Financial Code — Part 2 | FIN — United States — California law | Esheria

Financial Code

Part 2 of 17 · provisions 201–400

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. 12302.

    ## 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 give the commissioner written notice before changing the business address or, for a mobile unit, the place or area 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 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12302. Whenever a licensee desires to change his place of business to a street address other than that designated in his license or desires to change the place or area of doing business in the case of a mobile unit, he shall give written notice to the commissioner of the desired change. (Amended by Stats. 1953, Ch. 807.)
  2. 12303.

    ## 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 keep business records in good accounting form, keep them current at their main office, preserve them for at least four years, and make them available to the commissioner on demand during business hours.

    ## 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. ) ## 12303. Every licensee shall keep and use in his business books, accounts and records in accordance with good accounting practice and which will enable the commissioner to determine whether such licensee has violated the provisions of this division or the rules and regulations made by the commissioner. Every licensee shall preserve such books, accounts and records for at least four years after making the final entry on each transaction recorded therein. Such books, accounts and records shall be kept current, shall be maintained at the main office of the licensee and shall be available for inspection by the commissioner on demand during regular business hours. Nothing in this section shall be construed to require any licensee to keep an individual record of each individual fee charged in each transaction but the licensee shall be required to keep a record of the total charges made for any accounting period. (Amended by Stats. 1955, Ch. 339.)
  3. 12304.

    ## 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 file audited financial reports and related information with the commissioner on set deadlines, and the commissioner can require additional reports, reject filings, extend deadlines, and exempt some filings.

    ## 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. ) ## 12304. (a) Each licensee, except a special prorater, shall submit to the commissioner, at such licensee’s own expense, an audit report containing audited financial statements covering the calendar year or, if such licensee has an established fiscal year, then for such fiscal year, within 105 days after the close of each such calendar or fiscal year. At such time, each licensee shall also file such additional relevant information as the commissioner may require. (b) Within 30 days after receipt of a request from the commissioner, a licensee or other person subject to this division shall submit to the commissioner, at such person’s own expense, an audit report containing audited financial statements covering the 12 calendar months next preceding the month of receipt of the request, or such other period as the commissioner may require. Unless the public interest shall otherwise require, the commissioner shall exempt a licensee from the provisions of subdivision (a) hereof, in whole or in part, if such licensee has complied with a request pursuant to this subdivision (b) for financial statements as of a date within the calendar or fiscal year for which such exemption is granted. (c) A licensee whose license has been surrendered or revoked shall submit to the commissioner, at its own expense, on or before 105 days after the effective date of such surrender or revocation, a closing audit report containing audited financial statements as of such effective date for the 12 months ending with such effective date, or for such other period as the commissioner may specify. Such report shall include the information required by subdivision (a) of this section and other relevant information specified by the commissioner. A licensee who has complied with this subdivision is exempted from subdivision (a) hereof. (d) The reports and financial statements referred to in subdivisions (a), (b), and (c) of this section shall include at least a balance sheet and a statement of income for the year ended on the balance sheet date together with such other relevant information as the commissioner may require, and shall be prepared in accordance with generally accepted accounting principles and shall be accompanied by a report, certificate or opinion of an independent certified public accountant or independent public accountant. The audits shall be conducted in accordance with generally accepted auditing standards and the rules and regulations of the commissioner. (e) A licensee shall make other special reports to the commissioner as the commissioner may from time to time require. (f) For good cause and upon written request, the commissioner may extend the time for compliance with subdivisions (a), (b) and (c) of this section. (g) A licensee shall, when requested by the commissioner, for good cause, submit its unaudited financial statement, prepared in accordance with generally accepted accounting principles and consisting of at least a balance sheet and statement of income as of the date and for the period specified by the commissioner. The commissioner may require the submission of such reports on a monthly or other periodic basis. (h) If the report, certificate or opinion of the independent accountant referred to in subdivision (d) hereof is in any way qualified, the commissioner may require the licensee to take such action as he deems appropriate to permit an independent accountant to remove such qualification from the report, certificate or opinion. (i) The commissioner may reject any financial statement, report, certificate or opinion filed pursuant to this section by notifying the licensee or other person required to make such filing of its rejection and the cause thereof. Within 30 days after the receipt of such notice, the licensee or other person shall correct such deficiency, and the failure so to do shall be deemed a violation of this division. The commissioner shall retain a copy of all filings so rejected. (j) The commissioner may make rules and regulations specifying the form and content of the reports and financial statements referred to in this section, and may require that such reports and financial statements be verified by the licensee in such manner as he may prescribe. (Amended by Stats. 1969, Ch. 223.)
  4. 12305.

    ## 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 investigate businesses and examine related books and records to discover violations of 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. ) ## 12305. For the purpose of discovering violations of this division the commissioner may at any time investigate the business and examine the books, accounts, records, and files used therein, of any licensee, of any agent, and of any person who the commissioner has reason to believe is engaging in the business defined in this division. (Amended by Stats. 1963, Ch. 1817.)
  5. 12306.

    ## 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, or another person examined under this division, must pay the commissioner the cost of the examination.

    ## 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. ) ## 12306. The cost of every examination of a licensee or other person subject to this division shall be paid to the commissioner by the licensee or person examined, and the commissioner may maintain an action for the recovery of these costs in any court of competent jurisdiction. In determining the cost of an 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. For the purposes of this section only, no person other than a licensee shall be deemed to be a person subject to this division unless and until the person is determined to be a person subject to this division by an administrative hearing in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code or by a judicial hearing in any court of competent jurisdiction. (Amended by Stats. 1981, Ch. 946, Sec. 1.)
  6. 12307.

    ## 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 require witnesses to attend and may examine people under oath in connection with an examination or investigation.

    ## 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. ) ## 12307. The commissioner may require the attendance of witnesses and examine under oath all persons whose testimony he requires relative to any examination or investigation. (Enacted by Stats. 1951, Ch. 364.)
  7. 12307.1.

    ## 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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    The commissioner may bring and pursue actions to stop violations of this division or related commissioner orders or decisions, and to enforce civil penalties under 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. ) ## 12307.1. The commissioner may commence and prosecute actions and proceedings to enjoin violations of this division or violations of orders or decisions of the commissioner rendered pursuant to this division, and for the enforcement of any and all civil penalties provided for by this division. (Added by Stats. 1953, Ch. 1031.)
  8. 12307.2.

