administrative history information. (B) Personal history and experience information, including, but not limited to, independent credit reports obtained from a consumer reporting agency. (C) Any other documents, information, or evidence that the commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control, or custody of those documents, information, or evidence. (2) For the purposes of investigating violations or complaints arising under this division, the commissioner may direct, subpoena, or order the attendance of, and examine under oath, any person whose testimony may be required about the consumer debt or account of the debtor. (b) In making any examination or investigation authorized by this section, the commissioner may control access to any documents and records of the licensee or person under examination or investigation. The commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, no person shall remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the commissioner. Unless the commissioner has reasonable grounds to believe the documents or records of a licensee have been, or are at risk of being, altered or destroyed for purposes of concealing a violation of this division, the licensee or owner of the documents and records shall have access to the documents or records as necessary to conduct their ordinary business affairs. (c) The commissioner may permit affiliated companies to be subject to a single examination. The department shall list all affiliated company names on the license and shall post them on the department’s internet website. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  13. 100005.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. )

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    The commissioner may order certain licensed or unlicensed debt-collection actors to stop violations and may order ancillary relief after notice and a hearing.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. ) ## 100005. (a) If, in the opinion of the commissioner, a person who is required to be licensed under this division is engaged in business as a debt collector without a license from the commissioner, or a person or licensee has violated any provision of this division, an order, or a regulation adopted pursuant to this division, or Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, the commissioner may do any of the following: (1) After notice and an opportunity for a hearing, order the person or licensee to desist and to refrain from engaging in the business of further continuing the violation. (2) After notice and an opportunity for a hearing, order the person or licensee to pay ancillary relief. The ancillary relief may include, but need not be limited to, refunds, restitution, disgorgement, and payment of damages, as appropriate, on behalf of a person injured by the conduct or practice that constitutes the subject matter of the assessment. A person or licensee may dispute an order to pay ancillary relief for an individual violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, if the same injured person brought an action for the same violation against the same person or licensee in court, the action resulted in a final judgment on the merits, and all damages, penalties, or fees have been paid to the injured person. (b) If, in the opinion of the commissioner, a depository institution, as defined in Section 1420, a person licensed pursuant to Division 9 (commencing with Section 22000) or Division 20 (commencing with Section 50000), or a person licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code, has violated Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, the commissioner may take the actions described in paragraphs (1) and (2) of subdivision (a). (c) If, within 30 days after an order issued pursuant to subdivision (a) or (b) is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order shall be deemed rescinded. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  14. 100006.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. )

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    The commissioner may set rules or orders for when electronic records or electronic signatures will be accepted.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. ) ## 100006. (a) Notwithstanding any law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section shall not be deemed to require the commissioner to accept electronic records or electronic signatures. (b) For purposes of this section, the following terms have the following meanings: (1) “Electronic record” means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. “Electronic record” also includes, but is not limited to, all of the following electronic documents: (A) An application, amendment, supplement, and exhibit, filed for any license, consent, or other authority. (B) A financial statement, report, or advertising. (C) A surety bond, rider, or endorsement thereto. (D) An order, license, consent, or other authority. (E) A notice of public hearing, accusation, and statement of issues in connection with any application, license, consent, or other authority. (F) A proposed decision of a hearing officer and a decision of the commissioner. (G) The transcripts of a hearing and correspondence between a party and the commissioner directly relating to the record. (H) A release, newsletter, interpretive opinion, determination, or specific ruling. (I) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (H), inclusive. (2) “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record. (c) The Legislature finds and declares that the Department of Financial Protection and Innovation has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal. (Amended by Stats. 2022, Ch. 452, Sec. 165. (SB 1498) Effective January 1, 2023.)
  15. 100006.3.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. )

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    The commissioner may require license applicants and licensees to use the Nationwide Multistate Licensing System & Registry for filings, applications, fee payments, and related submissions.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. ) ## 100006.3. (a) The commissioner may require an applicant for a license to make some or all of the filings with the commissioner through the Nationwide Multistate Licensing System & Registry. (b) The commissioner may require an application to be made through the Nationwide Multistate Licensing System & Registry, and may require fees, financial statements, supporting documents, changes of address, and any other information, and amendments or modifications thereto, to be submitted by applicants and licensees through the Nationwide Multistate Licensing System & Registry. (c) The commissioner may require licensees to pay annual fees through the Nationwide Multistate Licensing System & Registry. (Amended by Stats. 2023, Ch. 198, Sec. 8. (SB 152) Effective September 13, 2023.)
  16. 100006.5.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. )

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    This section creates the Debt Collection Licensing Fund and related accounts, and directs how licensing fees, fines, penalties, and other deposited monies must be handled.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 1. Commissioner on Financial Protection and Innovation [100003 - 100006.5] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 164. ) ## 100006.5. (a) The Debt Collection Licensing Fund is hereby established within the state treasury. (b) All licensing fees collected shall be deposited into the Fees Account which is hereby established within the fund. (c) All fines and penalties collected shall be deposited into the Penalties Account which is hereby established within the fund. (d) All monies deposited into the fund shall be available to the commissioner, upon appropriation by the Legislation, for the purposes of this division. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  17. 100007.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. )

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    An applicant must file a license application with the commissioner and include specified information, fees, and a sample initial letter.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100007. An applicant shall apply for a license by submitting all of the following to the commissioner: (a) A completed application for a license in a form prescribed by the commissioner and signed under penalty of perjury. An application shall include the location of the applicant’s principal place of business and all branch office locations. (b) (1) An application fee, of three hundred fifty dollars ($350), and an investigation fee, the amount of which shall be determined by the department, to cover any costs incurred in processing an application, including a fingerprint processing and criminal history record check under Section 100009. The investigation fee, including the amount for the criminal history record check, and the application fee are not refundable if an application is denied or withdrawn. (2) The fees assessed pursuant to this subdivision shall be billed and collected by the commissioner at the time of initial application. (c) A sample of the initial letter required pursuant to Section 1692g of Title 15 of the United States Code that the licensee will use in correspondence with California consumers. (Amended by Stats. 2021, Ch. 77, Sec. 6. (AB 137) Effective July 16, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  18. 100008.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. )

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    The commissioner must run FBI background checks and require fingerprints for applicants, with special rules for business entities. Certain applicants cannot be denied a license based on specified convictions, dismissed convictions, or non-conviction arrests, and the commissioner must give written notice if denial is based on conviction history.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100008. (a) The commissioner shall require a background investigation of each applicant by means of a Federal Bureau of Investigation criminal history record check of the individuals subject to investigation under Section 100009 and shall require the submission of fingerprints for each individual subject to investigation under Section 100009. (b) If the applicant is a partnership, corporation, limited liability company, trust, estate, cooperative, association, or other business organization, the commissioner shall require a Federal Bureau of Investigation criminal history record check, including the submission of fingerprints, for each individual described in Section 100009. (c) Notwithstanding any other provision of law, the Nationwide Multistate Licensing System Registry may be used as a channeling agent between the United States Department of Justice and the commissioner for purposes of requesting and distributing information for the background investigations described in this section. (d) (1) An applicant shall not be denied a license on the basis of a criminal conviction, or on the basis of acts underlying a criminal conviction, if the convicted person has obtained a certificate of rehabilitation under Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code or has been granted clemency or a pardon by a state or federal executive. (2) An applicant shall not be denied a license on the basis of a conviction that has been dismissed pursuant to Section 1203.4, 1203.4a, 1203.41, or 1203.425 of the Penal Code. An applicant who has a conviction that has been dismissed pursuant to Section 1203.4, 1203.4a, or 1203.41 of the Penal Code shall provide the commissioner with proof of the dismissal if it is not reflected in the applicant’s criminal history record report. (3) An applicant shall not be denied a license on the basis of an arrest that resulted in a disposition other than a conviction, including an arrest that resulted in an infraction, citation, or juvenile adjudication. (4) An applicant may be denied a license on the grounds that the applicant knowingly made a false statement of fact that is required to be revealed in the application for the license. An applicant shall not be denied a license based solely on an applicant’s failure to disclose a fact that would not have been cause for denial of the license had it been disclosed. (5) If an applicant is denied a license based solely or in part on conviction history, the applicant shall be notified in writing of all of the following: (A) The denial or disqualification of licensure. (B) The procedure for the applicant to challenge the decision or to request reconsideration. (C) That the applicant has the right to appeal the decision. (D) The processes to request a copy of the applicant’s complete conviction history and to question the accuracy or completeness of the record. (Repealed and added by Stats. 2023, Ch. 198, Sec. 10. (SB 152) Effective September 13, 2023.)
  19. 100009.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. )

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    When a license application is filed and fees are paid, the commissioner must investigate the applicant and certain related people or entities.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100009. (a) (1) Upon the filing of an application for a license pursuant to Section 100007 and the payment of the fees, if the applicant is a partnership, the commissioner shall investigate all of the following: (A) The applicant. (B) The applicant’s managing partners and supervising partners, as defined in the partnership agreement. (C) Any individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests in the applicant. (D) Any individual responsible for the conduct of the applicant’s debt collection activities or policies in this state. (2) Upon the filing of an application for a license pursuant to Section 100007 and the payment of the fees, if the applicant is a corporation, trust, limited liability company, or association, including an unincorporated organization, the commissioner shall investigate all of the following: (A) The applicant. (B) Any principal officer of the applicant. (C) The applicant’s board of directors. (D) Any trustee of the applicant. (E) Any managing member of the applicant if the applicant is a limited liability company. (F) Any individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities in the applicant. (G) Any individual responsible for the conduct of the applicant’s debt collection activities or policies in this state. (b) Upon the filing of an application for a license pursuant to Section 100007 and the payment of the fees, the commissioner shall investigate the individual responsible for the debt collection activity of the licensee at the location described in the application. The investigation may be limited to information that was not included in prior applications filed pursuant to this division. (c) For the purposes of this section, “principal officers” means a president, chief executive officer, chief operating officer, treasurer, and chief financial officer, as may be applicable, and any other officer with direct decisionmaking responsibility for the applicant’s debt collection activities or policies in this state. (Amended by Stats. 2023, Ch. 198, Sec. 11. (SB 152) Effective September 13, 2023.)
  20. 10001.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. )

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    Only California savings associations or others authorized by this division may do association business, and foreign savings associations or foreign holding companies may not control a California savings association.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. ) ## 10001. (a) No person, other than a California savings association or other person authorized by this division, shall do any business of an association. (b) No foreign savings association may control a California savings association. (c) No foreign holding company may control a California savings association. (d) The commissioner shall obtain an injunction or take other action necessary to prevent any person from unlawfully doing any business of an association in this state. (Added by Stats. 1987, Ch. 1162, Sec. 19. Effective September 26, 1987. Section operative January 1, 1991, pursuant to Section 10009.)
  21. 100011.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. )

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    If an application is complete and the commissioner finds the requirements are met, the commissioner must issue and deliver a license. If requirements are not met, the commissioner may deny the application after notice and a hearing, and must give a written explanation for the denial.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100011. (a) When the application is complete, including the information from the Department of Justice, and the commissioner determines that the applicant has satisfied the requirements set forth in this division and does not find facts constituting reasons for denial, the commissioner shall issue and deliver a license to the applicant. (b) If the commissioner determines that the requirements have not been satisfied, after notice and an opportunity for a hearing, the commissioner may deny the application and shall provide a written explanation for the denial. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  22. 100012.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. )

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    The commissioner may deny a license application after notice and a hearing if one of several listed reasons applies.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100012. (a) The proceedings for a denial of a license shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (b) After notice and an opportunity for a hearing the commissioner may deny an application for a license for any of the following reasons: (1) A false statement of a material fact has been made in the application. (2) The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, within the last 10 years has (A) been convicted of, or pleaded nolo contendere to, a crime, other than traffic violations, or (B) committed any act involving dishonesty, fraud, or deceit, if the crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with this division. (3) The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, has violated, or is not in material compliance with this division, or an order or rule of the commissioner. (4) A material requirement for issuance of a license has not been met, provided that a written notice of a material omission shall first be sent to the applicant with an opportunity to correct the omission prior to the applicant’s denial. (5) The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, has violated this division or the rules thereunder, or any similar regulatory scheme of this or a foreign jurisdiction. (6) The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, has been held liable by final judgment in a civil action under Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, within the past seven years. (7) The commissioner, based on its investigation of the applicant, is unable to find that the financial responsibility, criminal records, experience, character, and general fitness of the applicant and its general partners, managing members, principal officers and directors, and individuals owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, support a finding that the business will be operated honestly, fairly, efficiently, and in accordance with the requirements of this division. (8) The commissioner may adopt regulations specifying the factors that the commissioner will consider in denying a license, including, but not limited to, the harm to the consumer, the frequency of prior violations, and the number of prior disciplinary actions taken against the licensee in California or in other states. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  23. 100013.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. )

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    The commissioner may treat a license application as abandoned if the applicant does not provide requested information, and the fee already paid is not refunded.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100013. (a) The commissioner may deem an application for a license abandoned if the applicant fails to respond to any request for information required by the commissioner or department during an investigation of the application. (b) The commissioner shall notify the applicant, in writing, that if the applicant fails to submit responsive information within 60 days from the date the commissioner sent the written request for information, the commissioner may deem the application abandoned. (c) An application fee paid prior to the date an application is deemed abandoned shall not be refunded. Abandonment of an application pursuant to this subdivision shall not preclude the applicant from submitting a new application and fee for a license. (Amended by Stats. 2022, Ch. 569, Sec. 12. (AB 156) Effective September 27, 2022.)
  24. 100014.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. )

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    A license stays effective until the commissioner suspends or revokes it, or the licensee surrenders it.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 2. Application for Licensure [100007 - 100014] ( Article 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100014. A license shall remain effective until the license is either suspended or revoked by the commissioner or surrendered by the licensee. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  25. 100015.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [100015 - 100017] ( Article 3 added by Stats. 2020, Ch. 163, Sec. 3. )

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    The commissioner may use and work with the Nationwide Multistate Licensing System & Registry, and must create a process for applicants and licensees to challenge information in the registry.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [100015 - 100017] ( Article 3 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100015. (a) The commissioner is authorized to establish relationships or contracts with the Nationwide Multistate Licensing System & Registry or other entities designated by the Nationwide Multistate Licensing System & Registry to collect and maintain records and process transaction fees or other fees related to licensees or other persons subject to this division. (b) For the purpose of participating in the Nationwide Multistate Licensing System & Registry, the commissioner is authorized to waive or modify, in whole or in part, by rule, regulation, or order, any or all of the requirements of this division and to establish new requirements as reasonably necessary to participate in the Nationwide Multistate Licensing System & Registry. (c) The commissioner may use the Nationwide Multistate Licensing System & Registry as a channeling agent for requesting information from, and distributing information to, the Department of Justice, any other governmental agency, or any other source, as directed by the commissioner. (d) The commissioner shall establish a process through which applicants and licensees may challenge information entered into the Nationwide Multistate Licensing System & Registry by the commissioner. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  26. 100016.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [100015 - 100017] ( Article 3 added by Stats. 2020, Ch. 163, Sec. 3. )

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    This section keeps certain information confidential after it is shared with the Nationwide Multistate Licensing System & Registry, allows sharing with regulatory officials, and limits public disclosure and use in litigation except where specified.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [100015 - 100017] ( Article 3 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100016. (a) Except as otherwise provided in Section 1512 of the SAFE Act (12 U.S.C. Sec. 5111(a)), the requirements under any federal law or the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Part 4 of Division 3 of the Civil Code) regarding the privacy or confidentiality of any information or material provided to the Nationwide Multistate Licensing System & Registry, and any privilege arising under federal or state law, including the rules of any state court, with respect to that information or material, shall continue to apply to the information or material after the information or material has been disclosed to the Nationwide Multistate Licensing System & Registry. The information and material may be shared with all state and federal regulatory officials with industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by federal law or the Information Practices Act. (b) Information or material that is subject to a privilege or confidentiality under subdivision (a) shall not be subject to any of the following: (1) Disclosure under any federal or state law governing the disclosure to the public of information held by an officer or an agency of the federal government or the state. (2) Subpoena or discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by the Nationwide Multistate Licensing System & Registry with respect to the information or material, the person to whom the information or material pertains waives, in whole or in part, in the discretion of that person, that privilege. (c) This section shall not apply with respect to the information or material relating to the employment history of, and publicly adjudicated disciplinary and enforcement actions included in, the Nationwide Multistate Licensing System & Registry for access by the public. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  27. 100017.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [100015 - 100017] ( Article 3 added by Stats. 2020, Ch. 163, Sec. 3. )

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    The commissioner must regularly report certain violations, enforcement actions, and other relevant information to the Nationwide Multistate Licensing System & Registry, but only when the information is a public record.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 2. Licensing [100003 - 100017] ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [100015 - 100017] ( Article 3 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100017. The commissioner shall report regularly violations of this division, as well as enforcement actions and other relevant information, to the Nationwide Multistate Licensing System & Registry, to the extent that the information is a public record. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  28. 100018.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 3. Licensee Duties [100018 - 100022] ( Chapter 3 added by Stats. 2020, Ch. 163, Sec. 3. )

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    Licensees must promptly notify the commissioner in writing when certain license or branch office information changes, and they must not use an unapproved name at a new debt collection location.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 3. Licensee Duties [100018 - 100022] ( Chapter 3 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100018. (a) A licensee shall notify the commissioner, in writing, of any change in the information provided in the application for a license, as applicable, not later than 30 days after the occurrence of the event that results in the information becoming inaccurate or incomplete. (b) (1) If a licensee seeks to change its place of business to a street address other than that designated in its license, the licensee shall provide written notice to the commissioner at least 10 days prior to the change. (2) A licensee shall not engage in the business of debt collection at a new location in a name other than a name approved by the commissioner. (3) A licensee that opens a new branch office or changes the location of an existing branch office shall notify the commissioner in writing of the new or changed branch office location within 30 days after the branch office begins business. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  29. 100019.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 3. Licensee Duties [100018 - 100022] ( Chapter 3 added by Stats. 2020, Ch. 163, Sec. 3. )

    Verify source ↗

    A licensee must follow commissioner rules, submit required reports and examinations, and keep a $25,000 surety bond or refundable deposit on file.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 3. Licensee Duties [100018 - 100022] ( Chapter 3 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100019. A licensee shall do all of the following: (a) Develop policies and procedures reasonably intended to promote compliance with this division. (b) File with the commissioner any report required by the commissioner. (c) Comply with the provisions of this division and any regulation or order of the commissioner. (d) Submit to periodic examination by the commissioner as required by this division and any regulation or order of the commissioner. (e) Maintain a surety bond in accordance with this section in a minimum amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. The surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner within 10 days of execution. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division. The commissioner may require licensees to submit bonds, riders, and endorsements electronically through the Nationwide Multistate Licensing System & Registry’s electronic surety bond function. (1) When an action is commenced on a licensee’s bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license. A licensee may provide the commissioner a refundable deposit in the amount of twenty-five thousand dollars ($25,000) in lieu of the bond while the licensee pursues a new bond. (2) The commissioner may require a higher bond amount for a licensee based on the number of affiliates under the license and the dollar amount of collecting consumer debt by that licensee. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  30. 10002.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. )

    Verify source ↗

    Foreign savings associations and foreign holding companies may do certain business or acquisitions in California, but a reciprocal restriction can be imposed if their home jurisdiction would restrict California savings associations.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. ) ## 10002. Notwithstanding Section 10001, and subject to Section 10003, on and after January 1, 1991, a foreign savings association may conduct the business of an association in California or may acquire control of a California savings association, and a foreign holding company may acquire control of a California savings association; provided that, if the commissioner determines that the laws, court decisions, or practices of the jurisdiction under which the foreign savings association is incorporated or, in the case of a foreign holding company, the holding company’s principal place of deposits, would operate to prohibit, restrict, condition, or otherwise limit a California savings association from conducting the business of, or acquiring control of, a savings association in the relevant jurisdiction pursuant to the laws, court decisions, or practices of that jurisdiction, a similar prohibition, restriction, condition, or limitation to be prescribed by regulation or order of the commissioner shall apply in California to the foreign savings association or foreign holding company. (Added by renumbering Section 10001 by Stats. 1987, Ch. 1162, Sec. 18. Effective September 26, 1987. Section operative January 1, 1991, pursuant to Section 10009.)
  31. 100020.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 3. Licensee Duties [100018 - 100022] ( Chapter 3 added by Stats. 2020, Ch. 163, Sec. 3. )

    Verify source ↗

    Licensees must pay annual fees to the commissioner, and late payment can trigger a 1% monthly penalty and possible suspension or revocation.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 3. Licensee Duties [100018 - 100022] ( Chapter 3 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100020. (a) Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the division in the year in which the annual fee is levied. The pro rata share shall be based upon the proportion of net proceeds generated by California debtor accounts in the preceding year after the amount levied pursuant to subdivision (c). (b) On or before September 30 in each year, the commissioner shall notify each licensee of the amount of the annual fee schedule that will take effect on January 1. If payment is not made by January 1, the commissioner shall assess and collect a penalty, in addition to the fee, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld. (c) In the levying and collection of the annual fees, a licensee shall neither be charged for nor be permitted to pay less than two hundred fifty dollars ($250) nor more than an aggregate of all reasonable costs to operate this division, with the exception of fees associated with investigations and examinations. (d) If a licensee fails to pay the annual fees on or before January 1, the commissioner may by order summarily suspend or revoke the license issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when the license is revoked or suspended, a licensee shall not engage in the business of collecting debt in this state pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a license shall not affect the powers of the commissioner as provided in this division. (e) Notwithstanding subdivisions (a) to (d), inclusive, the commissioner may by rule require licensees to pay annual fees through the Nationwide Multistate Licensing System & Registry. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  32. 100021.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 3. Licensee Duties [100018 - 100022] ( Chapter 3 added by Stats. 2020, Ch. 163, Sec. 3. )

    Verify source ↗

    A licensee must file an annual report with the commissioner by March 15 and may be required to file additional special reports.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 3. Licensee Duties [100018 - 100022] ( Chapter 3 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100021. (a) A licensee shall file an annual report with the commissioner, on or before March 15, that contains all relevant information that the commissioner reasonably requires concerning the business and operations conducted by the licensee in the state during the preceding calendar year, including information regarding collection activity. The report shall, at minimum, require disclosure of all of the following information: (1) The total number of California debtor accounts purchased or collected on in the preceding year. (2) The total dollar amount of California debtor accounts purchased in the preceding year. (3) The face value dollar amount of California debtor accounts in the licensee’s portfolio in the preceding year. (4) The total dollar amount of California debtor accounts collected in the preceding year, and the total dollar amount of outstanding debt that remains uncollected. (5) The total dollar amount of net proceeds generated by California debtor accounts in the preceding year. (6) Whether or not the licensee is acting as a debt collector, debt buyer, or both. (7) The case number of any action in which the licensee was held liable by final judgment under Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code. (b) The individual annual reports filed pursuant to this section shall be made available to the public for inspection. (c) The report shall be made under oath and in the form prescribed by the commissioner. (d) A licensee shall make other special reports that may be required by the commissioner. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  33. 100022.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 3. Licensee Duties [100018 - 100022] ( Chapter 3 added by Stats. 2020, Ch. 163, Sec. 3. )

    Verify source ↗

    If a licensee stops doing debt collection, it must notify the commissioner in writing and hand over the license and other license documents.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 3. Licensee Duties [100018 - 100022] ( Chapter 3 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100022. A licensee that ceases to engage in debt collection shall inform the commissioner in writing and surrender the license and all other indicia of license to the commissioner. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  34. 100023.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 4. Periodic Examination of Licensees [100023- 100023.] ( Chapter 4 added by Stats. 2020, Ch. 163, Sec. 3. )

    Verify source ↗

    The commissioner must examine licensees for compliance, can inspect records and question people under oath, may use electronic submissions instead of site visits in some cases, and must give the licensee the findings and help correct violations.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 4. Periodic Examination of Licensees [100023- 100023.] ( Chapter 4 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100023. (a) As often as the commissioner deems necessary and appropriate, the commissioner shall examine the affairs of each licensee for compliance with this division. The commissioner shall appoint suitable persons to perform the examination. The commissioner and their appointees may examine the books, records, and documents of the licensee, and may examine the licensee’s officers, directors, employees, or agents under oath regarding the licensee’s debt collection operations. (b) The commissioner may cooperate with any agency of the state, the federal government, or other states in performing license examinations. (c) This section does not require the commissioner to conduct examinations at the business offices of licensees. Unless an onsite examination is considered necessary for the protection of the public, the commissioner may conduct some or all examinations without a site visit to the business office of a licensee, by requesting that licensees submit required books and records to the department electronically, via a secure portal. (d) Unless otherwise exempt pursuant to Section 100001, affiliates of a licensee are subject to examination by the commissioner on the same terms as the licensee, but only when reports from, or examination of, a licensee provides documented evidence of unlawful activity between a licensee and affiliate benefitting, affecting, or arising from the activities regulated by this division. (e) The cost of each examination of a licensee shall be paid to the commissioner by the licensee examined, and the commissioner may maintain an action for the recovery of the cost in any court of competent jurisdiction. In determining the cost of the examination, the commissioner may use the estimated average hourly cost for all persons performing examinations of licensees or other persons subject to this division for the fiscal year. (f) The statement of the findings of an examination shall belong to the commissioner and shall not be disclosed to anyone other than the licensee, law enforcement officials, or other state or federal regulatory agencies for further investigation and enforcement. Reports required of licensees by the commissioner under this division and results of examinations performed by the commissioner under this division are the property of the commissioner. (g) The commissioner shall provide a written statement of the findings of the examination, issue a copy of that statement to the licensee and take appropriate steps to ensure correction of any violations of this division. (h) Notwithstanding any provision of this division, the commissioner shall have the authority to waive one or more branch office examinations, if the commissioner deems that the branch office examinations are not necessary for the protection of the public, due to the centralized operations of the licensee or other factors acceptable to the commissioner. (i) In any proceeding under this division, the burden of proving an exemption or an exception from a definition is upon the person claiming it. (Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)
  35. 100025.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 5. Advisory Committee [100025- 100025.] ( Chapter 5 added by Stats. 2020, Ch. 163, Sec. 3. )

    Verify source ↗

    A Debt Collection Advisory Committee is created within the Department of Financial Protection and Innovation, with rules on membership, appointments, service terms, meetings, and compensation.

    ## Financial Code - FIN ## DIVISION 25. Debt Collection Licensing Act [100000 - 100025] ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. ) ## CHAPTER 5. Advisory Committee [100025- 100025.] ( Chapter 5 added by Stats. 2020, Ch. 163, Sec. 3. ) ## 100025. (a) There is within the Department of Financial Protection and Innovation, a Debt Collection Advisory Committee. (b) The Debt Collection Advisory Committee shall advise the commissioner on matters relating to debt collection or the debt collection business, including proposed fee schedules and the mechanics and feasibility of implementing requirements proposed in regulations. (c) The Debt Collection Advisory Committee shall consist of seven members; one of whom shall represent consumers. (1) The members of the Debt Collection Advisory Committee shall be appointed by the commissioner. (2) The term of a member of the Debt Collection Advisory Committee shall be two years. However, a member may be reappointed. (3) Membership in the Debt Collection Advisory Committee shall be voluntary. No person shall be required to accept an appointment to the Debt Collection Advisory Committee, and any member may resign at any time by filing a resignation with the commissioner. (4) No member of the Debt Collection Advisory Committee shall receive any compensation, reimbursement for expenses, or other payment from the state in connection with service on the Debt Collection Advisory Committee. (d) The Debt Collection Advisory Committee shall meet at least twice each calendar year. (e) The commissioner may, by order or regulation, prescribe rules governing the Debt Collection Advisory Committee and its members, including, but not limited to, matters relating to meetings, quorum, and actions. (Amended by Stats. 2022, Ch. 452, Sec. 166. (SB 1498) Effective January 1, 2023.)
  36. 10003.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. )

    Verify source ↗

    Foreign savings associations, and foreign holding companies seeking to acquire control of a California savings association, need the commissioner’s written approval before acting.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. ) ## 10003. No foreign savings association may conduct the business of an association in California, and no foreign savings association or foreign holding company may acquire control of a California savings association, without the written approval of the commissioner. A foreign savings association or foreign holding company shall submit to the commissioner a written application for approval in the form and shall pay such fees as the commissioner prescribes. The foreign savings association or foreign holding company shall submit with the application such information, data, and records as the commissioner may require in order to make his or her determination. The commissioner may issue such regulations as he or she deems to be appropriate to preserve the public interest and integrity of the state’s savings association system and to protect the interests of savings account holders, borrowers, and stockholders resident in this state. The commissioner may make arrangements with the supervisory officials of other states for reciprocal examination of California savings associations, foreign savings associations and foreign holding companies, and the imposition of fees therefor and may condition his or her approval pursuant to this chapter upon the existence of those arrangements. (Added by renumbering Section 10002 by Stats. 1987, Ch. 1162, Sec. 20. Effective September 26, 1987. Section operative January 1, 1991, pursuant to Section 10009.)
  37. 10004.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. )

    Verify source ↗

    A person may not, except where this chapter expressly allows it, sell or solicit savings accounts for a foreign savings association that has not met this chapter’s requirements in California.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. ) ## 10004. Except as expressly provided for in this chapter, any person who, as principal, agent, salesperson, solicitor, or in any other capacity, solicits or conducts in this state the business of selling, disposing of, taking, or soliciting savings accounts of any foreign savings association that has not complied with all the requirements of this chapter, is guilty of a public offense punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail not exceeding one year, or by a fine not exceeding ten thousand dollars ($10,000), or by both that fine and imprisonment. (Amended by Stats. 2011, Ch. 15, Sec. 106. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  38. 10005.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. )

    Verify source ↗

    Certain foreign savings associations and registered broker-dealers are not treated as doing business or soliciting savings accounts in the state when they engage in listed activities, subject to stated conditions and telemarketing limits.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. ) ## 10005. For the purposes of this article and any other law of this state prohibiting, limiting, or regulating the doing of business or the selling, taking, or solicitation of savings accounts in this state by foreign savings associations or foreign corporations, any federally insured foreign savings association subject to state or federal supervision, which by law is subject to periodic examination by that supervisory authority and to a requirement of periodic audit, and any broker-dealer registered in accordance with the requirements of the Securities Exchange Act of 1934 and the Corporate Securities Law of 1968, and any partner, officer, director, branch manager, or person performing similar functions, and employees of that broker-dealer, shall not be considered to be doing business or selling, taking, or soliciting savings accounts in this state by reason of engaging in the following: (a) (1) Any of the activities specified in subdivision (d) of Section 191 of the Corporations Code, or (2) the advertising or solicitation of savings accounts in this state by a federally insured foreign savings association through the media of the mail, radio, television, magazines, newspapers, or any other media that are published or circulated within this state, except through or as a result of telemarketing, provided that the advertising or solicitation as a whole is accurate and does not create a misleading impression even though statements considered separately are literally accurate. A federally insured foreign savings association shall not sell, take or solicit savings accounts through telemarketing by use of the telephone or telephone transceiving equipment, or through the use of an automatic dial-announcing device as defined in Section 2871 of the Public Utilities Code. (b) The offering by a registered broker-dealer of, or the placement by a registered broker-dealer of a customer’s funds into, a savings account at a federally insured foreign savings association chartered under the laws of a state in which broker-dealers make available savings accounts of associations chartered under the laws of this state, provided that (1) any advertising, offering material, or solicitation as a whole is accurate and does not create a misleading impression even though statements considered separately are literally accurate and (2) the savings accounts of the federally insured foreign savings association are rated “investment grade” by either Standard & Poor’s Corporation or Moody’s Investors Service, Inc. based upon the foreign savings association’s ability to repay the savings accounts independent of federal deposit insurance benefits. (Amended (as amended by Stats. 1991, Ch. 1206, Sec. 3) by Stats. 1993, Ch. 469, Sec. 9. Effective January 1, 1994.)
  39. 10006.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. )

    Verify source ↗

    This division applies to a foreign savings association or its holding company as if it were a California savings association, unless regulations provide otherwise.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. ) ## 10006. Except as provided by regulation, this division applies to a foreign savings association or its holding company as if business conducted in this state were that of a California savings association. (Added by Stats. 1987, Ch. 1162, Sec. 24. Effective September 26, 1987. Section operative January 1, 1991, pursuant to Section 10009.)
  40. 10007.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. )

    Verify source ↗

    If a foreign savings association is controlled by a foreign holding company, it must meet the chapter requirements that apply to both entities.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. ) ## 10007. If a foreign savings association is controlled by a foreign holding company, the requirements under this chapter applicable to both a foreign savings association and foreign holding company are required to be met. (Added by Stats. 1987, Ch. 1162, Sec. 25. Effective September 26, 1987. Section operative January 1, 1991, pursuant to Section 10009.)
  41. 10009.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. )

    Verify source ↗

    Chapter 10 becomes operative on January 1, 1991.

    ## Financial Code - FIN ## DIVISION 2. SAVINGS ASSOCIATION LAW [5000 - 10009] ( Division 2 repealed and added by Stats. 1983, Ch. 1091, Sec. 2. ) ## CHAPTER 10. Foreign (National) Savings Companies [10000 - 10009] ( Chapter 10 added by Stats. 1986, Ch. 1057, Sec. 3. ) ## 10009. This chapter shall become operative on January 1, 1991. (Added by renumbering Section 10003 by Stats. 1987, Ch. 1162, Sec. 21. Effective September 26, 1987. Note: This section prescribes a delayed operative date for Chapter 10 (added by Stats. 1986, Ch. 1057), commencing with Section 10000.)
  42. 1001.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This division may be cited as the “Banking Law.”