    ## 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 the commissioner finds a licensee insolvent or operating unsafely, the commissioner may order it to stop disbursing funds and stop doing 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 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12307.2. If the commissioner finds as a result of an examination or report that a licensee is insolvent or has been insolvent or is conducting or has conducted business in such an unsafe or injurious manner as to render its further operations hazardous to the public, the commissioner may forthwith by an order addressed to and served on the licensee by registered mail and on any other person having funds of the licensee or its customers in their possession, direct discontinuance of the disbursement of such funds and the further conduct of business by the licensee. The order shall be conditioned to remain in effect unless the commissioner fails to hold a hearing within 15 days after receipt of a written request by the licensee, until set aside by the commissioner in whole or in part, until the licensee is the subject of an order for relief in bankruptcy, or pursuant to a petition filed by the commissioner or other interested person a receiver has been appointed by a court of competent jurisdiction. (Amended by Stats. 2022, Ch. 188, Sec. 8. (AB 2433) Effective January 1, 2023.)
  9. 12307.3.

    ## 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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    The commissioner may take over a licensee’s property and business if certain problems are found, and may keep possession until the business resumes or is finally liquidated.

    ## 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. ) ## 12307.3. Whenever as a result of an examination or report it appears to the commissioner that: (a) The capital of any licensee is impaired; (b) Any licensee is conducting its business in such an unsafe or injurious manner as to render its further operations hazardous to the public; (c) Any licensee has suspended payment of its trust obligations; (d) Any licensee has refused to submit its books, papers, and affairs to the inspection of an examiner of the Division of Corporations; (e) Any officer of any licensee refuses to be examined under oath touching the concerns of such licensee; (f) Any licensee neglects or refuses to comply with any order of the commissioner made pursuant to this division unless the enforcement of such order is restrained in a proceeding brought by such licensee; the commissioner may forthwith take possession of the property and business of such licensee and retain possession until such licensee resumes business or its affairs be finally liquidated as herein provided. Such licensee, with the consent of the commissioner, may resume business upon such terms as he may prescribe. (Added by Stats. 1963, Ch. 1817.)
  10. 12307.4.

    ## 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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    If the commissioner has taken over a licensee’s property and business, the commissioner may ask the superior court to appoint a receiver to liquidate the licensee’s affairs.

    ## 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. ) ## 12307.4. Whenever the commissioner has taken possession of the property and business of a licensee the commissioner may petition the superior court for the appointment of a receiver to liquidate the affairs of the licensee. During the time that the commissioner retains possession of the property and business of a licensee the commissioner shall have the same powers and authority with reference to the licensee as are vested in the Commissioner of Financial Institutions with respect to banks pursuant to Chapter 17 (commencing with Section 3100) of Division 1 and the licensee shall likewise have the same rights to hearings and judicial review as are granted to banks. While in possession of the property and business of a check seller, a receiver shall have the same powers and authority as are vested in the Commissioner of Financial Institutions while in possession of the property and business of a bank. (Amended by Stats. 2000, Ch. 1015, Sec. 50. Effective September 30, 2000.)
  11. 12307.5.

    ## 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 can be disciplined in California if it has been disciplined elsewhere for conduct substantially related to the regulated activity.

    ## 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. ) ## 12307.5. (a) For any licensee, a disciplinary action taken by the State of California, another state, an agency of the federal government, or another country for an action substantially related to the activity regulated under this division may be grounds for disciplinary action by the commissioner. A certified copy of the record of the disciplinary action taken against the licensee by the State of California, other state, agency of the federal government, or other country shall be conclusive evidence of the events related therein. (b) Nothing in this section shall preclude the commissioner from applying a specific statutory provision in this division providing for discipline against a licensee as a result of disciplinary action taken against a licensee by the State of California, another state, an agency of the federal government, or another country. (Added by Stats. 2003, Ch. 473, Sec. 16. Effective January 1, 2004.)
  12. 12309.

    ## 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 post fee schedules and required notices, and they may not charge more than the posted fees.

    ## 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. ) ## 12309. (a) A schedule of the fees charged by a licensee shall be posted in a conspicuous place in the place of business of the licensee and its agents. A licensee and its agents shall not charge fees in excess of the posted fees. (b) Each licensee and its agents shall prominently post on the premises of each office of the licensee and on the premises of each agent, a notice clearly stating that checks or money orders issued by the licensee or its agents are not insured by the federal government, the state government, or any other public or private entity. This notice shall be printed in English and in the same language principally used by the licensee or any agent of the licensee to advertise, solicit, or negotiate, either orally or in writing, with respect to the purchase of checks or money orders. The information required in this notice shall be clear, legible, and in letters not less than one-half inch in height. The notice shall be posted in a conspicuous location in the unobstructed view of the public within the premises. In those locations operated by an agent of the licensee, the agent, and not the licensee, shall be responsible for the failure to properly post the required notice. (Amended by Stats. 1992, Ch. 869, Sec. 8. Effective January 1, 1993.)
  13. 12310.

    ## 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 sell checks payable to bearer, to cash, or to the purchaser. A licensee may sell an unnamed-payee check only if it does not exceed $150.

    ## 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. ) ## 12310. A licensee under this division shall not sell checks payable to bearer, to cash, or to the purchaser, but a licensee may sell a check in which the name of the payee is not designated in any way if the check does not exceed one hundred fifty dollars ($150) in amount. (Amended by Stats. 1955, Ch. 774.)
  14. 12311.

    ## 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 not publish or share false, misleading, deceptive, or materially incomplete statements, or claims about supervision by California or its officials. The commissioner may order a licensee to stop violating conduct.

    ## 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. ) ## 12311. No licensee shall advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast, in any manner whatsoever, any statement or representation which is false, misleading, or deceptive, or which omits to state material information, or which refers to the supervision of such licensee by the State of California or any department or official thereof. The commissioner may order any licensee to desist from any conduct which he shall find to be a violation of the foregoing provisions. (Added by Stats. 1951, Ch. 257.)
  15. 12312.

    ## 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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    Agency agreements for these licensed check-selling businesses must be in writing, and the licensee cannot pay an agent any compensation for becoming an agent except what the written agreement specifies.