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1001. This division is known, and may be cited, as the “Banking Law.” (Added by Stats. 2014, Ch. 64, Sec. 10. (AB 2742) Effective January 1, 2015.)
  43. 1002.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank must not be a close corporation.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1002. No bank shall be a close corporation (as defined in Section 158 of the Corporations Code). (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  44. 1003.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section says the banking division applies to certain corporations, national banking associations, and other entities, with exceptions where the text or context says otherwise.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1003. Except where explicitly stated or the context provides otherwise, this division is applicable to the following: (a) All corporations engaging in commercial banking, industrial banking, or the trust business. (b) All national banking associations authorized to transact business in this state to the extent that the provisions of this division are not inconsistent with and do not infringe paramount federal laws governing national banking associations. (c) All other corporations that subject themselves to the special provisions and sections of this division. (d) All other persons, associations, copartnerships, or corporations who, by violating any of its provisions, become subject to the penalties provided for in this division. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  45. 1004.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines a California state bank and a public bank, and says which general corporate laws apply when they conflict with banking laws.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1004. (a) A California state bank is a corporation incorporated under Division 1 (commencing with Section 100) of Title 1 of the Corporations Code or, in the case of a public bank, a corporation incorporated under Part 2 (commencing with Section 5110) or Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code, that is, with the approval of the commissioner, incorporated for the purpose of engaging in, or that is authorized by the commissioner to engage in, the commercial or industrial banking business. (b) (1) All provisions of law applicable to corporations generally, including, but not limited to, the General Corporation Law (Division 1 (commencing with Section 100), Title 1 of the Corporations Code) shall apply to a bank that is not a public bank. However, whenever any provision of this division or any regulation or order issued under any provision (other than this section) of this division applicable to banks is inconsistent with any provision of law applicable to corporations generally, that provision of this division or that regulation or order shall apply and the provision of law applicable to corporations generally shall not apply. (2) All provisions of law applicable to nonprofit corporations generally, including, but not limited to, the Nonprofit Corporation Law (Division 2 (commencing with Section 5000), Title 1 of the Corporations Code) shall apply to public banks. Whenever a provision of Division 5 of Title 5 of the Government Code applicable to public banks is inconsistent with a provision of law applicable to nonprofit mutual benefit corporations or nonprofit public benefit corporations generally, the provision of Division 5 of Title 5 of the Government Code applicable to public banks shall apply, and the inconsistent provision of law applicable to nonprofit mutual benefit corporations or nonprofit public benefit corporations generally shall not apply to a public bank. (c) As used in this section, public bank has the same meaning as defined in Section 57600 of the Government Code. (Amended by Stats. 2019, Ch. 442, Sec. 5. (AB 857) Effective January 1, 2020.)
  46. 1005.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Most entities may not conduct commercial banking, industrial banking, or trust business in the state unless they do so through a corporation formed for that purpose.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1005. It shall be unlawful for any person, corporation, limited liability company, partnership, firm, or any other form of business entity allowed by law, to engage in or transact commercial banking business, industrial banking business, or trust business within this state except by means of a corporation duly organized for that purpose. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  47. 1006.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A corporation may not be organized in this state to do business as a commercial bank, industrial bank, or trust company unless this chapter allows it.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1006. No corporation shall hereafter be organized under the laws of this state to transact the business of a commercial bank, industrial bank, or trust company, except as provided in this chapter. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  48. 1007.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section says the code’s enactment, amendment, or repeal does not remove or reduce any existing or incurred liability or cause of action against a bank, trust company, or its shareholders, directors, or officers.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1007. Neither the enactment of this code nor the amendment or repeal thereof, nor the repeal of any statute affected thereby, shall take away or impair any liability or cause of action existing or incurred against any bank or trust company, or the shareholders, directors, or officers thereof. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  49. 1008.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    For a public bank corporation, references in this division to shares, shareholders, or stockholders mean membership or members of the public bank.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 1. General Provisions [1000 - 1008] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1008. When applicable to a corporation organized as a public bank, as defined in Section 57600 of the Government Code, references in this division to share, shareholder, or stockholder shall mean membership or member in the public bank, as applicable. (Added by Stats. 2019, Ch. 442, Sec. 6. (AB 857) Effective January 1, 2020.)
  50. 101.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    If a Financial Institutions Law provision is preempted by federal law, it does not apply and cannot be enforced.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 101. If and to the extent that any provision of the Financial Institutions Law is preempted by federal law, the provision does not apply and shall not be enforced. (Amended by Stats. 2013, Ch. 334, Sec. 6. (SB 537) Effective January 1, 2014.)
  51. 1020.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A person seeking authority to organize and establish a banking or trust corporation must file an application in the form and with the information the commissioner requires, and must include a $5,000 fee.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1020. The request for authority to organize and establish a corporation to engage in the banking or trust business shall be set forth in an application in such form and containing such information as the commissioner may require and shall be accompanied by a fee of five thousand dollars ($5,000). (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  52. 1021.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If someone requests an application, the commissioner must tell the prospective applicant in writing that the commissioner can confer before the application is filed.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1021. Upon receiving a request for an application, the commissioner shall inform the prospective applicant in writing that the commissioner is available to confer with such prospective applicant in advance of the filing of an application for the purpose of discussing questions relating to such application. However, no application shall be decided in advance of filing. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  53. 1022.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    When an application is filed, the commissioner must investigate and examine the listed matters about the proposed bank or trust company.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1022. Upon the filing of an application the commissioner shall make or cause to be made a careful investigation and examination relative to the following: (a) The character, reputation, and financial standing of the organizers or incorporators and their motives in seeking to organize the proposed bank or trust company. (b) The need for banking or trust facilities or additional banking or trust facilities, as the case may be, giving particular consideration to the adequacy of existing banking or trust facilities and the need for further banking or trust facilities. (c) The character, financial responsibility, banking or trust experience, and business qualifications of the proposed officers of the bank or trust company. (d) The character, financial responsibility, business experience, and standing of the proposed stockholders and directors. (e) Other facts and circumstances bearing on the proposed bank or trust company and its relation to the locality as in the opinion of the commissioner may be relevant. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  54. 1023.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may approve or refuse the application, but cannot approve it until listed conditions are satisfied.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1023. The commissioner may give or withhold his or her approval of the application in his or her discretion, but he or she shall not approve the application until he or she has ascertained to his or her satisfaction: (a) That the public convenience and advantage will be promoted by the establishment of the proposed bank or trust company. (b) That the proposed bank or trust company will have a reasonable promise of successful operation. (c) That the bank is being formed for no other purpose than the legitimate objects contemplated by this division. (d) That the proposed capital structure is adequate. (e) That the proposed officers and directors have sufficient banking or trust experience, ability, and standing to afford reasonable promise of successful operation. (f) That the name of the proposed bank or trust company does not resemble, so closely as to be likely to cause confusion, the name of any other bank or trust company transacting business in this state or which had previously transacted business in this state. (g) That the applicant has complied with all of the applicable provisions of this division. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  55. 1024.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may find certain grounds relating to proposed bank or trust company officers, directors, or controllers when deciding issues under Section 1023.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1024. (a) In this section, “control” has the meaning set forth in Section 1250. (b) For purposes of Section 1023, the commissioner may find: (1) That a proposed officer or director of a proposed bank or trust company does not have sufficient standing to afford reasonable promise of successful operation if such person has been convicted of, or has pleaded nolo contendere to, any crime involving fraud or dishonesty. (2) That the establishment of a proposed bank or trust company will not promote the public convenience and advantage if any person who is proposed to control the proposed bank or trust company or any director or officer of such person has been convicted of, or has pleaded nolo contendere to, any crime involving fraud or dishonesty. (c) Subdivision (b) shall not be deemed to be the only grounds upon which the commissioner may find, for purposes of Section 1023, that a proposed officer or director of a proposed bank or trust company does not have sufficient standing to afford reasonable promise of successful operation or that the establishment of a proposed bank or trust company will not promote the public convenience and advantage. (Amended by Stats. 2013, Ch. 334, Sec. 32. (SB 537) Effective January 1, 2014.)
  56. 1025.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Before denying an application, the commissioner must give written notice at least 30 days in advance and tell the applicant about the right to meet about the reasons for denial.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1025. At least 30 days before denying an application, the commissioner shall by mail or other method of service give written notice of the intended denial of an application and of the right of the applicant to meet with the commissioner regarding the reasons for such denial. The request for such meeting shall be in writing and delivered to the commissioner within 20 calendar days of the date of giving of the notice of intended denial. If a request is made for such meeting, the application may not be denied until after the meeting. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  57. 1026.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may approve an application to organize and establish a banking or trust corporation and may attach conditions the commissioner considers reasonable, necessary, or advisable in the public interest.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1026. The commissioner may, in approving an application to organize and establish a corporation to engage in the banking or trust business pursuant to Section 1023, impose any conditions the commissioner deems reasonable or necessary or advisable in the public interest. (Amended by Stats. 2013, Ch. 334, Sec. 33. (SB 537) Effective January 1, 2014.)
  58. 1027.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may be formed to facilitate a merger or acquisition of control if the commissioner approves it.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 2. Application [1020 - 1027] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1027. (a) With the approval of the commissioner, a bank may be formed to facilitate a merger or an acquisition of control. The new bank may survive the merger or acquisition of control. (b) Sections 1020, 1021, 1022, 1023, and 1024 shall not apply to the formation of a bank pursuant to subdivision (a). (c) Article 4 (commencing with Section 370) of Chapter 3 of Division 1 shall apply to a bank formed pursuant to subdivision (a). (d) A request for approval to form a bank in accordance with subdivision (a) shall be accompanied by a fee of two thousand five hundred dollars ($2,500). (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  59. 103.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    This section defines “bank” for the Financial Institutions Law.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 103. The word “bank” as used in the Financial Institutions Law means any incorporated banking institution that shall have been incorporated to engage in commercial banking business, industrial banking, or trust business. (Amended by Stats. 2013, Ch. 334, Sec. 7. (SB 537) Effective January 1, 2014.)
  60. 1040.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines “preopening expenditure” and “preopening noncapital expenditure” for banks.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1040. In this article: (a) “Preopening expenditure” means any obligation incurred, or sum disbursed, by a bank prior to the time when it commences to transact banking business, for the purpose of organizing such bank. (b) “Preopening noncapital expenditure” means any preopening expenditure other than such preopening expenditures as may be capitalized. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  61. 1041.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A proposed bank or trust company must get the commissioner’s approval for its articles of incorporation before filing them with the Secretary of State, and after filing must submit certified copies, a capital statement, and a $2,500 fee.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1041. The articles of incorporation of the proposed bank or trust company shall be submitted to the commissioner for his or her approval before they are filed with the Secretary of State pursuant to the Corporations Code. After the articles have been filed with the Secretary of State the proposed bank or trust company shall: (a) File with the commissioner a copy of its articles of incorporation, certified by the Secretary of State. (b) File with the commissioner a statement in the form and with any supporting data as the commissioner may require showing that the entire contributed capital has been fully paid in lawful money, unconditionally, and that the funds representing the contributed capital, less sums spent as authorized by this article for preopening expenditures are on deposit in a state or national bank in this state, subject to withdrawal on demand. (c) Pay to the commissioner a fee of two thousand five hundred dollars ($2,500). (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  62. 1042.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If the commissioner finds the applicant has met the legal requirements, the commissioner must issue a certificate of authorization within 30 days after the Section 1041 filing.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1042. If the commissioner finds that the proposed bank or trust company has in good faith complied with all the requirements of law and fulfilled all the conditions precedent to commencing business imposed by this code or by regulation, the commissioner shall, within 30 days after the statement and supporting data specified in Section 1041 have been filed with him or her, issue in duplicate a certificate of authorization to transact business as a bank or trust company, as the case may be, and shall transmit one copy to the bank or trust company and place one copy on file in the department. The certificate of authorization shall state that the corporation named therein has complied with all the provisions of this code governing organization of banks or trust companies and that it is authorized to transact the business specified therein. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  63. 1043.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    It is unlawful to accept payment for share subscriptions for a corporation planning to engage in banking or trust business unless the commissioner has granted authority to organize it.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1043. It shall be unlawful to accept payment of subscriptions for shares of any corporation proposing to engage in the banking or trust business unless authority to organize such corporation has been granted by the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  64. 1044.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Certain banking corporations cannot do business until the commissioner issues a certificate, and banks or trust companies cannot incur non-organization indebtedness until contributed capital is fully paid in lawful money.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1044. No corporation organized to transact a commercial banking or trust business shall transact any business until the commissioner has issued his or her certificate authorizing it to transact such business. No bank or trust company shall incur any indebtedness except that which is incidental to its organization until the amount of its contributed capital has been fully paid in lawful money to the cashier or chief financial officer thereof. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  65. 1045.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A proposed bank or trust company must file incorporation and organization evidence with the commissioner within one year after approval, or the right to organize automatically ends. The commissioner may grant extensions of up to six months each for good cause, if a written application is filed before the current period expires and a $100 fee is paid.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1045. If the proposed bank or trust company fails to file evidence of incorporation and organization with the commissioner pursuant to Section 1041 within one year after the approval of the application for authority to organize the bank or trust company, the right to organize the bank or trust company automatically terminates. The commissioner, however, for good cause on written application filed before the expiration of the original period or any additional period, as the case may be, and payment of a fee of one hundred dollars ($100), may extend for additional periods not in excess of six months each the time within which the bank or trust company may be organized. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  66. 1046.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If a proposed bank or trust company does not open within 90 days after its certificate of authorization, its right to transact business ends automatically. The commissioner may extend that opening time once, for up to 90 more days, if there is good cause and a written application is filed before the 90-day period ends.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1046. If the proposed bank or trust company fails to open for business within 90 days after the issuance of the certificate of authorization, the right to transact business automatically terminates. The commissioner, however, for good cause on written application filed before the end of said 90-day period, may extend for one additional period of not to exceed 90 days the time within which the bank or trust company may open for business. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  67. 1047.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The section forbids using funds collected from subscribers or shareholders to pay commissions or fees for getting subscriptions or selling shares, unless the commissioner has given prior approval for preopening noncapital expenditures.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1047. It is unlawful to apply any part of the funds collected from subscribers or shareholders to the payment of commissions or fees for obtaining subscriptions or selling shares or, except with the prior approval of the commissioner, to the payment of preopening noncapital expenditures. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  68. 1048.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Banks and trust companies must display their certificate of authority in a conspicuous place at their head office banking room.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 3. Authorization to Engage in Banking [1040 - 1048] ( Chapter 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1048. Every bank and trust company shall keep posted in a conspicuous place in its banking room at its head office the certificate of authority to transact a banking or trust business issued by the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  69. 105.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    Banks are classified into commercial banks, industrial banks, and trust companies.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 105. Banks are divided into the following classes: (a) Commercial banks. (b) Industrial banks. (c) Trust companies. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  70. 107.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    This section defines “commercial bank” as a corporation organized to engage in the commercial banking business.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 107. “Commercial bank” means a corporation organized for the purpose of engaging in the commercial banking business. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  71. 1070.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines key banking terms used in Chapter 4, including automated teller machine, branch office, core banking business, facility, head office, noncore banking business, office, and redesignate offices.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1070. For purposes of this chapter, the following definitions apply: (a) “Automated teller machine” means any electronic information processing device used by a financial institution and its customers for the primary purpose of executing transactions solely between the financial institution and its customers, if the transactions are not incidental to sales between the customer and a business entity other than a financial institution. (b) “Branch office” means any office at which core banking business is conducted other than an automated teller machine, a device used to facilitate check guarantee or check authorization, or a remote service facility as defined in subsection (d) of Section 345.12 of Title 12 of the Code of Federal Regulations. (c) “Core banking business” means the business of receiving deposits, paying checks, making loans, and other activities that the commissioner may specify by order or regulation. “Core banking business,” when used to describe the trust business, includes receiving fiduciary assets and administering fiduciary accounts. (d) “Facility,” means an office at which a bank engages in noncore banking business but at which it does not engage in core banking business. (e) “Head office” means the office designated by the bank as its headquarters. (f) “Noncore banking business” means all activities permissible for banks, except core banking business, and except those activities prohibited by law or determined by the commissioner by regulation or order not to be noncore banking business. (g) “Office” means the head office, any branch office, and any facility office of a bank. (h) “Redesignate offices” means (1) the relocation by a bank of its head office to the site of a branch or facility office in this state and the concurrent establishment by the bank of an office at the former site of the head office, or (2) the relocation by a bank of a branch office to the site of a facility office and the concurrent establishment by the bank of a branch or facility office at the former site of the branch office. (Amended by Stats. 2015, Ch. 190, Sec. 33. (AB 1517) Effective January 1, 2016.)
  72. 1071.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner must issue duplicate certificates allowing a bank to establish and maintain an office, and the bank must pay a $25 fee for each certificate issued.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1071. The commissioner shall issue a certificate in duplicate authorizing a bank to establish and maintain an office. A bank shall pay a fee of twenty-five dollars ($25) for every certificate the commissioner issues pursuant to this section. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  73. 1072.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Every bank must establish and maintain a head office in this state.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1072. Every bank shall establish and maintain a head office which shall be located in this state. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  74. 1073.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may establish and maintain one or more offices if its board approves.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1073. A bank, with the approval of its board, may establish and maintain one or more offices. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  75. 1074.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may relocate an office if its board approves.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1074. A bank, with the approval of its board, may relocate an office. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  76. 1075.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may redesignate offices if its board approves.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1075. A bank, with the approval of its board, may redesignate offices. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  77. 1076.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank must file a notice with the commissioner within 10 days whenever it establishes, relocates, or redesignates an office.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1076. Each time a bank establishes an office, relocates an office, or redesignates an office, the bank shall, within 10 days of the establishment, relocation, or redesignation of the offices, file a notice with the commissioner. The notice shall include: (a) The type of office or offices to be established, relocated, or redesignated. (b) The complete address of the office or offices to be established, relocated, or redesignated. If an office is being relocated, the old address of the office and the address at which the office will be relocated. (c) The date the office or offices were established, relocated, or redesignated. (d) The appropriate fee for the certificate or certificates to be issued by the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  78. 1077.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Every bank must file an annual office list with the commissioner by January 1.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1077. On or before January 1 of each year, every bank shall file with the commissioner a list of all offices that are currently maintained and operated by the bank. The report shall designate the type of each office that is being maintained and operated, and the complete address of each office. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  79. 1078.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may close or discontinue a branch office only after filing a required notice with the commissioner and waiting for the commissioner’s non-objection.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1078. (a) A bank may close or discontinue the operation of any branch office if, before the closing or discontinuance, (1) the bank files with the commissioner a notice containing the information in subdivision (b), and (2) the commissioner within 60 days after the filing of the notice or any longer period to which the bank consents, filing of the notice or any longer period to which the bank consents, either (A) issues a written statement not objecting to the notice, or (B) does not issue a written objection to the notice. (b) (1) A notice filed under subdivision (a) shall contain all of the following information: (A) The name of the California state bank. (B) The location of the branch office proposed to be closed or discontinued. (C) The location of the office to which the business of the branch office proposed to be closed or discontinued is proposed to be transferred. (D) The proposed date of closing or discontinuance. (E) A detailed statement of the reasons for the decision to close the branch office. (F) Statistical or other information in support of the reasons consistent with the institution’s written policy for branch office closings. (G) Any other information that the commissioner may require. (2) A notice filed under subdivision (a) shall be in the form, shall be signed in the manner, and shall, if the commissioner requires, be verified in the manner that the commissioner may require. (c) For purposes of subdivision (a), a notice is deemed to be filed with the commissioner at the time when the complete notice, including any amendments or supplements, containing all the information required by the commissioner, and otherwise complying with subdivision (b), is received by the commissioner. (d) In determining whether or not to object to a notice filed under subdivision (a), except if the commissioner finds that it is necessary in the interests of safety and soundness that the branch office be closed or discontinued, the commissioner shall consider whether the closing or discontinuance of the branch office will have a seriously adverse effect on the public convenience or advantage. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  80. 1079.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If the commissioner finds a bank’s office action would be unsafe or unsound, the commissioner may stop the bank from establishing, relocating, or redesignating offices without prior approval and may add further restrictions or conditions.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1079. If the commissioner finds for any reason that the establishment, relocation, or redesignation of office would be unsafe or unsound for a bank, the commissioner may order the bank not to establish, relocate, or redesignate offices without the prior approval of the commissioner. The order may contain any other restrictions and conditions as the commissioner deems necessary. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  81. 1080.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If a bank violates this chapter or does not comply with an order, the commissioner may levy a penalty.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1080. If a bank violates any provision of this chapter or fails to comply with any order, the commissioner may levy a penalty against the bank pursuant to Section 329. (Amended by Stats. 2013, Ch. 334, Sec. 34. (SB 537) Effective January 1, 2014.)
  82. 1081.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may close a facility office with board approval, but must file a discontinuance notice with the commissioner within 10 days and include the information required by Section 1076. No fee is charged for the discontinuance.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1081. A bank, with the approval of its board, may discontinue a facility office. Within 10 days of the date of the closure of the facility office, the bank shall file a notice of that discontinuance with the commissioner. The notice shall contain the information required by Section 1076. There shall be no fee associated with the discontinuance of a facility office. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  83. 1082.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Banks that open a branch office in the state must file a notice with the commissioner within 10 days after the office is established, moved, or redesignated.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1082. Any bank that establishes a branch office in this state in accordance with Section 36(g)(1)(A) of the National Bank Act (12 U.S.C. Sec. 36(g)(1)(A)), or Section 18(d)(4)(A)(i) of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1828(d)(4)(A)(i)), as those sections were amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, shall, within 10 days of the establishment, relocation, or redesignation of the offices, file a notice with the commissioner that includes all of the following: (a) The name of the bank establishing the branch office or offices. (b) The home state or state of incorporation of the bank establishing the branch office or offices. (c) The complete address of the office or offices established or to be established. (d) The date the branch office or offices were or will be opened. (e) Any other information, if any, that the commissioner deems necessary. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  84. 1083.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may run a school-based financial education program that handles deposits or withdrawals, if six listed conditions are met.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4. Bank Offices [1070 - 1083] ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1083. (a) A bank may participate in a financial education program that involves receiving deposits or paying withdrawals on the premises of, or at a facility used by, a school. The school premises or facility will not be considered a branch office of the bank, as that term is defined in Section 1070 of the Financial Code, if all of the following conditions are met: (1) The bank does not establish and operate the school premises or facility in which the program is conducted. (2) Bank employees work at the site only to participate in the program. (3) The program is provided at the discretion of the school. (4) The principal purpose of the program is financial education. For example, a program is educational if it is designed to teach students the principles of personal financial management, banking operations, or the benefits of saving for the future, and is not designed for the purpose of profitmaking. (5) No services are provided to the general public. (6) The program is conducted in a manner that is consistent with safe and sound banking practices and complies with applicable law. (b) A bank that participates in a financial education program pursuant to this section shall be liable for all deposits made on the premises of, or at a facility used by, a school as if the deposit was made directly at a branch office of the bank. (Added by Stats. 2016, Ch. 180, Sec. 1. (AB 1784) Effective January 1, 2017.)
  85. 109.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    This section defines “commercial banking business.”

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 109. “Commercial banking business” includes, but is not limited to, the business of soliciting, receiving, or accepting of money or its equivalent on deposit as a regular business whether the deposit is made subject to check or is evidenced by a certificate of deposit, a passbook, a note, a receipt, or other writing, provided that nothing herein shall apply to or include money or its equivalent left in escrow, or left with an agent pending investment in real estate or securities for, or on account of, his or her principal. In addition, “commercial banking business” means to lend money on the security of real or personal property or without security; to discount or deal in bills, notes, or other commercial paper; to buy and sell for the account of customers, and, if eligible for investment, for its own account, securities, gold and silver bullion, foreign coins, and bills of exchange; and generally to transact a commercial banking business. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  86. 1090.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This chapter may be cited as the “Bank Extraordinary Situation Closing Act.”

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1090. This chapter is known and may be cited as the “Bank Extraordinary Situation Closing Act.” (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  87. 1091.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines “extraordinary situation” for bank offices.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1091. “Extraordinary situation” means any condition or occurrence, other than as set forth in Section 592, that may interfere or is inconsistent with the conduct of normal business operations at one or more offices of a bank or which poses a threat to the safety or security of persons or property, or both. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  88. 1092.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If the commissioner finds an extraordinary situation and proclaims it, banks in the affected area may be authorized to close offices, and closed offices must stay closed until the situation ends or reopening is allowed.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1092. Whenever the commissioner determines that an extraordinary situation exists anywhere in this state the commissioner may, by proclamation, authorize banks located in the affected area or areas to close any or all of their offices. The office or offices so closed shall remain closed until the commissioner proclaims that the extraordinary situation has ended or until such earlier time as the officers of the bank determine that one or more closed offices should reopen and in either event for such further time thereafter as may reasonably be required to reopen. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  89. 1093.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Bank officers may close bank offices during an extraordinary situation, and may also close offices on days designated by proclamation for mourning, rejoicing, or other special observance.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1093. (a) Whenever the officers of a bank are of the opinion that an extraordinary situation exists which affects or may affect one or more of a bank’s offices, they shall have the authority in the reasonable and proper exercise of their discretion to determine not to open such offices on any business or banking day, or, if such offices have opened to close one or more of them during the continuation of such extraordinary situation even if the commissioner has not issued and does not issue a proclamation of extraordinary situation. The office or offices so closed shall remain closed until such time as the officers determine with respect to each such office that the extraordinary situation has ended and for such further time thereafter as may reasonably be required to be reopened; however, in no case shall such office or offices remain closed for more than 48 consecutive hours excluding other legal holidays without requesting the approval of the commissioner nor, in case such request is denied by the commissioner, for more than 24 consecutive hours excluding other legal holidays after such denial. (b) The officers of a bank may close one or more of the bank’s offices on any day or days designated for mourning, rejoicing, or other special observance by proclamation of the Governor or the President of the United States. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  90. 1094.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank that closes an office or offices under Section 1093 must promptly notify the commissioner.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1094. A bank closing an office or offices pursuant to the authority granted under subdivision (a) of Section 1093 shall give prompt notice of its action to the commissioner, by any means available. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  91. 1095.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    When a bank or one of its offices is closed under this chapter, that day counts as a legal holiday for banking business, and the closure does not create liability or loss of rights for the bank or its directors, officers, or employees.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1095. Any day on which a bank or any one or more of its offices is closed pursuant to the authorization granted by this chapter shall be, with respect to such bank or any of its offices which are closed, a legal holiday for all purposes with respect to any banking business of any character. No liability, or loss of rights of any kind, on the part of any bank or director, officer, or employee thereof, shall accrue or result by virtue of any closing authorized by this chapter. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  92. 1096.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This chapter is to be read as additional to, not replacing or limiting, other state or federal laws that let a bank close or excuse delays caused by extraordinary situations beyond the bank’s control.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 4.5. Bank Extraordinary Situation Closing [1090 - 1096] ( Chapter 4.5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1096. Provisions of this chapter shall be construed and applied as being in addition to, and not a substitution for, or limitation of, any other law of this state or the United States authorizing the closing of a bank or excusing the delay by a bank in the performance of its duties and obligations because of extraordinary situations or conditions beyond the bank’s control or otherwise. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  93. 11.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    This section says that words using the masculine gender also include the feminine and neuter.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. ) ## 11. The masculine gender includes the feminine and neuter. (Enacted by Stats. 1951, Ch. 364.)
  94. 11.2.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    This section says that “spouse” includes a registered domestic partner.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. ) ## 11.2. “Spouse” includes “registered domestic partner,” as required by Section 297.5 of the Family Code. (Added by Stats. 2016, Ch. 50, Sec. 36. (SB 1005) Effective January 1, 2017.)
  95. 1100.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Each bank’s articles must include the applicable required purpose statement, depending on the type of bank.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1100. The articles of each bank shall contain the applicable one of the following statements: (a) Except as provided in subdivision (f), if the bank is, or is proposed to be, a commercial bank not authorized to engage in trust business, that the purpose of the corporation is to engage in commercial banking business and any other lawful activities which are not, by applicable laws or regulations, prohibited to a commercial bank. (b) Except as provided in subdivision (f), if the bank is, or is proposed to be, a commercial bank authorized to engage in trust business, that the purpose of the corporation is to engage in commercial banking business and trust business and any other lawful activities which are not, by applicable laws or regulations, prohibited to a commercial bank authorized to engage in trust business. (c) Except as provided in subdivision (f), if the bank is, or is proposed to be, an industrial bank not authorized to engage in trust business, that the purpose of the corporation is to engage in industrial banking business and any other lawful activities which are not, by applicable laws or regulations, prohibited to an industrial bank. (d) Except as provided in paragraph (f), if the bank is, or is proposed to be, an industrial bank authorized to engage in trust business, that the purpose of the corporation is to engage in industrial banking business and trust business and any other lawful activities which are not, by applicable laws or regulations, prohibited to an industrial bank authorized to engage in trust business. (e) In case the bank is, or is proposed to be, a trust company (other than a commercial bank authorized to engage in trust business), that the purpose of the corporation is to engage in trust business and any other lawful activities which are not, by applicable laws or regulations, prohibited to a trust company. (f) If the bank is, or is proposed to be, a public bank, the articles shall set forth a statement of purpose that is prescribed in subdivision (a) or (b) of Section 57601 of the Government Code. (Amended by Stats. 2019, Ch. 442, Sec. 7. (AB 857) Effective January 1, 2020.)
  96. 110000.

    ## Financial Code - FIN ## DIVISION 26. Firearms Merchant Category Code [110000 - 110002] ( Division 26 added by Stats. 2023, Ch. 247, Sec. 1. )

    Verify source ↗

    This section defines terms used in Division 26, including ammunition, firearm, firearm accessory, firearms merchant, merchant acquirer, and payment card network.

    ## Financial Code - FIN ## DIVISION 26. Firearms Merchant Category Code [110000 - 110002] ( Division 26 added by Stats. 2023, Ch. 247, Sec. 1. ) ## 110000. For purposes of this division, the following definitions apply: (a) “Ammunition” has the same meaning as provided in subdivision (b) of Section 16150 of the Penal Code. (b) “Firearm” has the same meaning as provided in subdivisions (a) and (b) of Section 16520 of the Penal Code. (c) “Firearm accessory” means an attachment or device designed or adapted to be inserted into, affixed onto, or used in conjunction with a firearm that is designed, intended, or functions to alter or enhance the firing capabilities of a firearm, the lethality of the firearm, or a shooter’s ability to hold and use a firearm. (d) “Firearms merchant” means a business licensed in California as a firearms dealer or ammunition vendor for which the highest sales value is, or is expected to be, from the combined sale in California of firearms, firearm accessories, or ammunition, as stated by the business to its merchant acquirer in the ordinary course of business. (e) “Merchant acquirer” means an entity that establishes a relationship with a merchant for the purposes of processing credit, debit, or prepaid transactions. (f) “Payment card network” means an entity that provides services that route transactions between bank participants to conduct debit, credit, or prepaid transactions for the purpose of authorization, clearance, or settlement. (Added by Stats. 2023, Ch. 247, Sec. 1. (AB 1587) Effective January 1, 2024.)
  97. 110001.

    ## Financial Code - FIN ## DIVISION 26. Firearms Merchant Category Code [110000 - 110002] ( Division 26 added by Stats. 2023, Ch. 247, Sec. 1. )

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    A payment card network must make a firearms-and-ammunition merchant category code available by July 1, 2024, and a merchant acquirer must assign that code to a firearms merchant starting May 1, 2025.

    ## Financial Code - FIN ## DIVISION 26. Firearms Merchant Category Code [110000 - 110002] ( Division 26 added by Stats. 2023, Ch. 247, Sec. 1. ) ## 110001. (a) By July 1, 2024, a payment card network shall make the merchant category code for firearms and ammunition businesses established by the International Organization for Standardization on September 9, 2022, available for merchant acquirers that provide payment services for firearms merchants. (b) Beginning May 1, 2025, a merchant acquirer shall assign to a firearms merchant the merchant category code for firearms and ammunition businesses established by the International Organization for Standardization on September 9, 2022. (c) A waiver of a provision of this division is contrary to public policy and is void and unenforceable. (Added by Stats. 2023, Ch. 247, Sec. 1. (AB 1587) Effective January 1, 2024.)
  98. 110002.

    ## Financial Code - FIN ## DIVISION 26. Firearms Merchant Category Code [110000 - 110002] ( Division 26 added by Stats. 2023, Ch. 247, Sec. 1. )

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    The Attorney General has exclusive authority to enforce this division, and must give written notice before suing. If the noticed violation is cured within 30 days and a written confirmation is provided, the Attorney General may not bring the action.

    ## Financial Code - FIN ## DIVISION 26. Firearms Merchant Category Code [110000 - 110002] ( Division 26 added by Stats. 2023, Ch. 247, Sec. 1. ) ## 110002. (a) The Attorney General has exclusive authority to enforce this division. (b) Not later than the 30th day before bringing an action under subdivision (e), the Attorney General shall give written notice to the person or entity identifying the specific provisions of this chapter that are or were being violated. (c) The Attorney General shall not bring an action under subdivision (e) if the person or entity who receives the notice described in subdivision (b) does both of the following: (1) Cures the identified violation within 30 days of receiving the notice. (2) Provides the Attorney General a written statement confirming that the person or entity has done all of the following: (A) Cured the violation. (B) Provided supporting documentation to show how the violation was cured. (C) Made changes to internal policies to prevent the recurrence of violations in the future. (d) A person or entity who violates this division and fails to cure the violation in accordance with subdivision (c) shall be liable as provided in subdivision (e). (e) (1) The Attorney General may bring a civil action to enforce this division and remedy harm caused by a violation of this division. (2) If a court determines that a person or entity has violated this division, the court shall award all of the following relief: (A) A civil penalty in the amount of ten thousand dollars ($10,000) for each violation. (B) Injunctive relief sufficient to prevent the person or entity from further violations of this division. (C) Reasonable attorney’s fees and costs incurred in investigating and bringing an action under this division. (Amended by Stats. 2024, Ch. 80, Sec. 45. (SB 1525) Effective January 1, 2025.)
  99. 1101.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    This section says a bank’s assessment provision stops having legal effect, lets the bank delete it from its articles with only board approval, and ends related assessment collection actions.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1101. (a) In this section: (1) “Assessment provision” means the provision in the articles of a bank that complies with the requirements of Section 600.2, as in effect immediately before the effective date of this section, or any predecessor statute. (2) “Bank” means any (A) California state bank or (B) corporation organized under the laws of this state for the purpose of transacting business pursuant to Article 1 (commencing with Section 1850) of Chapter 21. (b) On and after the effective date of this section, the assessment provision in the articles of a bank shall no longer be of any force or effect. (c) Notwithstanding Sections 902 and 903 of the Corporations Code, a bank may, on or after the effective date of this section, amend its articles by deleting the assessment provision with the approval of its board alone and without any approval of its outstanding shares. (d) (1) Any order issued before the effective date of this section by the commissioner pursuant to Section 662, as in effect immediately before the effective date of this section or any predecessor statute, shall, if and to the extent that the bank has not before that date levied and collected through sale of shares or otherwise, an assessment on its common shares, be deemed rescinded. (2) Any proceeding commenced before the effective date of this section by a bank to assess its common shares in accordance with an order issued by the commissioner pursuant to Section 662, as in effect immediately before the effective date of this section or any predecessor statute, shall be terminated on the effective date of this section. On and after the effective date of this section, the bank shall take no further action to levy or collect the assessment on its common shares, and any lien on the common shares created by the assessment shall be deemed extinguished. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  100. 1102.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank’s article amendments generally do not take effect until the amendment papers are filed with the Secretary of State and endorsed with the commissioner’s approval.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1102. (a) No amendment of the articles of a bank (other than an amendment set forth in an agreement of merger or in a certificate of ownership executed pursuant to Section 1110 of the Corporations Code that requires the approval of the commissioner pursuant to Chapter 4 (commencing with Section 4880) of Division 1.6) shall become effective unless the certificate of amendment or other instrument setting forth the amendment is filed with the Secretary of State with the commissioner’s approval endorsed thereon. Promptly after the amendment becomes effective, the bank shall file with the commissioner a copy of the certificate of amendment or other instrument certified by the Secretary of State. (b) Any amendment of the articles of a bank set forth in an agreement of merger or in a certificate of ownership executed pursuant to Section 1110 of the Corporations Code that requires the approval of the commissioner pursuant to Chapter 4 (commencing with Section 4880) of Division 1.6, shall become effective at the time when the merger becomes effective pursuant to this division. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  101. 1103.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank’s restated articles do not take effect unless the related certificate is filed with the Secretary of State and the commissioner’s approval is endorsed on it.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1103. No restated articles of a bank shall become effective unless the certificate setting forth such restated articles is filed with the Secretary of State with the commissioner’s approval endorsed thereon. Promptly after the restated articles become effective, such bank shall file with the commissioner a copy of such certificate certified by the Secretary of State. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  102. 1104.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank’s certificate of determination does not take effect unless it is filed with the Secretary of State and shows the commissioner’s approval; after it becomes effective, the bank must promptly file a certified copy with the commissioner.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1104. No certificate of determination of a bank shall become effective unless such certificate of determination is filed with the Secretary of State with the commissioner’s approval endorsed thereon. Promptly after the certificate of determination becomes effective, such bank shall file with the commissioner a copy of the certificate of determination certified by the Secretary of State. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  103. 1105.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank’s certificate of correction does not become effective unless it is filed with the Secretary of State and the commissioner’s approval is endorsed on it.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1105. No certificate of correction of a bank shall become effective unless such certificate of correction is filed with the Secretary of State with the commissioner’s approval endorsed thereon. Promptly after the certificate of correction becomes effective, such bank shall file with the commissioner a copy of the certificate of correction certified by the Secretary of State. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  104. 1106.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank’s certificate of revocation is effective only if filed with the Secretary of State and endorsed with the commissioner’s approval; after it becomes effective, the bank must promptly file a certified copy with the commissioner.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1106. No certificate of revocation of a bank shall become effective unless such certificate of revocation is filed with the Secretary of State with the commissioner’s approval endorsed thereon. Promptly after the certificate of revocation becomes effective, such bank shall file with the commissioner a copy of the certificate of revocation certified by the Secretary of State. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  105. 1107.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank may change its name if it files a report with the commissioner at least 30 days before the change.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Articles, Bylaws, and Names [1100 - 1107] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1107. (a) A bank may change its name if it files with the commissioner a report on the proposed change not less than 30 days before the change. The report shall be in the form, shall contain the information, shall be signed in the manner, and shall, if the commissioner so requires, be verified in the manner the commissioner may require. (b) Whenever a bank changes its name, the bank shall surrender to the commissioner for cancellation the certificates of authority under its old name for its head office, any branch offices, and any places of business. The commissioner shall issue to the bank replacement certificates under the bank’s new name and the bank shall pay to the commissioner a fee of twenty-five dollars ($25) for each replacement certificate. (c) The commissioner may not deny an application for approval of an amendment of the articles of incorporation of a bank which changes the name of the bank or any other application of a bank relating to a change in the name of the bank because the new name of the bank resembles so closely, as to be likely to cause confusion, the name of any other bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  106. 111.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