    ## 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. ) ## 12312. An agreement between one licensed to engage in the business of selling checks, drafts, money orders, or other commercial paper serving the same purpose, and one undertaking to act in that business as an agent of the licensee, shall be in writing. Such a licensee shall not pay such an agent any compensation as consideration for becoming an agent, other than that specified in their written agency agreement, in any manner, directly or indirectly, or by any method, practice or device whatsoever. The commissioner may order any licensee to desist from any conduct which the commissioner shall find to be a violation of the foregoing provisions of this section. (Amended by Stats. 1983, Ch. 660, Sec. 11.)
  16. 12313.5.

    ## 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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    This section says the chapter does not authorize examining, inspecting, or auditing a client’s books and records while they are with a business agent unless the client expressly consents.

    ## 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. ) ## 12313.5. Nothing in this chapter shall be construed as authorizing the examination, inspection or auditing of the books and records of any client of a business agent while such books and records are in the possession of the business agent without the express consent of the client. (Added by Stats. 1957, Ch. 498.)
  17. 12314.

    ## 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 prorater’s charges are capped, certain recurring-payment fees are allowed up to stated limits, an origination fee may be charged only in specified circumstances, the origination fee must be refunded if the debtor stays current for 12 months, and at least 70% of funds received must be paid to creditors each month.

    ## 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. ) ## 12314. The total charges received by a prorater, or any other person for the prorater’s services, may not exceed in the aggregate twelve percent (12%) for the first three thousand dollars ($3,000), eleven percent (11%) for the next two thousand dollars ($2,000), and ten percent (10%) for any of the remaining payments distributed by a prorater to the creditors of a debtor, except for payments made on recurrent obligations. Recurring obligations shall be defined for the purpose of this section as follows: current rent payments, current utility payments, current telephone bills, current alimony payments, current monthly insurance premium payments, and payments made on obligations which are secured by a first mortgage or first deed of trust on real property. (a) Notwithstanding the provisions of Section 12315, upon compliance with the provisions of Sections 12315.1, and 12320, an origination fee of a sum not to exceed fifty dollars ($50) may be charged; (b) A fee not to exceed four dollars ($4) per disbursement on recurring obligations, consisting of current rent payments or obligations which are secured by a first mortgage or first trust deed on real property, may be charged. (c) A fee not to exceed one dollar ($1) on other recurring obligations. When a debtor has not canceled or defaulted on the performance of his contract with the prorater within 12 months after execution of the prorate contract, the prorater shall refund any origination fee charged to the debtor. At least once each month the prorater shall pay not less than 70 percent of all funds received from the debtor to the creditors of the debtor. (Amended by Stats. 1972, Ch. 999.)
  18. 12314.1.

    ## 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 cancellation fee or termination penalty may not be charged to a debtor.

    ## 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. ) ## 12314.1. A cancellation fee or termination penalty may not be charged to a debtor. (Added by Stats. 1972, Ch. 999.)
  19. 12315.

    ## 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 prorater must not receive any fee unless the required creditor consent threshold is met.

    ## 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. ) ## 12315. A prorater shall not receive any fee unless he has the consent of at least 51 percent of the total amount of indebtedness and of the number of creditors listed in the prorater’s contract with the debtor, or such like number of creditors have accepted a distribution of payment. (Added by Stats. 1957, Ch. 498.)
  20. 12315.1.

    ## 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 prorater must give written notice to listed creditors within five days after the contract’s effective date, and the notice must state the proposed monthly payment. The prorater-debtor contract must also list each debt to be prorated, the creditor’s name, and the total of those debts.

    ## 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. ) ## 12315.1. A prorater shall notify, in writing, all creditors listed in the prorate contract of the debtors desire to engage the services of the prorater within five days of the effective date of the contract as defined in Section 12320. The notification shall include a notice as to the proposed monthly payment to be made to the creditor. Every contract between a prorater and a debtor shall list every debt to be prorated with the creditor’s name, and disclose the total of all such debts. (Added by Stats. 1972, Ch. 999.)
  21. 12316.

    ## 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. )

    Verify source ↗

    If a prorater charges more than the maximum allowed, and it is not due to an accidental and bona fide error, the prorater must void the debtor contract and return all charges received from the debtor.

    ## 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. ) ## 12316. If a prorater contracts for, receives or makes any charge in excess of the maximum permitted by this division, except as the result of an accidental and bona fide error, the prorater’s contract with the debtor shall be void and the prorater shall return to the debtor all charges received from the debtor. (Added by Stats. 1957, Ch. 498.)
  22. 12317.

    ## 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. )

    Verify source ↗

    A prorater must not purchase a debtor’s obligation from a creditor.

    ## 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. ) ## 12317. A prorater shall not purchase from a creditor any obligation of a debtor. (Added by Stats. 1957, Ch. 498.)
  23. 12318.

    ## 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. )

    Verify source ↗

    A prorater must not take certain signed instruments or security items, including blank contracts, negotiable instruments for charges, and judgment-related authorizations.

    ## 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. ) ## 12318. A prorater shall not take: (a) Any contract, promise to pay, or other instrument which has any blank spaces when signed by a debtor; (b) Any negotiable instrument for the prorater’s charges; (c) Any note, wage assignment, real estate or chattel mortgage, or other security to secure the prorater’s charges; (d) Any confession of judgment or power of attorney to confess judgment against the debtor or to appear for the debtor in a judicial proceeding. (e) Concurrent with the signing of the contract or as part of the contract or as part of the application for the contract a release of any obligation to be performed on the part of the prorater. (Added by Stats. 1957, Ch. 498.)
  24. 12319.

    ## 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. )

    Verify source ↗

    Contracts between a prorater and a debtor must include specified disclosures about debts, payments, charges, installments, and the parties’ names and addresses.

    ## 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. ) ## 12319. Every contract between a prorater and a debtor shall: (a) List every debt to be prorated with the creditor’s name and disclose the total of all such debts; (b) Provide payments reasonably within the ability of the debtor to pay in precise terms; (c) Disclose in precise terms the rate and amount of the prorater’s charge; (d) Disclose the approximate number and amount of installments required to pay the debts in full; (e) Disclose the name and address of the prorater and of the debtor; (f) Contain such other provision or disclosures as the commissioner shall determine is necessary for the protection of the debtor and the proper conduct of business by a prorater. (Added by Stats. 1957, Ch. 498.)
  25. 12320.