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    “Industrial bank” means a corporation organized to engage in industrial banking.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 111. “Industrial bank” means a corporation organized for the purpose of engaging in the industrial banking business. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  107. 1120.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Shares [1120 - 1122] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank may set or reset the par value of its shares, but only with board approval and unless its articles already require a par value and specify it.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Shares [1120 - 1122] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1120. A bank may, with the approval of its board, determine and from time to time redetermine the par value of any class or series of its shares unless its articles provide that such shares shall have par value and specify the par value of such shares. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  108. 1121.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Shares [1120 - 1122] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Banks and trust companies may not issue shares before the shares are fully paid for.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Shares [1120 - 1122] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1121. No bank or trust company after October 1, 1949, shall issue any shares before they are fully paid for. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  109. 1122.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Shares [1120 - 1122] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank must not issue shares in exchange for services rendered in organizing the bank or for a note made by the purchaser of the shares.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Shares [1120 - 1122] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1122. No bank shall issue any shares in consideration of: (a) Services rendered in the organization of such bank; or (b) Any note (whether or not negotiable and whether or not secured) made by the purchaser of such shares. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  110. 113.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    This section defines “industrial banking business” as making loans and accepting deposits, including deposits evidenced by investment or thrift certificates, but not demand deposits.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 113. “Industrial banking business” includes the making of loans and acceptance of deposits, including deposits evidenced by investment or thrift certificates, but excluding demand deposits. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  111. 1130.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This article does not apply to distributions to a bank’s shareholders when the bank is being wound up, dissolved, or liquidated.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1130. This article does not apply to any distribution made to the shareholders of a bank in any proceeding to wind up and dissolve or to liquidate such bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  112. 1131.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Section 500 of the Corporations Code does not apply when a bank or a majority-owned subsidiary of a bank makes a distribution to that bank’s shareholders.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1131. Section 500 of the Corporations Code does not apply to the making by a bank or by any majority-owned subsidiary of a bank of any distribution to the shareholders of such bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  113. 1132.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank, and any majority-owned subsidiary of a bank, may not make shareholder distributions above the stated cap.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1132. Neither a bank nor any majority-owned subsidiary of a bank shall make any distribution to the shareholders of such bank in an amount which exceeds the lesser of: (a) The retained earnings of the bank; or (b) The net income of the bank for its last three fiscal years, less the amount of any distributions made by the bank or by any majority-owned subsidiary of the bank to the shareholders of the bank during such period. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  114. 1133.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank, or a majority-owned subsidiary of a bank, may make a shareholder distribution only with the commissioner’s prior approval and only up to the greatest of three stated financial measures.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1133. Notwithstanding the provisions of Section 1132, a bank or a majority-owned subsidiary of a bank may, with the prior approval of the commissioner, make a distribution to the shareholders of such bank in an amount not exceeding the greatest of: (a) The retained earnings of the bank; (b) The net income of the bank for its last fiscal year; or (c) The net income of the bank for its current fiscal year. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  115. 1134.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may make certain shareholder distributions only with required prior approval.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1134. Notwithstanding the provisions of Section 1132, a bank may: (a) With the prior approval of the commissioner, make a distribution to its shareholders by means of redeeming its redeemable shares; and (b) With the prior approval of its outstanding shares and of the commissioner, otherwise make a distribution to its shareholders in connection with a reduction of its contributed capital. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  116. 1135.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If the commissioner finds a bank’s equity is inadequate or a distribution would be unsafe or unsound, the commissioner may order the bank and its majority-owned subsidiaries not to make distributions to shareholders.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. Distributions to Shareholders [1130 - 1135] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1135. If the commissioner finds that the shareholders’ equity of a bank is not adequate or that the making by a bank or by any majority-owned subsidiary of a bank of a distribution to the shareholders of the bank would be unsafe or unsound for the bank, the commissioner may order the bank and its majority-owned subsidiaries not to make any distribution to the shareholders of the bank. In addition to the order authorized by this section, the commissioner may levy a civil penalty against the bank pursuant to Section 329. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  117. 115.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    This section defines “trust business.”

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 115. “Trust business” means the business of acting as executor, administrator, guardian or conservator of estates, assignee, receiver, depositary or trustee under the appointment of any court, or by authority of any law of this or any other state or of the United States, or as trustee for any purpose permitted by law. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  118. 1150.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 4. Shareholders’ Equity [1150 - 1152] ( Article 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    When deciding whether a bank’s shareholders’ equity is adequate, the commissioner must consider the listed business, asset, liability, charge, income, operations, management, ownership, and other relevant factors.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 4. Shareholders’ Equity [1150 - 1152] ( Article 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1150. In determining for purposes of this division whether the shareholders’ equity of a bank or of a proposed bank is adequate, the commissioner shall consider: (a) The nature and volume of the business of the bank; (b) The amount, nature, quality, and liquidity of the assets of the bank; (c) The amount and nature of the liabilities (including, but not limited to, any capital notes or debentures and any contingent liabilities) of the bank; (d) The amount and nature of the fixed charges of the bank; (e) The history of, and prospects for, the bank to earn and retain income; (f) The quality of the operations of the bank; (g) The quality of the management of the bank; (h) The nature and quality of the ownership of the bank; and (i) Such other factors as are in the opinion of the commissioner relevant. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  119. 1151.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 4. Shareholders’ Equity [1150 - 1152] ( Article 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may set up and move money among capital, surplus, and undivided profits accounts, but only with board approval and subject to limits on contributed capital, retained earnings, and par value.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 4. Shareholders’ Equity [1150 - 1152] ( Article 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1151. For purposes of any statute, regulation, or requirement of any governmental official or agency which refers to the capital (including, without limitation, stated capital, paid-in capital, and paid-up capital, but excluding contributed capital), surplus, or undivided profits of a bank, a bank, with the approval of its board, may establish and maintain capital, surplus, and undivided profits accounts and may from time to time allocate and reallocate its shareholders’ equity among such accounts; provided, however: (a) That no part of the contributed capital of the bank shall be allocated to the undivided profits account of the bank; (b) That the undivided profits account of the bank shall at no time exceed the retained earnings of the bank; and (c) That, in case the articles of the bank provide that any of the bank’s shares shall have par value and specify the par value of such shares or in case the bank has determined the par value of any of its shares pursuant to Section 1120, the capital account of the bank shall be not less than the aggregate par value of such shares which are outstanding. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  120. 1152.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 4. Shareholders’ Equity [1150 - 1152] ( Article 4 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank with deficit retained earnings may readjust its accounts in a quasi-reorganization if it gets prior approval from its outstanding shares and the commissioner.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 4. Shareholders’ Equity [1150 - 1152] ( Article 4 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1152. A bank which has deficit retained earnings may, with the prior approval of its outstanding shares and of the commissioner, readjust its accounts in a quasi-reorganization. Such readjustment may include, without limitation, eliminating such deficit retained earnings. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  121. 117.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    “Trust company” is defined as a corporation, industrial bank, or commercial bank authorized to engage in the trust business.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 117. “Trust company” means a corporation, industrial bank, or a commercial bank that is authorized to engage in the trust business. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  122. 1170.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    References in this article to when a notice is given or sent must be read according to Section 118 of the Corporations Code.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1170. Any reference in this article to the time a notice is given or sent shall be construed in accordance with Section 118 of the Corporations Code. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  123. 1171.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A newly organized bank or trust company must have a board of 5 to 25 directors, and it cannot change its governing documents to reduce the board below 5.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1171. The board of a bank or trust company hereafter organized shall consist of not less than 5 nor more than 25 directors, and no bank or trust company shall amend its articles or bylaws so as to reduce the number of directors below five. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  124. 1172.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Bank and trust company boards must meet at least once every calendar quarter, with regular meetings held within the state. Special meetings can be valid anywhere if all board members give written consent and it is filed, and special meetings may be called on specified notice periods unless the bylaws say otherwise.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1172. The board of each bank and of each trust company shall hold a meeting not less than once each calendar quarter. Regular meetings of the board shall be held within this state. Any regular or special meeting is valid wherever held if held upon written consent of all members of the board given either before or after the meeting and filed with the secretary of the corporation. Special meetings of the board may be held upon four days’ notice by mail, unless the articles or bylaws provide otherwise, or 24 hours’ notice delivered personally or by telephone or by telegraph, unless the articles or bylaws provide for a shorter period. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  125. 1173.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may bring or join a court action about the validity of a bank director’s election or appointment.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1173. The commissioner may, in the name of the people of this state, bring or intervene in an action under Section 709 of the Corporations Code to determine the validity of any election or appointment of any director of a bank to the same extent as a shareholder of such bank might bring such an action. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  126. 1174.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may bring or join court actions related to appointing bank directors or provisional directors.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1174. (a) The commissioner shall be deemed to be a party in interest within the meaning of Section 306 of the Corporations Code with respect to a bank and may, in the name of the people of this state, bring or intervene in an action under Section 306 of the Corporations Code for the appointment of directors of a bank. (b) The commissioner may, in the name of the people of this state, bring or intervene in an action under Section 308 of the Corporations Code for the appointment of a provisional director or directors of a bank to the same extent as a shareholder who held 50 percent of the voting power of such bank might bring such an action. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  127. 1175.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section lets the commissioner sue or intervene against bank directors for certain illegal distributions and, instead, impose a civil penalty on the bank.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1175. (a) For purposes of Section 316 of the Corporations Code, to the extent that the making by a bank or by any majority-owned subsidiary of a bank of a distribution to any shareholder of the bank is contrary to any provision of Article 3 (commencing with Section 1130), the making of the distribution shall, to that extent, be deemed to be contrary to the provisions of Section 500 of the Corporations Code. (b) The commissioner may, in the name of the people of this state, bring or intervene in an action under Section 316 of the Corporations Code for the benefit of a bank against any or all of the directors of the bank or of any majority-owned subsidiary of the bank on account of the making of a distribution to any shareholder of the bank contrary to any provision of Article 3 (commencing with Section 1130) or any provision of Sections 501, 502, and 503 of the Corporations Code, to the same extent as a creditor of the bank who did not consent to the illegal distribution and who had a valid claim against the bank that arose prior to the time of the illegal distribution and exceeded the amount of the illegal distribution, may bring the action in the name of the bank. (c) As an alternative to the action provided for in subdivision (b), the commissioner may levy a civil penalty against the bank pursuant to Section 329. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  128. 1176.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section lets the commissioner sue or intervene on behalf of a bank, or instead impose a civil penalty on the bank, when a bank loan, guarantee, or other extension of credit violates this division.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 5. Directors [1170 - 1176] ( Article 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1176. (a) For purposes of Section 316 of the Corporations Code, the making of a loan or guarantee by a bank or any other extending of credit by a bank contrary to any provision of this division shall be deemed to be contrary to Section 315 of the Corporations Code. (b) The commissioner may, in the name of the people of this state, bring or intervene in an action under Section 316 of the Corporations Code for the benefit of a bank against any or all of the directors of the bank on account of the making of a loan or guarantee or any other extending of credit contrary to any provision of this division, to the same extent as a creditor of the bank who did not consent to the illegal making of the loan or guarantee or the other illegal extending of credit and who had a valid claim against the bank which arose prior to the time of the illegal making of the loan or guarantee or the other illegal extending of credit and which exceeded the amount of loss suffered by the bank as a result of the illegal making of the loan or guarantee or the other illegal extending of credit, might bring the action in the name of the bank. (c) As an alternative to the action provided for in subdivision (b), the commissioner may levy a civil penalty against the bank pursuant to Section 329. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  129. 119.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    This section defines “bank” or “banks” to include certain bank types and a public bank, but it excludes savings associations and credit unions.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 119. “Bank” or “banks” includes a public bank, as defined in Section 57600 of the Government Code, commercial banks, industrial banks, and trust companies unless the context otherwise requires. However, “bank” does not include a savings association or a credit union. (Amended by Stats. 2019, Ch. 442, Sec. 4. (AB 857) Effective January 1, 2020.)
  130. 1190.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 6. Shareholders [1190- 1190.] ( Article 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Banks get an exemption from one reporting rule for credit-extension transactions, but must still disclose specified debt and credit information in annual reports as required by the commissioner.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 5. Corporate Requirements [1100 - 1190] ( Chapter 5 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 6. Shareholders [1190- 1190.] ( Article 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1190. (a) Paragraph (1) of subdivision (b) of Section 1501 of the Corporations Code does not apply to the annual report of any bank with respect to any transaction consisting of an extension of credit by such bank or by any of its majority-owned subsidiaries. (b) The annual report of a bank which would, but for the provisions of subdivision (a), be subject to paragraph (1) of subdivision (b) of Section 1501 of the Corporations Code, shall disclose such information regarding debts owing to such bank or to any of its majority-owned subsidiaries and transactions consisting of extensions of credit by the bank or by any of its majority-owned subsidiaries, as the commissioner may by regulation require. In issuing any such regulation, the commissioner shall give due consideration to regulations regarding such matters issued by federal bank regulatory agencies under the Securities Exchange Act of 1934. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  131. 12.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    In this section, singular words also include the plural, and plural words also include the singular.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. ) ## 12. The singular number includes the plural and the plural the singular. (Enacted by Stats. 1951, Ch. 364.)
  132. 1200.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines “offer,” “sale,” and “security” for this chapter, and excludes certain bank stock dividends from the defined terms.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1200. Unless the context otherwise requires, in this chapter: (a) “Offer” or “offer to sell” includes every attempt or offer to dispose of, or solicitation of an offer to buy, a security for value. (b) “Sale” or “sell” includes every contract of sale of, contract to sell, or disposition of, a security for value. “Sale” or “sell” includes any exchange of securities and any change in the rights, preferences, privileges, or restrictions of or on outstanding securities. (c) “Security” means any stock, capital note, or debenture, or any warrant, right, or option to subscribe to or purchase any of the foregoing. (d) The terms defined in subdivisions (a) and (b) do not include any stock dividend payable with respect to common stock of a bank solely (except for any cash or scrip paid for fractional shares) in shares of such common stock, if such bank has no other class of voting stock outstanding, provided that shares issued in any such dividend shall be subject to any conditions previously imposed by the commissioner applicable to the shares with respect to which they are issued. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  133. 12000.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    This division may be cited as the Check Sellers, Bill Payers and Proraters Law.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 12000. This division is known and may be cited as the Check Sellers, Bill Payers and Proraters Law. (Amended by Stats. 1983, Ch. 660, Sec. 1.)
  134. 12001.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The chapter’s definitions control how this division is interpreted, unless the context requires otherwise.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 12001. Unless the context otherwise requires, the definitions set forth in this chapter govern the construction of this division. (Enacted by Stats. 1951, Ch. 364.)
  135. 12002.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    A check seller is a person who, for compensation, sells checks or similar payment instruments, receives money to pay an obligor’s bills, or, in some cases, accepts money to forward for payment of utility bills.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 12002. A check seller is a person: (a) who, for compensation, engages, in whole or in part, in the business of selling checks, drafts, money orders, or other commercial paper serving the same purpose, or receiving money as agent of an obligor for the purpose of paying to a person other than the check seller bills, invoices, or accounts of such obligor, or (b) who, without direct compensation and not as an authorized agent for a utility company, accepts money for the purpose of forwarding it to others in payment of utility bills. (Amended by Stats. 1983, Ch. 660, Sec. 2.)
  136. 12002.1.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

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    A prorater is someone paid to receive money or evidence of money and distribute it among creditors to pay all or part of a debtor’s obligations.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 12002.1. A prorater is a person who, for compensation, engages in whole or in part in the business of receiving money or evidences thereof for the purpose of distributing the money or evidences thereof among creditors in payment or partial payment of the obligations of the debtor. (Amended by Stats. 1972, Ch. 999.)
  137. 12002.2.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    This section defines “business agent” for this division.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 12002.2. A business agent, for the purpose of this division is a person who engages in business as a prorater as defined in Section 12002.1 as an incident to the business of advising, counseling, or directing persons in their investments, and in the organization and management of their affairs under an exclusive contract, the primary purpose of which is not the liquidation of existing indebtedness. (Added by Stats. 1959, Ch. 1506.)
  138. 12003.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    This section defines “Commissioner” for this chapter.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 12003. “Commissioner” means the Commissioner of Financial Protection and Innovation, or any deputy, investigator, auditor, or any other person employed by the commissioner. (Amended by Stats. 2022, Ch. 452, Sec. 110. (SB 1498) Effective January 1, 2023.)
  139. 12004.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    This section defines “licensee” for this division.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 12004. “Licensee” means any individual or corporation licensed by the commissioner to engage in the business of a business agent, and any corporation licensed by the commissioner to engage in the business of selling checks, drafts or money orders, or of receiving money as agent of an obligor for the purpose of paying bills, invoices or accounts of such obligor or to accept money in payment of utility bills except as an authorized agent for a utility company pursuant to the provisions of this division. (Amended by Stats. 1983, Ch. 660, Sec. 3.)
  140. 12005.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    “Mobile unit” means a vehicle or other movable means used to sell checks, drafts, or money orders.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 1. Definitions [12000 - 12005] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 12005. “Mobile unit” means a vehicle or other movable means from which the business of selling checks, drafts, or money orders is conducted. (Amended by Stats. 1983, Ch. 660, Sec. 4.)
  141. 1201.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A state-chartered bank may not offer or sell its own securities unless the commissioner has issued a permit for that sale.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1201. No bank organized under the laws of this state shall offer or sell any security issued by it unless the commissioner has issued a permit authorizing such sale. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  142. 1202.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Several bank securities transactions are exempt from Section 1201 if the stated conditions are met.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1202. The following transactions are exempt from Section 1201: (a) (1) Any offer (but not a sale) not involving a public offering by a bank organized under the laws of this state of its securities and the execution and delivery of any agreement for the sale of the securities pursuant to the offer if no part of the consideration for the securities is paid to or received by the bank and none of the securities are issued until the sale of the securities is authorized by the commissioner or exempted from authorization. (2) For purposes of paragraph (1), an offer does not involve any public offering if the offers are not made to more than 25 persons and any agreement for the sale of the securities is not entered into with more than 10 of those 25 persons, and if all of the offerees either have a preexisting personal or business relationship with the bank or its officers, directors, or controlling persons, or by reason of their business or financial experience the offerees could be reasonably assumed to have the capacity to protect their own interests in connection with the transaction. (b) Any stock split by a bank organized under the laws of this state that is effected pursuant to an amendment to its articles, an agreement of merger, or a certificate of ownership that has been approved by the commissioner, unless this exemption is withheld by order of the commissioner. (c) Any offer or sale of securities by a bank organized under the laws of this state that is either (1) to a person actually approved by the commissioner pursuant to Section 1253 to acquire control of the bank if all of the material terms and conditions of the offer and sale of securities are disclosed in the application for approval specified in Section 1253 and the offer and sale of securities is in accordance with the terms and subject to the conditions of the approval to acquire control or (2) in a transaction exempted from the approval requirement of Section 1251 by a regulation or an order of the commissioner, unless this exemption is withheld by order of the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  143. 1203.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may set the required form and information for permit applications.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1203. An application for a permit shall be in such form and contain such information as the commissioner may prescribe. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  144. 1204.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner must charge and collect set fees for certain securities applications.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1204. The commissioner shall charge and collect fees for applications filed under this chapter as fixed in this section. (a) The fee for a negotiating permit shall be fifty dollars ($50). (b) The fee for a permit to exchange a security or to make any change in the rights, preferences, privileges, or restrictions of or on outstanding securities shall be fifty dollars ($50). (c) The fee for any permit to sell securities other than as specified in subdivision (b) shall be one hundred dollars ($100) plus one-tenth of one percent (0.1%) of the aggregate value of the securities sought to be sold, up to a maximum aggregate fee of one thousand seven hundred fifty dollars ($1,750). (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  145. 1205.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner must issue a permit for the securities sale application if the proposed sale is fair, just, and equitable; otherwise, the commissioner must deny the application.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1205. If the commissioner finds that the proposed sale of securities is fair, just, and equitable, he or she shall issue to the applicant a permit authorizing it to offer and sell the securities in such amount and upon such terms and conditions as he or she may provide in the permit. If the commissioner finds otherwise, he or she shall deny the application. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  146. 1206.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may impose conditions on permits issued under Section 1205.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1206. The commissioner may impose conditions in any permit issued under Section 1205, requiring the deposit in escrow of securities, imposing a legend condition restricting the transferability thereof, impounding the proceeds from the sale thereof, limiting the expense in connection with the sale thereof, or such other conditions as he or she deems reasonable and necessary or advisable in the public interest. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  147. 1207.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Permits issued under Section 1205 must state that they are permissive only and are not recommendations or endorsements of the securities being sold.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1207. Every permit issued pursuant to Section 1205 shall recite that it is permissive only and does not constitute a recommendation or endorsement of the securities permitted to be sold. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  148. 1208.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may amend, alter, suspend, or revoke any permit issued under Section 1205.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1208. The commissioner may amend, alter, suspend, or revoke any permit issued pursuant to Section 1205. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  149. 1209.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    When a bank applies for a permit to issue or exchange securities or related consideration, the commissioner may approve the terms and fairness of the transaction and may hold a hearing. People who are to receive the securities or consideration have a right to appear at the hearing.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1209. Whenever a bank applies for a permit to issue any security or to deliver any other consideration (whether or not such security or such transaction is exempt from, or not subject to, the provisions of Section 1202) in exchange for one or more bona fide outstanding securities (as defined in Section 25019 of the Corporations Code), claims, or property interests, or partly in such exchange and partly for cash, the commissioner is authorized to approve the terms and conditions of such issuance and exchange or such delivery and exchange and the fairness of such terms and conditions and is authorized to hold a hearing on the fairness of such terms and conditions, at which all persons to whom it is proposed to issue any security or to deliver any other consideration in such exchange shall have the right to appear. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  150. 121.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    This section defines “office” and “head office” for a licensee.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 121. (a) “Office” includes head office, branch office, and any other authorized place of business of a licensee. (b) “Head office” means the principal place of business of a licensee. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  151. 1210.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Some transactions or securities are exempt from Section 1201 if the commissioner exempts them by regulation or order.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1210. There shall be exempted from the provisions of Section 1201 any transaction or security, including, without limitation, any type or class of transactions or securities, which the commissioner by regulation or order exempts as not being comprehended within the purposes of this chapter and the regulation of which he or she finds is not necessary or appropriate in the public interest or for the protection of investors. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  152. 12100.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    This division does not apply to several listed licensed persons, agents, services, transactions, and associations.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 12100. This division does not apply to any of the following: (a) Any person, or his or her authorized agent, doing business under license and authority of the Commissioner of Financial Institutions under Division 1 (commencing with Section 99) or under any law of this state or of the United States relating to banks, trust companies, building or savings associations, industrial loan companies, personal property brokers, credit unions, title insurance companies or underwritten title companies, as defined in Section 12402 of the Insurance Code, escrow agents subject to Division 6 (commencing with Section 17000), or finance lenders subject to Division 9 (commencing with Section 22000). (b) (1) Any person licensed under Chapter 14A (commencing with Section 1851) of Division 1 or any agent of the person, when selling any traveler’s check, as defined in Section 1852, which is issued by the person. (2) Any person licensed under Division 16 (commencing with Section 33000) or any agent of the person, when selling any payment instrument, as defined in Section 33059, which is issued by the person. (c) The services of a person licensed to practice law in this state, when the person renders services in the course of his or her practice as an attorney-at-law, and the fees and disbursements of the person, whether paid by the debtor or other person, are not charges or costs and expenses regulated by or subject to the limitations of this chapter. These fees and disbursements shall not be shared, directly or indirectly, with the prorater or check seller. (d) Any transaction in which money or other property is paid to a “joint control agent” for disbursal or use in payment of the cost of labor, materials, services, permits, fees, or other items of expense incurred in construction of improvements upon real property. (e) A merchant-owned credit or creditors association, or a member-owned, member-controlled, or member-directed association whose principal function is that of servicing the community as a reporting agency. (f) Any agency or service subject to Title 2.91 (commencing with Section 1812.500) of Part 4 of Division 3 of the Civil Code, when providing services under that title. (g) Any person licensed under Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code, when acting in any capacity for which he or she is licensed under that part. (h) A common law or statutory assignment for the benefit of creditors or the operation or liquidation of property or a business enterprise under supervision of a creditor’s committee. (i) The services of a person licensed as a certified public accountant or a public accountant in this state, when the person renders services in the course of his or her practice as a certified public accountant or a public accountant, and the fees and disbursements of the person, whether paid by the debtor or other person, are not charges or costs and expenses regulated by or subject to the limitations of this chapter. These fees and disbursements shall not be shared, directly or indirectly, with the prorater or check seller. (j) Any person licensed under Chapter 14 (commencing with Section 1800) of Division 1 or any agent of the person, when selling any check or draft that is drawn by the person and is of the type described in paragraph (3) of subdivision (a) of Section 1800.5. (k) Any group of banks each of which is organized under the laws of a nation other than the United States and one or more of which are licensed by the Commissioner of Financial Institutions under Article 3 (commencing with Section 1750) of Chapter 13.5 of Division 1, or any agent of the group, when selling any foreign currency traveler’s check, as defined in Section 1852, issued by the group. Each bank that is a member of the group is jointly and severally liable to pay the foreign currency traveler’s check. (l) Any transaction of the type described in Section 1854.1. (Amended by Stats. 2006, Ch. 538, Sec. 171. Effective January 1, 2007.)
  153. 12101.5.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    A person claiming an exemption or exception from a definition must prove it in any proceeding under this law.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 12101.5. In any proceeding under this law, the burden of proving an exemption or an exception from a definition is upon the person claiming it. (Added by Stats. 1978, Ch. 778.)
  154. 12102.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    Willful violations of this division or its rules/orders can be punished by a fine, jail, or both; imprisonment for violating a rule or order requires knowledge of that rule or order.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 12102. Any person who willfully violates any provision of this division, or who willfully violates any rule or order under this division, shall, upon conviction, be fined not more than ten thousand dollars ($10,000), or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail for not more than one year, or be punished by both that fine and imprisonment, but no person may be imprisoned for the violation of any rule or order unless he or she had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority provided in Section 12400. (Amended by Stats. 2011, Ch. 15, Sec. 107. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  155. 12102.1.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    Certain licensees and similar unlicensed businesses are treated as agents and are subject to penalties under Penal Code sections 506 and 506a.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 12102.1. A licensee under this division or any person engaged in the same type of business as licensed under this division whether said person is licensed or not shall be deemed to be an agent as defined under Sections 506 and 506a of the Penal Code and subject to the penalties under said sections. (Added by Stats. 1953, Ch. 807.)
  156. 12103.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The commissioner may order an unlicensed check seller or a violator of the division to stop. If the ordered person asks for a hearing in writing within 30 days, a hearing must be held; if it does not start within 15 business days, the order is rescinded unless later consented to.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 12103. Whenever in the opinion of the commissioner any person is engaged in business as a check seller as defined in this division without a license from the commissioner, or any person or licensee is violating any provision of this division, the commissioner may order the person or licensee to desist and to refrain from engaging in such business or further violating this division. If, after an order has been served, a request for a hearing is filed in writing within 30 days of the date of service of the order by the person to whom the order was directed, a hearing shall be held in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all of the powers granted under that chapter. Unless the hearing is commenced within 15 business days after the request for a hearing is filed or the person affected consents to a later date, the order is rescinded. (Amended by Stats. 2015, Ch. 110, Sec. 1. (AB 1113) Effective January 1, 2016.)
  157. 12104.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    A qualifying nonprofit community service organization is exempt from prorater requirements, but only if it satisfies the section’s listed conditions.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 12104. A nonprofit community service organization that meets all of the following criteria shall be exempt from any requirements imposed on proraters pursuant to this division: (a) The nonprofit community service organization incorporates in this state or any other state as a nonprofit corporation and operates pursuant to either the Nonprofit Public Benefit Corporation Law, Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code or the Nonprofit Mutual Benefit Corporation Law, Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code. (b) The nonprofit community service organization limits its membership to retailers, lenders in the consumer credit field, educators, attorneys, social service organizations, employer and employee organizations, and related groups that serve educational, benevolent, fraternal, religious, charitable, social, or reformatory purposes. (c) The nonprofit community service organization has as its principal functions all of the following: (1) Consumer credit education. (2) Counseling on consumer credit problems and family budgets via in-person, telephone, and virtual communication. (3) Arranging or administering debt management plans. “Debt management plan” means a method of paying debtor’s obligations in installments on a monthly basis. (4) Arranging or administering debt settlement plans. “Debt settlement plans” means a method of paying debtor’s obligations in a negotiated amount to each creditor on a one-time basis. (d) (1) The nonprofit community service organization receives from a debtor no more than the following maximum amounts to offset the organization’s actual and necessary expenses for the services described in subdivision (c): (A) For education and counseling combined in connection with debt management or debt settlement services, a one-time sum not to exceed one hundred dollars ($100). (B) For debt management plans, a sum not to exceed 15 percent of the money disbursed monthly, or seventy-five dollars ($75) per month, whichever is less. (C) For debt settlement plans, a sum not to exceed 15 percent of the amount of the debt forgiven for negotiated debt settlement plans. (2) A nonprofit community service organization shall not require any upfront payments or deposits on debt settlement plans and may require payment of fees only once the debt has been successfully settled. (3) For purposes of this subdivision, a household shall be considered one debtor. (4) The fees allowed pursuant to this subdivision shall be the only fees that may be charged by a nonprofit community service organization for any services related to a debt management plan or a debt settlement plan. (e) The nonprofit community service organization maintains and keeps current and accurate books, records, and accounts relating to its business in accordance with generally accepted accounting principles and stores them in a readily accessible place for a period of no less than five years from the end of the fiscal year in which any transactions occurred. (f) The nonprofit community service organization deposits any money received from a debtor for the services described in subdivision (c) in a noninterest-bearing trust account in a federally insured state or federal bank, savings bank, savings and loan association, or credit union, which account is maintained specifically for purposes of administering a debt management plan or debt settlement plan. The nonprofit community service organization shall provide to the commissioner both of the following before engaging in business in this state and claiming this exemption: (1) (A) A written notice with the name, address, and telephone number of the bank, savings bank, savings and loan association, or credit union where the trust account is maintained, and the name of the account and the account number. (B) The account information required by this paragraph shall be kept confidential pursuant to the laws governing disclosure of public records, including the California Public Records Act, Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code, and the rules adopted thereunder. (2) An irrevocable written consent providing that upon the commissioner taking possession of the property and business of the nonprofit community service organization, all books, records, property, and business, including trust accounts and any other accounts holding debtors’ funds, shall be immediately turned over to the commissioner or receiver appointed pursuant to this division. The consent shall be signed by the nonprofit community service organization and the bank, savings bank, savings and loan association, or credit union where the trust account is maintained. The consent shall be binding upon the nonprofit community service organization and the bank, savings bank, savings and loan association, or credit union, and any objection to it shall be raised pursuant to the laws of the state and only in the forum in which the proceeding to take possession or appointment of the receiver has been filed. The nonprofit community service organization and the bank, savings bank, savings and loan association, or credit union shall further consent to the jurisdiction of the commissioner for the purpose of any investigation or proceeding under Sections 12105 and 12106 or any other provision of this division. The consent required by this paragraph shall include the name, title, and signature of an official of the bank, savings bank, savings and loan association, or credit union holding the authority to consent on behalf of that institution, and the name, title, and signature of the chief executive officer or president of the nonprofit community service organization. (g) (1) The nonprofit community service organization maintains at all times a surety bond in the amount of one hundred thousand dollars ($100,000) issued by an insurer licensed in this state. (2) The bond required by this subdivision shall be conditioned upon all of the following: (A) The obligor faithfully conforming to and abiding by the provisions of this section. (B) The obligor honestly and faithfully applying all funds received. (C) The obligor honestly and faithfully performing all obligations and undertakings required under this section. (D) The obligor paying to the state and to any person all money that becomes due and owing to the state or to any person owed by the obligor of the bond. (h) The nonprofit community service organization reports all of the following to the debtor at least once every three months, or upon the debtor’s request, for any debt management plan or debt settlement plan: (1) Total amount received from the debtor. (2) Total amount paid to each creditor. (3) Total amount any creditor has agreed to accept as payment in full on any debt owed by the debtor. (4) Any amount paid to the organization by the debtor. (5) Any amount held in reserve. (i) The nonprofit community service organization submits to the commissioner, at the organization’s expense, an audit report containing audited financial statements covering the calendar year or, if the organization has an established fiscal year, then for that fiscal year, within 120 days after the close of the calendar or fiscal year. (j) The nonprofit community service organization submits with the annual financial statements required under subdivision (i) a declaration that conforms to Section 2015.5 of the Code of Civil Procedure, is executed by an official authorized by the board of the organization, and that states that the organization complies with this section. The annual financial statements shall also include a separate written statement that identifies the name, address, contact person, and telephone number of the organization. (k) The nonprofit community service organization maintains accreditation by an independent accrediting organization, including either the Council on Accreditation or the International Standards Organization, with sector certification. (l) The nonprofit community service organization does not engage in any act or practice in violation of Section 17200 or 17500 of the Business and Professions Code. (m) The nonprofit community service organization inserts the following statement, in not less than 10-point type, in its debt management plan and debt settlement plan agreements: “Complaints related to this agreement may be directed to the California Department of Financial Protection and Innovation. This nonprofit community service organization has adopted best practices for debt management plans and debt settlement plans, and a copy will be provided upon request.” (n) The nonprofit community service organization adopts and implements on a continuous basis policies or procedures of best practices that are designed to prevent improper debt management or debt settlement practices and prevent theft and misappropriation of funds. Failure to do any of the following shall constitute improper debt management or debt settlement practices, as applicable: (1) Obtain and maintain counselor certification conducted by a nationally recognized third-party certification program that certifies that all of the organization’s counselors receive proper training and continuing education and are qualified to provide financial assistance prior to performing counseling services in this state. (2) Disburse funds no later than 15 days after receipt of valid funds, or by a scheduled disbursement date, whichever is the greater amount of time. (3) Transmit funds utilizing electronic payment processing when available. (4) Implement an inception date policy, which shall include an agreement that a consumer’s first disbursement pursuant to a debt management plan shall be received within 90 days of agreeing to the debt management plan service. The debt management plan shall include all items described in subdivision (h) and shall be provided to the consumer at the inception date of the plan. A description of best practices of the organization and of the consumer complaint resources shall be issued no later than the first payment date. (5) Respond to and research any complaint initiated by a consumer within five business days of receipt of the complaint. (6) Prohibit a policy requiring debt management plan consumers from being required to utilize additional ancillary services. (7) Provide consumer access to debt management plan services regardless of the consumer’s ability to pay fees related to the debt management plan, lack of creditor participation, or the amount of the consumer’s outstanding debt. (8) Implement policies that specifically prohibit credit counselors from receiving financial incentives or additional compensation based on the outcome of the counseling process. (9) Prohibit the practice of paying referral fees to consumers or other third parties that are contingent upon the enrollment of consumers by the organization. (10) Disclose in all written contracts with consumers the portion of funding for the organization that is provided by creditors. (11) Disclose in all written contracts for debt management plans or debt settlement plans that these plans are not suitable for all consumers and that consumers may request information on other options, including, but not limited to, bankruptcy. (12) Fully disclose all services to be provided by the organization and any initial and ongoing fees to be charged by the organization for services, including, but not limited to, contributions to the organization. (13) Prohibit the organization or any affiliate of the organization from purchasing debt from a consumer. (14) Prohibit the organization from offering loans to consumers involving the charging of interest. (15) Prominently disclose in written contracts with consumers of any financial arrangement between the organization and any lender or any provider of financial services if the organization receives any form of compensation for referring consumers to that lender or provider of financial services. (16) Provide professional liability insurance coverage. (17) Provide the debtor a written individualized evaluation of the debtor’s financial status and an initial debt management plan for the debtor’s debts with specific recommendations regarding actions the debtor should take. (18) (A) Provide the debtor enrolling in a debt management plan a written reliable estimate of the length of time it will take to complete the plan that identifies the total debt owed to each creditor included in the plan, the proposed payment to each creditor, and any fees that would be charged for administering the plan. (B) The estimate required by this paragraph shall be provided before receipt of the debtor’s first deposit. (o) The nonprofit community service organization provides a copy of the best practices described in subdivision (n) to its debtor, upon request. (p) The nonprofit community service organization resolves in a prompt and reasonable manner complaints from debtors relating to the organization’s debt management plans or debt settlement plans. (q) The nonprofit community service organization provides written notice to the commissioner within 30 days of dissolution or termination of engaging in the activities of a prorater, as defined in Section 12002.1. (r) This section shall become inoperative upon the enactment of a statute requiring the licensure and regulation of nonprofit community service organizations providing consumer credit counseling. (Amended by Stats. 2024, Ch. 178, Sec. 1. (SB 985) Effective January 1, 2025. Section conditionally inoperative as provided in subd. (r).)
  158. 12105.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