    ## 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. )

    Verify source ↗

    A prorater must give the debtor a copy of any contract or agreement immediately after the debtor signs it, and the prorater must sign the debtor’s copy.

    ## 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. ) ## 12320. A prorater shall deliver a copy of any contract or agreement between the prorater and a debtor to the debtor immediately after the debtor executes it, and the debtor’s copy shall be executed by the prorater. A contract shall not be effective until a debtor has made a payment to the prorater for distribution to his creditors. (Added by Stats. 1957, Ch. 498.)
  26. 12321.

    ## 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. )

    Verify source ↗

    A prorater must give a debtor a receipt for each payment, unless the payment was made by check or money 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 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12321. Unless paid by check or money order a prorater shall deliver a receipt to a debtor for each payment within five (5) days after receipt of a payment. (Added by Stats. 1957, Ch. 498.)
  27. 12322.

    ## 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. )

    Verify source ↗

    A prorater must give the debtor an accounting at least every six months and also within seven days after a written demand.

    ## 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. ) ## 12322. At least once in each six (6) months, the prorater shall render an accounting to the debtor which shall itemize the total amount received from the debtor, the total amount paid to each creditor, the total amount which any creditor has agreed to accept as payment in full on any debt owed him by the debtor, the amount of charges deducted, and any amount held in reserve. A prorater shall in addition render such an account to a debtor within seven days after written demand. (Added by Stats. 1957, Ch. 498.)
  28. 12323.

    ## 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. )

    Verify source ↗

    A prorater must not lend money or credit.

    ## 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. ) ## 12323. A prorater shall not lend money or credit. (Added by Stats. 1957, Ch. 498.)
  29. 12324.

    ## 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. )

    Verify source ↗

    A prorater must not pay referral compensation or accept compensation from anyone other than the debtor for prorater activities.

    ## 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. ) ## 12324. A prorater shall not: (a) Offer, pay, or give any cash, fee, gift, bonus, premium, reward, or other compensation to any person for referring any prospective customer to the prorater; (b) Receive any cash, fee, gift, bonus, premium, reward, or other compensation from any person other than the debtor in connection with his activities as a prorater. (Added by Stats. 1957, Ch. 498.)
  30. 12325.

    ## 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. )

    Verify source ↗

    A prorater must not pressure or require a debtor to buy or agree to buy any insurance policy.

    ## 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. ) ## 12325. A prorater shall not solicit or require a debtor to purchase or agree to purchase any policy of insurance. (Added by Stats. 1957, Ch. 498.)
  31. 12326.

    ## 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. )

    Verify source ↗

    A special prorater may not advertise or hold themselves out as a general prorater unless they have a valid, unrevoked general proraters 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 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12326. A special prorater shall not advertise in any manner or otherwise hold himself out to the public as a general prorater or as qualified to do business as a general prorater unless he holds a valid unrevoked general proraters license. (Added by Stats. 1957, Ch. 498.)
  32. 12327.

    ## 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. )

    Verify source ↗

    Proraters, and their owners, managers, or employees in prorating transactions, must not do things that count as practicing 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 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12327. Nothing in this division shall be deemed to authorize the performance, directly or indirectly, of an act or acts constituting the practice of law by a prorater, business agent, check seller, or by any person, firm, corporation or organization described, or engaging in a transaction specified in subdivision (a), (b), (d), (e), (f), (g), or (h) of Section 12100. Without limiting the generality of the foregoing and other applicable laws, the following act or acts, when done by the owner, manager or employee of a prorater, in connection with a prorating transaction, shall be deemed to constitute the unlawful practice of law: (a) Preparation, advising or signing of a release of attachment or garnishment, stipulation, affidavit for exemption, compromise agreement or other legal or court document; (b) The furnishing of legal advice or performance of legal services of any kind. No prorater (including an owner, manager or employee of a prorater) shall (1) represent that he or she is authorized or competent to furnish legal advice or perform legal services; (2) assume authority on behalf of creditors or a debtor or accept a power of attorney authorizing it to employ or terminate the services of an attorney or to arrange the terms of or compensate for such services; (3) communicate with the debtor or creditor or any other person in the name of an attorney or upon the stationery of an attorney or prepare any form or instrument which only attorneys are authorized to prepare. (Amended by Stats. 1983, Ch. 660, Sec. 12.)
  33. 12328.

    ## 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 collection agency cannot be kept in the same premises as a prorating organization unless that prorating organization is exempt.

    ## 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. ) ## 12328. (a) No collection agency may be maintained in the same premises as a prorating organization unless such prorating organization is exempt under the provisions of this division. (b) No prorater’s license shall be issued to a collection agency. (Added by Stats. 1957, Ch. 498.)
  34. 12329.

    ## 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. )

    Verify source ↗

    A prorater must not disclose a debtor’s creditor list to any individual or firm for the purpose of soliciting accounts.

    ## 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. ) ## 12329. It shall be unlawful for any prorater to disclose the list of creditors of a debtor to any individual or firm for the purpose of soliciting the accounts and such disclosure shall be ground for revocation of license. (Added by Stats. 1957, Ch. 498.)
  35. 12330.

    ## 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. )

    Verify source ↗

    The commissioner may make rules for the form and wording of advertising used by proraters.

    ## 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. ) ## 12330. The commissioner shall have power and authority to promulgate rules and regulations governing the form and wording of advertising to be used by proraters. The issuance, distribution or placement of any advertising by a prorater which is in conflict with such rules and regulations shall be ground for the revocation of its license. (Added by Stats. 1957, Ch. 498.)
  36. 12331.

    ## 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. )

    Verify source ↗

    Each prorater corporation must have at least one person with five years’ experience in consumer credit extension or credit collection activity, and at least one qualified person must be on duty at each open business location.

    ## 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. ) ## 12331. Within the organization of each prorater corporation, either as an owner, officer, or employee, there shall be one or more persons possessing a minimum of five years experience in consumer credit extension or credit collection activity. At least one such qualified person shall be stationed on duty at each business location during the time the location is open for business. (Repealed and added by Stats. 1972, Ch. 1285.)
  37. 12332.