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    The commissioner may sue to stop violations, seek compliance, add ancillary relief in the public interest, impose administrative penalties up to $2,500 per violation, and recover civil penalties up to $10,000 for willful violations.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 12105. (a) Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this division, or any rule or order promulgated pursuant to this division, the commissioner may, at his or her discretion, bring an action in the name of the people of the State of California in the superior court to enjoin the acts or practices or to enforce compliance. Upon a proper showing, a permanent or preliminary injunction, a regaining order, or a writ of mandate shall be granted and a receiver or conservator may be appointed for the defendant’s assets. (b) If the commissioner determines it is in the public interest, the commissioner may include in any action under this division a claim for ancillary relief, including, but not limited to, a claim for restitution or disgorgement or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action, and the administrative or civil court shall have jurisdiction to award an additional relief. (c) The commissioner may, after appropriate notice and opportunity for hearing, levy administrative penalties against any person or licensee who violates any provision of this division, or rule or order promulgated pursuant to this division, in an amount not to exceed two thousand five hundred dollars ($2,500) per violation. Any hearing shall be held in accordance with the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all of the powers granted under this act. If no hearing is requested within 30 days from the date of service of the order, the order shall become final. (d) Any licensee or person who willfully violates any provision of this division, or any rule or order thereunder, shall be liable for a civil penalty not to exceed ten thousand dollars ($10,000) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the commissioner in any court of competent jurisdiction. (e) In any action brought under this division, the commissioner is entitled to receive costs, which in the discretion of the administrative or civil court shall include an amount representing reasonable attorney’s fees and any related expenses for services rendered. (Added by Stats. 2002, Ch. 779, Sec. 5. Effective January 1, 2003.)
  159. 12106.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

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    The commissioner may investigate and use subpoenas and evidence-gathering powers, and a person cannot avoid testifying or producing records by claiming self-incrimination, though perjury and contempt are still punishable.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 12106. (a) The commissioner may do the following, at his or her discretion: (1) Make public or private investigations within or outside of this state necessary to determine whether any person has violated, or is about to violate, any provision of this division or any rule or order promulgated pursuant to this division, or to aid in the enforcement of the law. (2) Make public any information concerning any violation of this division or any rule or order promulgated pursuant to this division. (b) For the purpose of any investigation or proceeding under this section, the commissioner or any officer designated by the commissioner may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records the commissioner deems relevant or material to the inquiry. (c) In case of refusal to obey a subpoena issued to a person, the superior court may upon application by the commissioner issue to the person an order requiring the person to appear before the commissioner, or an officer designated by the commissioner, and produce documentary evidence, if so ordered, or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt. (d) No person is excused from attending or testifying, or from producing any document or record, before the commissioner or in obedience of a subpoena of the commissioner, or any officer designated by the commissioner, or in any proceeding instituted by the commissioner, on the ground that the testimony or evidence required of the person may incriminate the person or subject the person to a penalty or forfeiture. However, after validly claiming the privilege against self-incrimination, no individual may be prosecuted or subjected to any penalty or forfeiture for, or on account of, any transaction, matter, or thing for which the person is compelled to testify or produce pursuant to this section, except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying. (e) The cost of any review, examination, audit, or investigation made by the commissioner under this section shall be paid to the commissioner by the person subject to the review, examination, audit, or investigation, and the commissioner may maintain an action for the recovery of these costs in any court of competent jurisdiction. In determining the cost, the commissioner may use the actual amount of the salary or other compensation paid to the persons making the review, examination, audit, or investigation plus the actual amount of expenses, including overhead reasonably incurred in the performance of the work. (Added by Stats. 2002, Ch. 779, Sec. 6. Effective January 1, 2003.)
  160. 12107.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

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    The department may cite unlicensed persons or persons/licensees violating this division or related rules and may impose an administrative penalty up to $2,500.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 12107. (a) If, upon inspection or investigation, based upon a complaint or otherwise, the department has cause to believe that a person is engaged in business without a license, or a person or licensee is violating any provision of this division or any rule or order promulgated pursuant to this division, the department may issue a citation to that person in writing describing with particularity the basis of the citation. Each citation may contain an order to desist and refrain and an assessment of an administrative penalty not to exceed two thousand five hundred dollars ($2,500). All penalties collected under this section shall be deposited in the State Corporations Fund. (b) The sanctions authorized under this section shall be separate from, and in addition to, all other administrative, civil, or criminal remedies. (c) If within 30 days from the receipt of the citation, the person cited fails to notify the department that the person intends to request a hearing as described in subdivision (d), the citation shall be deemed final. (d) Any hearing under this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (e) After the exhaustion of the review procedures provided for in this section, the department may apply to the appropriate superior court for a judgment in the amount of the administrative penalty and order compelling the cited person to comply with the order of the department. The application shall include a certified copy of the final order of the department and shall constitute a sufficient showing to warrant the issuance of the judgment and order. (Added by Stats. 2002, Ch. 779, Sec. 7. Effective January 1, 2003.)
  161. 12108.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

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    The commissioner may use the division’s remedies in any combination to enforce the division, and money collected by the commissioner in an action must be paid into the State Corporations Fund.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 2. Application of Division [12100 - 12108] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 12108. (a) The remedies available to the commissioner pursuant to this division are not exclusive and may be sought and employed in any combination deemed advisable by the commissioner to enforce the provisions of this division. (b) Any amounts collected by the commissioner in any action shall be paid into the State Corporations Fund. (Added by Stats. 2002, Ch. 779, Sec. 8. Effective January 1, 2003.)
  162. 1211.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank may issue, sell, or hypothecate capital notes or debentures with board approval, but the instruments must protect depositors and creditors first in liquidation and restrict principal payments unless the stated capital condition is met or the commissioner authorizes otherwise.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1211. A bank at any time may, with the approval of its board, issue, sell or hypothecate its capital notes or debentures which may be payable upon such terms and may bear such rate of interest, if any, as may be provided therein or which may be convertible into shares. Such capital notes and debentures shall be subordinate to the claims of creditors and depositors and it shall be provided in any such capital notes or debentures that in the event of liquidation all depositors and other creditors of the bank shall be entitled to be paid in full with such interest as may be provided by law before any payment shall be made on account of principal of or interest on such capital notes or debentures and it may be provided in any such capital notes or debentures that after payment in full of all sums owing to such depositors and creditors the holders of such capital notes or debentures shall be entitled to be paid from the remaining assets of the bank the unpaid principal amount of the capital notes or debentures plus accrued and unpaid interest thereon before any payment or other distribution, whether in cash, property or otherwise, shall be made on account of any shares of the bank. It shall be provided in such capital notes or debentures that no payment shall at any time be made on account of the principal thereof, unless following such payment the aggregate of the shareholders’ equity and capital notes or debentures thereafter outstanding shall be the equal of such aggregate at the date of the original issue of such capital notes or debentures, or as may be otherwise authorized by the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  163. 1212.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. )

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    This section says Chapter 6 does not affect the Corporate Securities Law of 1968, Division 1 of Title 4 of the Corporations Code.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 6. Securities [1200 - 1212] ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1212. Nothing contained in this chapter shall affect the Corporate Securities Law of 1968, Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  164. 12200.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    A person must get a commissioner’s license before selling certain payment instruments, acting as a bill-paying agent or prorater, or forwarding utility-bill payments in the covered way.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12200. No person shall engage in the business, for compensation, of selling checks, drafts, money orders, or other commercial paper serving the same purpose, or of receiving money as agent of an obligor for the purpose of paying bills, invoices, or accounts of such obligor, or acting as a prorater, nor shall any person, without direct compensation and not as an authorized agent for a utility company, accept money for the purpose of forwarding it to others in payment of utility bills, without first obtaining a license from the commissioner. (Amended by Stats. 1983, Ch. 660, Sec. 8.)
  165. 12200.2.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    A license as a business agent or special prorater may be issued to an individual.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12200.2. A license as a business agent or special prorater may be issued to an individual. (Added by Stats. 1959, Ch. 367.)
  166. 12200.5.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    The commissioner must classify and license proraters license applicants based on the nature of their business and the level of public-interest regulation required.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12200.5. The commissioner shall classify and license applicants for a proraters license in accordance with the nature of their existing or proposed business and the extent of regulation required thereby in the public interest as follows: (a) A special proraters license shall be issued to a qualified applicant to engage in business as a business agent. (b) A general proraters license shall be issued to all other qualified applicants. Whenever the term “prorater” is used in this division with reference to a licensee it shall be deemed to mean a general prorater unless otherwise provided. (Added by Stats. 1957, Ch. 498.)
  167. 12201.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    A license application must be in writing, under oath, and include required applicant details; the commissioner may set when electronic records or signatures are accepted.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12201. (a) An application for a license shall be in writing, under oath, and in a form prescribed by the commissioner and shall contain the name, and the address both of the residence and place of business, of the applicant and if the applicant is a partnership or association, of every member thereof, and if a corporation, of every officer and director thereof. (b) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section does not require the commissioner to accept electronic records or electronic signatures. (c) For purposes of this section, the following terms have the following meanings: (1) “Electronic record” means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. “Electronic record” also includes, but is not limited to, all of the following: (A) An application, amendment, supplement, and exhibit, filed for any license, consent, or other authority. (B) A financial statement, report, or advertising. (C) An order, license, consent, or other authority. (D) A notice of public hearing, accusation, and statement of issues in connection with any application, license, consent, or other authority. (E) A proposed decision of a hearing officer and a decision of the commissioner. (F) The transcripts of a hearing. (G) A release, newsletter, interpretive opinion, determination, or specific ruling. (H) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (G), inclusive. (2) “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record. (d) The Legislature finds and declares that the Department of Financial Protection and Innovation has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal. (Amended by Stats. 2022, Ch. 452, Sec. 113. (SB 1498) Effective January 1, 2023.)
  168. 12202.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    If a business will be operated at a specific address or addresses, those address(es) must be included in the application.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12202. If the business is to be conducted at a specific address or addresses, the address or addresses at which the business is to be conducted shall be included in the application. (Enacted by Stats. 1951, Ch. 364.)
  169. 12203.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    If the business will be run from a mobile unit, the application must include the unit’s California registration number or other identification and the area where the applicant plans to operate it.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12203. If the business is to be conducted from a mobile unit, the California state registration number or other identification of such mobile unit and the area in which the applicant proposes to operate such mobile unit shall be included in the application. (Enacted by Stats. 1951, Ch. 364.)
  170. 12204.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    A license application must state the type of business and include any other information the commissioner may reasonably require.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12204. The application shall specify the type of business for which a license is requested and shall also contain such other information as the commissioner may reasonably require. (Amended by Stats. 1953, Ch. 807.)
  171. 12205.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    Licensed bill payers, proraters, and check sellers must maintain specified capital, assets, liquid assets, and surety bonds; the commissioner may define liquid assets and increase check-seller requirements in some cases.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12205. (a) A licensed bill payer, general prorater, or special prorater who does not qualify to make use of agencies in the conduct of its business at all times shall maintain a surety bond in an amount as required by subdivision (a) of Section 12206 and assets of at least ten thousand dollars ($10,000) in excess of its liabilities, of which assets at least five thousand dollars ($5,000) shall be liquid assets. A licensed bill payer, general prorater, or special prorater is qualified to make use of agencies in the conduct of its business if at all times it shall have capital of at least one hundred thousand dollars ($100,000) and maintain a surety bond in an amount as required by subdivision (a) of Section 12206 and assets, excluding goodwill and other intangible assets, of at least one hundred thousand dollars ($100,000) in excess of its liabilities, of which assets at least twenty-five thousand dollars ($25,000) shall be liquid assets. (b) A licensed check seller, whether or not qualified to make use of agencies in the conduct of its business, shall at all times have capital of at least five hundred thousand dollars ($500,000) and maintain a surety bond in an amount as required by subdivision (b) of Section 12206 and assets, excluding goodwill and other intangible assets, of at least five hundred thousand dollars ($500,000) in excess of its liabilities, of which assets at least one hundred fifty thousand dollars ($150,000) are liquid assets. In the alternative, a licensed check seller may satisfy the assets and surety bond requirements of this subdivision by assets, excluding goodwill and other intangible assets, of at least one million dollars ($1,000,000) in excess of liabilities, of which assets at least one hundred fifty thousand dollars ($150,000) are liquid assets, and a surety bond, approved by the commissioner, in an amount of one hundred thousand dollars ($100,000). (c) The commissioner may determine by rule or order what assets are liquid assets within the meaning of this section and may determine by specific ruling that a particular asset is or is not a liquid asset within the meaning of this section. (d) The commissioner may by order increase the net asset and liquid asset requirements of subdivision (b) for any licensed check seller when, as a result of any examination or report under Section 12307.3, it appears to the commissioner that it is necessary for the safety and soundness of that licensed check seller. (Amended by Stats. 1992, Ch. 869, Sec. 3. Effective January 1, 1993.)
  172. 12206.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    Applicants in two kinds of businesses must file a commissioner-approved surety bond with their license application, in set minimum amounts.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12206. (a) If the applicant is to engage in the business of receiving money for the purpose of paying bills, invoices or accounts of an obligor, the applicant shall file with the commissioner concurrently with its application for a license, a surety bond to be approved by the commissioner, in which the applicant is the principal, in the minimum amount of twenty-five thousand dollars ($25,000). A deposit given instead of the bond required by this section shall not be deemed an asset of the applicant or licensee for the purpose of complying with Section 12205. (b) If the applicant is to engage in the business of check selling, the applicant shall file with the commissioner concurrently with its application for a license, a surety bond to be approved by the commissioner, in which the applicant is the principal, in the minimum amount of five hundred thousand dollars ($500,000). A deposit given instead of the bond required by this section shall not be deemed an asset of the applicant or licensee for the purpose of complying with Section 12205. (Amended by Stats. 1992, Ch. 869, Sec. 4. Effective January 1, 1993.)
  173. 12207.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The commissioner must approve the bond.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12207. The bond shall be approved by the commissioner. The bond shall run to the state for the use of the state and of any person who has a cause of action against the principal under the provisions of this division. (Amended by Stats. 1982, Ch. 517, Sec. 212.)
  174. 12208.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    A bond must require the obligor to follow the division and the commissioner’s rules, handle received funds honestly, perform all duties honestly, and pay money owed to the State or other persons.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12208. The bond shall be conditioned that the obligor will faithfully conform to and abide by the provisions of this division and of all rules and regulations made by the commissioner pursuant to this division, and will honestly and faithfully apply all funds received and will faithfully and honestly perform all obligations and undertakings under this division, and will pay to the State and to any person all money that becomes due and owing to the State or to such person from the obligor under the provisions of this division. The surety under such bond may pay the full amount of its liability thereunder to a receiver appointed by a superior court pursuant to Section 12307.2 of this code in lieu of payment to the State or persons having a cause of action against the obligor of the bond, and upon such payment the surety is completely released from further liability under such bond. (Amended by Stats. 1957, Ch. 186.)
  175. 12209.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The bond stays in force until the commissioner releases the surety from liability or the surety cancels the bond.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12209. The bond shall remain in force and effect until the surety is released from liability by the commissioner, or until the bond is canceled by the surety. (Enacted by Stats. 1951, Ch. 364.)
  176. 12212.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    A person may not bring an action on the bond after two years from the act or default complained of.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12212. No action may be brought on the bond by any person after the expiration of two years from the time when the act or default complained of occurred. (Enacted by Stats. 1951, Ch. 364.)
  177. 12213.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    A licensee must file a new bond after a bond action is recovered, and the commissioner may require a new bond when an action is commenced on the bond.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12213. When an action is commenced on the bond of a licensee the commissioner may require the filing of a new bond, and immediately upon the recovery of any action on the bond the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification that a bond is required, constitutes sufficient grounds for the suspension or revocation of a license. (Enacted by Stats. 1951, Ch. 364.)
  178. 12214.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    Applicants must pay filing fees, licensees must pay annual assessments, and the commissioner can charge penalties or suspend/revoke certificates for nonpayment.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12214. (a) An applicant at the time of filing an application for a license under this division shall pay to the commissioner the sum of fifty dollars ($50) as a fee for investigating the application and two hundred dollars ($200) as an application fee. The investigation fee and application fee are not refundable if an application is denied or withdrawn. (b) (1) Each licensee shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of this division as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the programs in the year in which such assessment is made. The pro rata share shall be the proportion which a licensee’s gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner. The pro rata share shall not include the costs of any examinations provided for in Section 12306, unless they cannot be collected from the licensee examined. (2) On or before the 30th day of May in each year, the commissioner shall notify each licensee by mail of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld. (3) In the levying and collection of the assessment, a licensee shall not be assessed for nor be permitted to pay less than one hundred fifty dollars ($150) per year. (4) If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to such licensee. If, after such an order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension or surrender of a certificate shall not affect the powers of the commissioner as provided in this division. (Amended by Stats. 1980, Ch. 497, Sec. 2.)
  179. 12216.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The commissioner must review certain license applications and, if the applicant meets the division’s requirements and no denial grounds exist, issue and deliver a license.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12216. (a) Upon the filing of the application and the payment of the fees and the approval of the bond, the commissioner shall investigate and examine the following: (1) The background and experience of the applicant and of the partners or members thereof if the applicant is a partnership or association, and of the officers and directors thereof if the applicant is a corporation, and of any organizers, incorporators, managers, or stockholders. (2) The plan of business of the applicant. The plan of business should include, but not be limited to: (A) a feasibility and market study; (B) pro forma financial statements, including all underlying assumptions; (C) a description of the geographical area to be served by agents; (D) a description of the accounting system to be used; (E) a description of the internal control procedures for the operations of the proposed business, and for its agents; and (F) plans for future expansion of business operations. (3) Any other factors and circumstances bearing on the applicant or any proposed facility that in the opinion of the commissioner may be relevant. (b) If the commissioner determines that the applicant has satisfied the provisions of this division and does not find facts constituting reasons for denial as specified in Section 12221, the commissioner shall issue and deliver a license to the applicant to engage in business in accordance with the provisions of this division. (Amended by Stats. 1992, Ch. 869, Sec. 5. Effective January 1, 1993.)
  180. 12217.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    Each license must state the licensee’s name, business address, and the type of business licensed.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12217. Each license shall state the following: (a) The name of the licensee, and if the licensee is a partnership or association the names of the members, or if the licensee is a corporation the date and place of its incorporation. (b) The address at which such business is to be conducted. (c) The type of business licensed. (Amended by Stats. 1953, Ch. 642.)
  181. 12218.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The licensee must keep the license conspicuously posted at the principal place of business.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12218. The license shall be kept conspicuously posted in the principal place of business of the licensee. (Amended by Stats. 1955, Ch. 339.)
  182. 12219.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The license cannot be transferred or assigned.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12219. The license is not transferable or assignable. (Enacted by Stats. 1951, Ch. 364.)
  183. 12220.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    The commissioner may require licensees to file updated information about changes in their application details.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12220. The commissioner may by regulation require licensees to file at such times as he may specify such information as the commissioner may reasonably require regarding any changes in the information provided in any application filed pursuant to this division. (Repealed and added by Stats. 1968, Ch. 869.)
  184. 12221.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    The commissioner may deny a license application after reasonable notice and an opportunity to be heard if any listed ground applies.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12221. Upon reasonable notice and opportunity to be heard, the commissioner may deny the application for the license for any of the following reasons: (a) A false statement of a material fact has been made in the application for license. (b) Any officer, director, or member of the applicant has, within the last 10 years, been (1) convicted of or pleaded nolo contendere to a crime, or (2) committed any act involving dishonesty, fraud, or deceit, which crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with the provisions of this division. (c) The applicant, any officer, director, general partner, or member of the applicant, or any person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of the State of California or a foreign jurisdiction. (d) The applicant has not complied with all the applicable provisions of this division. (e) The proposed officers and directors do not have sufficient check selling, bill paying, prorating, or other experience to afford reasonable promise of successful operation. (f) The plan of business does not demonstrate that the proposed business will have a reasonable chance for a successful operation. (g) The proposed business is being formed for a purpose other than the legitimate objectives contemplated by this division. (h) The proposed capital structure is inadequate. (Amended by Stats. 2003, Ch. 473, Sec. 15. Effective January 1, 2004.)
  185. 12223.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