    ## 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. )

    Verify source ↗

    It is unlawful for any person to knowingly tamper with records or make an untrue statement to the commissioner under the stated 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 4. Licensee Regulations [12300 - 12332] ( Chapter 4 enacted by Stats. 1951, Ch. 364. ) ## 12332. (a) It is unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division. (b) It is unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination, with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division. (Added by Stats. 2007, Ch. 101, Sec. 15. Effective January 1, 2008.)
  38. 12400.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The commissioner may suspend or revoke a license after giving a reasonable opportunity to be heard if specified violations or conditions are found.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. ) ## 12400. The commissioner may, upon reasonable opportunity to be heard, suspend or revoke any license issued pursuant to this division, if he finds that: (a) The licensee has failed to report within 10 days the establishment of a mobile unit, branch office, or agency location, or has failed upon demand of the commissioner pursuant to Section 12301.4 of this code to terminate and cancel any agency. (b) The licensee has violated any provision of this division or any rule or regulation made by the commissioner under and with the authority of this division. (c) Any fact or condition exists which, if it had existed at the time of the original application for such license, reasonably would have warranted the commissioner in refusing originally to issue such license. (Amended by Stats. 1968, Ch. 869.)
  39. 12401.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The commissioner may suspend any license for up to 30 days after three days’ notice and a hearing, while an investigation is pending.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. ) ## 12401. The commissioner may upon three days’ notice and a hearing, suspend any license for a period not exceeding 30 days, pending investigation. (Enacted by Stats. 1951, Ch. 364.)
  40. 12401.1.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. )

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    The commissioner may summarily suspend or revoke a license if the licensee does not pay the required license fee within 10 days after notice. If a written hearing request is filed and the hearing is not held within 60 days, the order is rescinded.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. ) ## 12401.1. The commissioner may by order summarily suspend or revoke the license of a licensee who fails to pay the license fee prescribed by Section 12214 within 10 days after notice by the commissioner that such fee is due and payable. If, after such an order is made, a request for hearing is filed in writing and hearing is not held within 60 days thereafter, the order is rescinded as of its effective date. (Amended by Stats. 1972, Ch. 644.)
  41. 12402.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    Hearings under this division must follow the referenced Government Code chapter, unless this division sets a shorter time for setting the hearing; the commissioner has all powers granted there.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. ) ## 12402. Except where a shorter time for setting the hearing is prescribed in this division, all hearings under this division shall be conducted in accordance with Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code and in all cases the commissioner shall have all the powers granted therein. (Enacted by Stats. 1951, Ch. 364.)
  42. 12403.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The commissioner’s orders, decisions, licenses, and other official acts may be reviewed under the 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. ) ## 12403. Every order, decision, license, or other official act of the commissioner is subject to review in accordance with law. (Enacted by Stats. 1951, Ch. 364.)
  43. 12404.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. )

    Verify source ↗

    The commissioner may censure, suspend, or bar certain persons or organizations, and a person notified of a proposed order can request a hearing within 15 days.

    ## 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 5. Revocation of Licenses [12400 - 12404] ( Chapter 5 enacted by Stats. 1951, Ch. 364. ) ## 12404. (a) The commissioner may, after appropriate notice and opportunity for hearing, by order, censure or suspend for a period not exceeding 12 months, or bar from any position of employment, management, or control any licensee, any nonprofit community service organization subject to Section 12104, or any other person, if the commissioner finds either of the following: (1) That the censure, suspension, or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, which violation was either known or should have been known by the person committing or causing it or has caused material damage to the licensee, nonprofit community service organization, or to the public. (2) That the person has been convicted of or pleaded nolo contendere to any crime, or has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense involving dishonesty, fraud, or deceit, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the business in accordance with the provisions of this division. (b) Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Division 3 of Title 2 of the Government Code). Upon receipt of a request, the matter shall be set for hearing to commence within 30 days after such receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of such notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing. (c) Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure or exempt from licensure under Section 12104 of the law. (d) Persons suspended or barred under this section are prohibited from participating in any business activity of a licensee or a person exempt from licensure under Section 12104 and from engaging in any business activity on the premises where a licensee or a person exempt from licensure under Section 12104 is conducting business. (Added by Stats. 2007, Ch. 101, Sec. 16. Effective January 1, 2008.)
  44. 125.

    ## 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 “Commissioner” and “department” for this 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. ) ## 125. “Commissioner” means the Commissioner of Financial Protection and Innovation and “department” means the Department of Financial Protection and Innovation. (Amended by Stats. 2022, Ch. 452, Sec. 97. (SB 1498) Effective January 1, 2023.)
  45. 1250.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines key terms for the chapter on acquisition of control of banks, including “bank,” “control,” “controlling person,” “person,” and “shareholder.”

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1250. Unless the context otherwise requires, in this chapter: (a) “Bank” means a bank organized under the laws of this state. (b) “Control” means possession, direct or indirect, of the power: (1) To vote 25 percent or more of any class of the voting securities issued by a person; or (2) To direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract (other than a commercial contract for goods or nonmanagement services), or otherwise; provided, however, that no individual shall be deemed to control a person solely on account of being a director, officer, or employee of such person. For purposes of paragraph (2) of this subdivision, a person who, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10 percent or more of the then outstanding voting securities issued by another person is presumed to control such other person. For purposes of this chapter, the commissioner may determine whether a person in fact controls another person. (c) “Controlling person” means a person who, directly or indirectly, controls a bank. (d) “Person” means an individual, a corporation, an association, a syndicate, a partnership, a limited liability company, a business trust, an estate, a trust, or an organization of any kind, or any combination of any of the foregoing acting in concert. (e) “Shareholder” means: (1) In the case of a corporation, a holder of a share of any class or series. (2) In the case of a nonprofit or charitable corporation, an unincorporated association, or a syndicate, a member. (3) In the case of a partnership, a partner. (4) In the case of a business trust, an estate, or a trust, a holder of a beneficial interest. (5) In the case of an organization of any other kind, a holder of an ownership interest. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  46. 1251.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A person may not acquire control of a bank or related control person, or take certain steps toward doing so, unless the commissioner has approved the acquisition of control.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1251. No person shall, directly or indirectly, unless the commissioner has approved such acquisition of control, do any of the following: (a) Make a tender offer for, a request or invitation for tenders of, or an offer to exchange securities for, any voting security or any security convertible into a voting security of a bank or a controlling person if the person making such tender offer, request or invitation for tenders, or offer to exchange securities would, by consummation thereof, directly or indirectly, acquire control of such bank or such controlling person. (b) Solicit approval of any shareholder of a controlling person for a merger, consolidation, sale of assets, or other transaction by which any person other than such controlling person would acquire control of the bank controlled by such controlling person. (c) Acquire control of a bank or a controlling person; provided, however, that nothing in this subdivision shall be deemed to prohibit any person from negotiating to acquire (but not acquiring) control of a bank or a controlling person. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  47. 1252.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A person generally may not acquire control of an industrial bank, directly or indirectly, unless a stated exception applies.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1252. Notwithstanding any other provision of this chapter, except for those persons approved by the commissioner prior to September 1, 2002, and for those persons who control industrial banks as of September 1, 2002, no person may directly or indirectly, including through any merger, consolidation, or any other type of business combination, acquire control of an industrial bank, as defined in Section 111, unless the person is engaged only in the activities permitted for financial holding companies, as provided in Section 103 of the federal Gramm-Leach-Bliley Act (12 U.S.C. Sec. 1843(k)(1)), or is a credit union, as defined in Section 165, when the industrial bank is a credit union service organization, as defined in Section 14651. Nothing in this section shall be construed to exempt a person seeking to acquire control of a bank that otherwise qualifies to do so pursuant to this section, from the requirements of Sections 1250 to 1263, inclusive. For the purposes of this section, the term “control” has the same meaning as in subdivision (b) of Section 1250. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  48. 1253.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    An applicant to acquire control of a bank or controlling person must file an application in the form and with the information the commissioner requires, and must pay the applicable fee.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1253. An application for approval to acquire control of a bank or a controlling person shall be in such form and contain such information as the commissioner may require by regulation or order and shall be accompanied by the following fee: (a) In case the applicant has been a director or officer of the bank for not less than two years (or, if the bank has been in business for less than two years, for such lesser period), a fee of five hundred dollars ($500); and (b) In any other case, a fee of one thousand five hundred dollars ($1,500). (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  49. 1254.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner must deny an acquisition-of-control application if any listed factor is true, and must approve it if none of the factors is true.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1254. If the commissioner finds, with respect to the proposed acquisition of control of a bank or a controlling person, that any of the factors set forth in subdivisions (a) to (g), inclusive, is true, he or she shall deny the application. If the commissioner finds that none of such factors is true, he or she shall approve the application. (a) That the proposed acquisition of control would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of this state; (b) That the effect of the proposed acquisition of control in any section of the state may be substantially to lessen competition or to tend to create a monopoly or that the proposed acquisition of control would in any other manner be in restraint of trade, and that the anticompetitive effects of the proposed acquisition of control are not clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served; (c) That the financial condition of any acquiring person is such as might jeopardize the financial stability of the bank or the controlling person, or prejudice the interests of the depositors, creditors, or shareholders of the bank or the controlling person; (d) That plans or proposals to liquidate the bank or the controlling person, to sell the assets of the bank or the controlling person, to merge or consolidate the bank or the controlling person, or to make any other major change in the business, corporation structure or management of the bank or the controlling person are not fair and reasonable to the depositors, creditors, and shareholders of the bank or the controlling person; (e) That the competence, experience, or integrity of any acquiring person indicates that it would not be in the interest of the depositors, creditors, or shareholders of the bank or the controlling person or in the interest of the public to permit such person to control the bank or the controlling person; (f) That the proposed acquisition is unfair, unjust, or inequitable to the bank or the controlling person or to the depositors, creditors, or shareholders of the bank or the controlling person; or (g) That the applicant neglects, fails, or refuses to furnish to the commissioner all the information required by the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  50. 1255.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may find that certain fraud- or dishonesty-related convictions make an acquiring person unsuitable to control a bank, or make a proposed management change unfair.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1255. (a) For purposes of Section 1254, the commissioner may find: (1) That the integrity of an acquiring person indicates that it would not be in the interest of the depositors, creditors, or shareholders of a bank or controlling person or in the interest of the public to permit the acquiring person to control the bank or controlling person if the acquiring person or any director or officer of the acquiring person has been convicted of, or has pleaded nolo contendere to, any crime involving fraud or dishonesty. (2) That a plan to make a major change in the management of a bank or controlling person is not fair and reasonable to the depositors, creditors, or shareholders of the bank or controlling person if the plan provides for a person who has been convicted of, or has pleaded nolo contendere to, any crime involving fraud or dishonesty to become a director or officer of the bank or controlling person. (b) Subdivision (a) shall not be deemed to be the only grounds upon which the commissioner may find, for purposes of Section 1254, that the integrity of an acquiring person indicates that it would not be in the interest of the depositors, creditors, or shareholders of a bank or controlling person or in the interest of the public to permit the acquiring person to control the bank or controlling person or that a plan to make a major change in the management of a bank or controlling person is not fair and reasonable to the depositors, creditors, or shareholders of the bank or controlling person. (Amended by Stats. 2013, Ch. 334, Sec. 35. (SB 537) Effective January 1, 2014.)
  51. 1256.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may approve a control-acquisition proposal for a bank or controlling person and 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 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1256. The commissioner may, in approving a proposal to acquire control of a bank or a controlling person pursuant to Section 1254, impose such conditions as the commissioner deems reasonable or necessary or advisable in the public interest. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  52. 1257.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may, for good cause, amend, alter, suspend, or revoke an approval related to a proposal to acquire control of a bank or controlling person.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1257. The commissioner may, for good cause, amend, alter, suspend, or revoke any approval of a proposal to acquire control of a bank or a controlling person issued pursuant to Section 1254. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  53. 1258.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    An application to acquire control of a bank or controlling person is treated as approved if the commissioner does not deny or approve it within 60 days after filing, unless the applicant agrees to extend the period.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1258. Notwithstanding any other provision of this chapter, any application for approval to acquire control of a bank or a controlling person which is not denied or approved by the commissioner within a period of 60 days after such application is filed with the commissioner or, if the applicant consents to an extension of the period within which the commissioner may act, within such extended period, shall be deemed to be approved by the commissioner as of the first day after such period of 60 days or such extended period, as the case may be. For purposes of this section, an application for approval to acquire control of a bank or a controlling person is deemed to be filed with the commissioner at the time when the complete application, including any amendments or supplements, containing all the information in the form required by the commissioner, is received by him or her. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  54. 1259.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may hold a hearing before deciding control issues or approving or denying an acquisition-of-control application, and must hold a hearing if a prejudiced person requests one in writing.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1259. (a) The commissioner, before determining whether, for purposes of this chapter, a person controls another person or before denying or approving an application for approval to acquire control of a bank or controlling person, may hold a hearing. (b) After determining whether, for purposes of this chapter, a person controls another person or after denying or approving an application for approval to acquire control of a bank or controlling person, the commissioner, upon the filing of a written request for a hearing by any person prejudiced by the commissioner’s decision, shall hold a hearing and upon such hearing shall affirm, modify, or reverse his or her decision. Any such hearing shall commence within a period of 30 days after the written request for the hearing is filed with the commissioner or, if the person filing the written request for the hearing consents to an extension of the period within which the hearing is to commence, within such extended period. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  55. 1260.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Some transactions may be exempted from Section 1251 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 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1260. There shall be exempted from the provisions of Section 1251 any transaction, including, without limitation, any type or class of transactions, which the commissioner by regulation or order exempts as not being comprehended within the purposes of this chapter and the regulation of which the commissioner finds is not necessary or appropriate in the public interest or for the protection of a bank, a controlling person, or the depositors, creditors, or shareholders of a bank or a controlling person. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  56. 1261.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If the commissioner believes someone has violated or is about to violate this chapter or related orders or regulations, the commissioner may ask the superior court for an injunction and other equitable relief.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1261. Whenever it appears to the commissioner that any person has committed or is about to commit a violation of any provision of this chapter or of any regulation or order of the commissioner issued pursuant to this chapter, the commissioner may apply to the superior court for an order enjoining such person from violating or continuing to violate this chapter or any such regulation or order and for other equitable relief as the nature of the case or the interests of the bank, the controlling person, the depositors, creditors, or shareholders of such bank or such controlling person, or the public may require. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  57. 1262.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A person may not vote or give written consent on a security acquired in violation of this chapter or related commissioner orders for three years after the acquisition.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1262. No person shall be entitled to vote or to give a written consent with respect to any security acquired in contravention of any provision of this chapter or of any regulation or order of the commissioner issued pursuant to this chapter for a period of three years after such acquisition. If a security of a bank or a controlling person is acquired in contravention of this chapter or any such regulation or order, such bank, such controlling person, any shareholder of such bank or such controlling person, or the commissioner may apply to the superior court for equitable relief, including costs and (except with respect to the commissioner) attorney fees, to enjoin prospectively any person from voting or giving any written consent with respect to such security for a period of three years after such acquisition, and the commissioner may apply to the superior court for equitable relief, including costs, to void any voting or any giving of a written consent with respect to such security which has occurred since such acquisition. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  58. 1263.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If part of this chapter is invalid, illegal, or unenforceable, the rest still stands if it can work without the flawed part.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 7. Acquisition of Control [1250 - 1263] ( Chapter 7 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1263. If any provision or clause of this chapter or the application thereof to any person or circumstance is held invalid, illegal, or unenforceable, such invalidity, illegality, or unenforceability shall not affect other provisions or applications of this article which can be given effect without the invalid, illegal, or unenforceable provision or application, and to this end, the provisions of this chapter are declared to be severable. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  59. 127.