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    The commissioner may require a licensee to get an adequate fidelity bond for certain people with access to the licensee’s funds, if the commissioner thinks it is needed to protect the public.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12223. The commissioner may require a licensee, in addition to the bond provided in Section 12206, to obtain an adequate fidelity bond for each officer, employee, agent, or any person having access to funds collected by or for the licensee or having authority to draw against such funds if in the commissioner’s opinion such a bond is necessary for the protection of the public. The bond shall be for the protection of the public against loss suffered through embezzlement by any person having access to funds collected by or for the licensee or having authority to draw against such funds, or from mysterious disappearance, theft, holdup or burglary. A deposit given instead of the bond required by this section shall not be deemed an asset of the licensee for the purpose of complying with Section 12205. (Amended by Stats. 1982, Ch. 517, Sec. 215.)
  186. 12225.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The commissioner may issue a duplicate license or replacement certificate if the original was lost, stolen, or destroyed, or if the licensee surrenders a certificate for replacement and pays a $2 fee.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 3. Licensing [12200 - 12225] ( Chapter 3 enacted by Stats. 1951, Ch. 364. ) ## 12225. The commissioner may issue a duplicate of a license that has been lost, stolen, or destroyed, or for a certificate which the licensee desires to replace, upon satisfactory proof of such loss, theft, or destruction, or upon surrender of a certificate for replacement and the payment of a fee of two dollars ($2). (Added by Stats. 1955, Ch. 339.)
  187. 123.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    This section says the terms “real property” and “personal property” are defined by the Civil Code.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 1. Definitions [99 - 217] ( Chapter 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 123. “Real property” and “personal property” have the meanings defined in and shall be construed in accordance with Title 1 (commencing with Section 654) of Part 1 of Division 2 of the Civil Code. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  188. 12300.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    The commissioner may issue general rules, regulations, rulings, demands, and findings to enforce this division.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12300. The commissioner may make general rules and regulations and specific rulings, demands, and findings for the enforcement of this division. (Enacted by Stats. 1951, Ch. 364.)
  189. 12300.1.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    Licensees must take reasonable precautions to protect checks, drafts, and money orders from theft or alteration, and to guard against burglary or holdup.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12300.1. Licensees shall observe reasonable precautions against theft or alteration of checks, drafts or money orders, and against burglary or holdup. (Added by Stats. 1963, Ch. 1817.)
  190. 12300.2.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    A person running a check seller business must use their true name, unless they have complied with the referenced Chapter 5 provisions.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12300.2. Every person engaging in the business of a check seller shall conduct the business under his or her true name unless he or she has complied with Chapter 5 (commencing with Section 17900) of Part 3 of Division 7 of the Business and Professions Code. (Amended by Stats. 1983, Ch. 660, Sec. 9.)
  191. 12300.3.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    Licensees must treat certain customer payments as trust funds, keep them in a named trust account, avoid commingling, and maintain enough funds to cover outstanding obligations.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12300.3. All funds received by a licensee or its agents from the sale of checks, drafts, money orders, or other commercial paper serving the same purpose and for the purpose of paying bills, invoices, or accounts of an obligor, equal in amount to the face value of such instruments or equal to the amount to be paid, shall constitute trust funds owned by and belonging to the person from whom they were received or a licensee who has paid the checks, drafts, money orders or other commercial paper serving the same purpose, for which the funds of such persons have been received by the agent but not transmitted to such licensee or deposited in the trust account of such licensee. If a licensee or an agent of a licensee shall commingle such funds with those of his own, all assets of such agent shall be impressed with a trust in favor of said purchaser or the licensee in an amount equal to the aggregate funds received or which should have been received by the agent from such sale. Such trust shall continue until an amount equal to said funds is separated from those of the agent and transmitted to the licensee or deposited in the trust account of licensee. An amount equal to all such trust funds shall be deposited in a bank or banks in an account or accounts in the name of the licensee designated “trust account,” or by some other appropriate name indicating that the funds are not the funds of the licensee or of its officers, employees, or agents. Such funds, or, in the event of commingling of such funds by licensee or its agent with those of the licensee or its agent, an amount of funds of such licensee or of its agent equal thereto, shall constitute trust funds as herein provided and shall not be subject to attachment, levy of execution or sequestration by order of court except by a payee, or bona fide assignee, or bona fide holder in due course of a check, draft, or money order sold by a licensee, or except by an obligor for whom a licensee is acting as an agent in paying bills. Funds in said account, together with funds and checks on hand and in the hands of agents held for the account of the licensee, at all times shall be at least equal to the aggregate liablity of the licensee on account of checks sold and bills, invoices, and accounts accepted for payment. Upon request of the commissioner, a licensee shall furnish to the commissioner an authorization for examination of financial records of any such trust fund account, maintained in a financial institution, in accordance with the procedures set forth in Section 7473 of the Government Code. Nothing in this law shall be construed to prevent a purchaser, a holder in due course, the payee of a check, draft or money order sold by the licensee in the usual course of his business, or an obligor for whom the licensee is acting as an agent in paying bills of the obligor, from taking any legal action necessary to enforce any claims which said purchaser, holder in due course, payee, or obligor may desire to take including the right to levy attachment or execution. In the event a license under this law shall be suspended or terminated the licensee shall immediately deposit in said trust account an amount which with funds therein contained shall be equal to the outstanding checks sold and bills unpaid. (Amended by Stats. 1976, Ch. 1320.)
  192. 12300.4.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    Agents must separate customer funds and send or deposit them to the licensee’s trust account on time, with a tighter next-business-day rule for larger multi-location operations. The commissioner may allow longer periods for small weekly amounts, and a licensee must end an agency and report it if the agent misuses or fails to remit funds.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12300.4. Prior to such separation and transmittal to the licensee or deposit by its agent such funds received by said agent may be used by said agent for the sole purpose only of the making of change or cashing of checks in the normal course of its business. All such funds received by said agent to the date of deposit or transmittal as required below or an amount equal to such funds must be separated from those of the agent and transmitted to, or deposited in the trust account of, the licensee not less than every third business day. If an agent owns or operates, either directly or indirectly, more than two locations for the sale of checks, drafts, money orders, or other commercial paper serving the same purpose and/or for the receipt of money for the purpose of paying bills, invoices or accounts of an obligor, and handles trust funds in any three-day period equal to or in excess of securities to be deposited as provided in Section 12223, said agent shall transmit to, or deposit in the trust account of, the licensee directly from each such location of such agent such funds not later than the end of the next business day following receipt; such funds to be in form of cash or checks cashed in the normal course of business only. Where the total amount of such funds held by an agent does not exceed one thousand dollars ($1,000) in a calendar week, the commissioner may, in his discretion, by written order permit the agent to transmit or deposit such funds in periods in excess of 3 days but not more than 10 days. If, after reasonable notice from licensee, an agent shall fail to transmit or deposit the funds, or an amount equal thereto, or to report to the licensee, as herein provided without just cause, or if an agent shall use any of such funds, directly or indirectly, for any purpose other than is permitted herein, licensee shall immediately terminate such agency and within five (5) days thereafter notify the commissioner in writing of the reason for such termination, setting forth the name and address of the agency location. No agent so terminated shall be permitted to become an agent of the licensee or any other licensee except as provided in Section 12301.4 of the Financial Code. (Added by Stats. 1963, Ch. 1817.)
  193. 12300.5.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    A licensee must separate funds received, deposit them into a trust account by the end of the next business day, and keep those funds in that account for only the stated payment purposes unless Section 12300.6 says otherwise.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12300.5. An amount equal to all such funds received by a licensee shall be separated from the funds of the licensee and deposited in its trust account not later than the end of the next business day following receipt by such licensee. All such funds shall thereafter remain in such trust account and may be used for no purpose other than paying bills of said persons, or paying checks, drafts, money orders, or other commercial paper sold by the licensee except as otherwise provided in Section 12300.6. (Added by Stats. 1963, Ch. 1817.)
  194. 12300.6.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    A licensee may use the funds only for making change or cashing checks, subject to bond limits and whether the funds are separated and deposited.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12300.6. Prior to separation and deposit by the licensee such funds may only be used by the licensee for the making of change or the cashing of checks in the normal course of its business, and then only to the extent of the amount of the bond which has been filed under Section 12206. After separation and deposit such funds also may be used by a licensee for the cashing of checks in the normal course of its business, and then only to the extent of the amount of the bond which has been filed with the commissioner containing the provisions and conditions set forth in Sections 12207 through 12213, inclusive, of this code. (Added by Stats. 1963, Ch. 1817.)
  195. 12301.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    A licensee may open branch offices or agencies if it meets Section 12205 qualifications and accepts responsibility for certain workers’ acts; each branch or agency must display a sign saying it is part of the licensee.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12301. A licensee may establish branch offices or agencies if it is qualified under the provisions of Section 12205 and if it expressly assumes responsibility for the acts of any person selling checks, drafts, or money orders for the licensee or accepting money in its name or on its behalf at such place of business. There shall be posted in a prominent place in each branch office or agency a sign stating that the place of business is a branch office or agency of the licensee. The licensee is responsible for the acts of any person selling checks, drafts, or money orders or accepting money in its name or on its behalf. (Amended by Stats. 1983, Ch. 660, Sec. 10.)
  196. 12301.1.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    A licensee must notify the commissioner in writing within 10 days after starting a mobile unit, branch office, or agency location, and must provide specified location and identification details. The licensee must also inform the commissioner within 5 days after any such location is terminated.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12301.1. A licensee within 10 days after establishing a mobile unit, a branch office or agency location shall notify the commissioner in writing and shall furnish the commissioner with the name and address of each such branch office or agency location and the California state registration number or other identification of the mobile unit and the area in which it proposes to operate such mobile unit and such other information as the commissioner may require so that he may be continuously advised of every location at which checks, drafts, or money orders of the licensee are being sold or issued. Within five days after the termination of a mobile unit, a branch office or agency location a licensee shall inform the commissioner of the name and address of the branch office or agency location terminated and the California state registration number or other identification of the mobile unit terminated, together with a statement of the reasons for the termination. (Amended by Stats. 1963, Ch. 1817.)
  197. 12301.2.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    If a licensee sells a check, draft, or money order, it must be drawn on the licensee’s account at a bank authorized to do business in California.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12301.2. A check, draft, or money order sold by a licensee shall be drawn on an account of a licensee maintained at a bank authorized to do business in the State of California. (Added by Stats. 1953, Ch. 632.)
  198. 12301.3.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    A licensee may not let an officer, employee, or agent sell a check, draft, or money order unless the required signature is on file with the bank or the licensee has filed written authorization with the bank and commissioner; stop-payment items are excepted.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12301.3. A licensee shall not permit any officer, employee, or agent to sell any check, draft, or money order unless the signature of the person signing the same is on file with the bank on which the check, draft, or money order is drawn or the licensee shall have filed with the bank and the commissioner written authorization to said bank to pay any checks, drafts, or money orders presented for payment on a form of the licensee as described in the authorization except as to items as to which licensee has filed a stop payment notice with said bank. (Added by Stats. 1953, Ch. 632.)
  199. 12301.4.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    A licensee must terminate and cancel an agency immediately if the commissioner instructs it to do so or if specified problems are established. Re-establishment of a canceled agency needs the commissioner’s written consent. If a hearing is requested, the commissioner must hold it within 10 days, and must vacate the notice if the violations were only technical or did not occur.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12301.4. A licensee shall terminate and cancel any agency immediately upon instruction from the commissioner and when it has been established (a) that the agent has refused to permit the examination of its books, accounts, records, and files; (b) that an examination has revealed a shortage in its accounts relating to the sale of checks; (c) that the agent after specific instruction to do so has failed to remit to the licensee or deposit in its trust account within the time specified in Section 12300.4 funds received from the sale of checks, drafts, money orders, or other commercial paper serving the same purpose or funds received for the purpose of paying bills, invoices, or accounts of an obligor; (d) that the agency has violated any provision of this chapter. No agency terminated and canceled by a licensee pursuant to or for the reasons set forth in this section shall be re-established by said licensee or established by any other licensee until after the written consent of the commissioner is given to the establishment or re-establishment of such agency. If the licensee or the agent requests a hearing with respect to such termination, the commissioner shall thereupon hold a hearing within 10 days after receiving such request. If the commissioner finds that the violations were purely technical and do not substantially affect the agent’s ability to perform his duties as such agent, or if the commissioner finds that such violations did not occur, the commissioner shall issue an order vacating his said notice to the licensee. (Added by Stats. 1963, Ch. 1817.)
  200. 12301.5.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

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    An agent of a licensee must not issue certain checks, drafts, money orders, or similar paper drawn on the licensee’s trust account unless the principal amount is received at the same time.

    ## Financial Code - FIN ## DIVISION 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS [12000 - 12404] ( Heading of Division 3 amended by Stats. 1992, Ch. 869, Sec. 1. ) ## CHAPTER 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12301.5. No agent of a licensee shall issue or cause to be issued any check, draft, or money order, or other commercial paper serving the same purpose which is drawn upon the trust account of a licensee without concurrently receiving in full, in cash, or by check, draft, or money order from a third party believed to be valid, the principal amount thereof. (Added by Stats. 1963, Ch. 1817.)

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