    ## 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 “person” to include a broad list of individuals, business forms, government entities, and similar organizations.

    ## 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. ) ## 127. “Person” means an individual, sole proprietorship, partnership, joint venture, association, trust, estate, business trust, corporation, joint stock company, limited liability company, unincorporated association, sovereign government or agency, instrumentality, or political subdivision thereof, or any similar entity or organization. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  60. 1280.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines when a person or company is a bank holding company, mainly by ownership, control, or voting power over a bank, and excludes certain trust companies.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1280. “Bank holding company” means: (a) Any person or company which: (1) Directly or indirectly owns, controls, or holds with power to vote, 10 percent or more of the outstanding stock of any domestic bank, or 10 percent or more of the outstanding stock of any domestic bank together with 10 percent or more of the shares or proxy of shares of any national bank located in California. (2) Controls in any manner whether by the holding of proxy, or otherwise, the election of a majority of the directors of any domestic bank, or of both any domestic bank and any national bank located in California. (3) The commissioner determines, after reasonable notice and opportunity for hearing, directly or indirectly exercises, or has power to exercise, a controlling influence over the management and policies of any domestic bank, or of both any domestic bank and any national bank located in California. (b) Any company which controls in any manner any company which is or becomes a bank holding company by virtue of this chapter. (c) Bank holding company does not include a trust company controlled by or under common control with a title insurance company. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  61. 1281.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    “Company” is defined to include a wide range of domestic or foreign business entities and similar organizations, whether incorporated or not.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1281. “Company” means any domestic or foreign corporation, voting trust, business trust, limited partnership, partnership fund, joint stock company, association, syndicate, organized group of persons, or similar organization or group, whether incorporated or not. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  62. 1282.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines when a company counts as a “subsidiary” of a specified bank holding company.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1282. “Subsidiaries,” with respect to a specified bank holding company, means: (a) Any company 10 percent or more of whose voting securities are directly or indirectly owned or controlled by such bank holding company; (b) Any company a majority of whose directors are controlled in any manner by such holding company; (c) Any company 10 percent or more of whose voting securities are held by trustees or nontrustees for the benefit of the stockholders, shareholders, or members of such holding company; or (d) Any company 10 percent or more of the legal or beneficial ownership of which is directly or indirectly owned or controlled by such holding company. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  63. 1283.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The commissioner may require reports from bank holding companies and their subsidiaries.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1283. The commissioner may from time to time require, under oath or otherwise, reports from any bank holding company and its subsidiaries in such form and as to such matters as the commissioner may deem necessary and appropriate, and which are relevant to the jurisdiction and responsibilities of the commissioner under this division. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  64. 1284.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Bank holding companies and their subsidiaries are subject to examination by the commissioner.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1284. Each bank holding company and its subsidiaries shall be subject to examination by the commissioner. The commissioner may use, for this purpose, his or her own examiners or independent public accountants who are disinterested persons. In lieu of making an examination, the commissioner may accept the examination of any holding company made by any federal agency, any other agency of this state, or any agency of any other state of the United States and may examine any such holding company in conjunction with these agencies. If the commissioner examines a bank holding company or any of its subsidiaries, other than a domestic bank, using the commissioner’s own examiners, the bank holding company shall pay, within 10 days after receipt of a statement from the commissioner, a fee of two hundred dollars ($200) per day for each examiner engaged in the examination plus, in the event it is necessary for any examiner engaged in the examination to travel outside this state, the travel expenses of the examiner. If the commissioner examines a bank holding company or any of its subsidiaries, other than a domestic bank, using independent public accountants, the bank holding company shall pay, within 10 days after receipt of a statement from the commissioner, the fee of the independent public accountants. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  65. 1285.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. )

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    For certain trust companies linked to a title insurance company, the commissioner must work with the Insurance Commissioner to adopt reasonable rules for inspections and examinations.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1285. With respect to a trust company controlled by or under common control with a title insurance company, the commissioner in cooperation with the Insurance Commissioner shall adopt reasonable rules and regulations for the conduct of the inspection and examination authorized by Sections 1282 and 1284. Any such examination or inspection shall be conducted pursuant to the provisions of Article 4.7 (commencing with Section 1215) of Chapter 2 of Part 2 of Division 1 of the Insurance Code. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  66. 1286.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. )

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    The commissioner is not authorized by this chapter to require reports from a national bank or to examine a national bank contrary to federal law.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1286. Nothing in this chapter shall be construed to authorize the commissioner to require reports from a national bank or to examine a national bank contrary to federal law. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  67. 1287.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Certain bank holding companies and qualifying subsidiaries are exempt from California’s constitutional interest-rate restrictions for specified obligations, loans, and forbearances.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 8. Bank Holding Companies [1280 - 1287] ( Chapter 8 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1287. Pursuant to the authority contained in Section 1 of Article XV of the California Constitution, the restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution shall not apply to any obligations of, loans made or arranged by, or forbearances of or arranged by, a bank holding company or a subsidiary of a bank holding company which is not a bank. As used in this section, the terms “bank holding company” and “subsidiary” mean a bank holding company or subsidiary as defined in Chapter 17 (commencing with Section 1841) of Title 12 of the United States Code. This section creates and authorizes an exempt class of persons pursuant to Section 1 of Article XV of the Constitution. This section does not exempt a bank holding company or a subsidiary of a bank holding company from complying with all other applicable provisions of law regulating the business of these companies. This section does not exempt a bank holding company or a subsidiary thereof from complying with all other laws or regulations governing the business in which the bank holding company or subsidiary is engaged. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  68. 129.

    ## 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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    The chapter’s definitions control how the Financial Institutions Law is construed, unless the provision or context requires otherwise.

    ## 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. ) ## 129. Unless the provision or the context otherwise requires, the definitions set forth in this chapter govern the construction of the Financial Institutions Law. (Amended by Stats. 2013, Ch. 334, Sec. 8. (SB 537) Effective January 1, 2014.)
  69. 13.

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

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    This section defines “City” to include incorporated city, city and county, municipal corporation, municipality, town, and incorporated town.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. ) ## 13. “City” includes incorporated city, city and county, municipal corporation, municipality, town and incorporated town. (Enacted by Stats. 1951, Ch. 364.)
  70. 1300.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 9. Authorizations for Banks [1300 - 1301] ( Chapter 9 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Banks and affiliates may share fingerprints with law enforcement for criminal-history screening, must submit required fingerprint information to the Department of Justice, and must keep obtained criminal-history information confidential.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 9. Authorizations for Banks [1300 - 1301] ( Chapter 9 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1300. (a) Notwithstanding the provisions of Sections 1051, 1052, and 1054 of the Labor Code and Section 2947 of the Penal Code, a bank or any affiliate thereof, licensed under the laws of any state or of the United States, or any officer or employee thereof, may deliver fingerprints taken of a director, an officer, an employee, or an applicant for employment to local, state, or federal law enforcement agencies for the purpose of obtaining information as to the existence and nature of a criminal record, if any, of the person fingerprinted relating to convictions, and to any arrest for which that person is released on bail or on his or her own recognizance pending trial, for the commission or attempted commission of a crime involving robbery, burglary, theft, embezzlement, fraud, forgery, bookmaking, receiving stolen property, counterfeiting, or involving checks or credit cards or using computers. (b) The Department of Justice shall, pursuant to Section 11105 of the Penal Code, and a local agency may, pursuant to Section 13300 of the Penal Code, furnish to the officer of the bank or affiliate responsible for the final decision regarding employment of the person fingerprinted, or to his or her designees having responsibilities for personnel or security decisions in the usual scope and course of their employment with the bank or affiliate, summary criminal history information when requested pursuant to this section. If, upon evaluation of the criminal history information received pursuant to this section, the bank or affiliate determines that employment of the person fingerprinted would constitute an unreasonable risk to that bank or affiliate or its customers, the person may be denied employment. (c) Banks and their affiliates shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice of all directors, officers, employees, or an applicant for employment for the purpose of obtaining information regarding the existence and content of a record of state and federal convictions and also information regarding the existence and content of a record of state and federal arrests for which the Department of Justice establishes that the person is free on bail, or on his or her own recognizance, pending trial or appeal. (d) When the Department of Justice receives a request under this section for federal summary criminal history information, it shall forward the request to the Federal Bureau of Investigation. Once the information is received from the Federal Bureau of Investigation, the Department of Justice shall review, compile, and disseminate the information to the federally chartered bank or affiliate pursuant to paragraph (1) of subdivision (o) of Section 11105 of the Penal Code. (e) When the Department of Justice receives a request for federal summary criminal history information from a nonchartered bank, it shall forward the request to the Federal Bureau of Investigation. Once the information is received from the Federal Bureau of Investigation, the Department of Justice shall review and provide a fitness determination on an applicant for employment based on criminal convictions or on arrests for which the person is released on bail or on his or her own recognizance pending trial for the commission or attempted commission of crimes specified in subdivision (a). (f) A bank or affiliate may request from the Department of Justice subsequent arrest notification service, as provided pursuant to Section 11105.2 of the Penal Code, for persons described in subdivision (a). (g) The Department of Justice shall charge a fee sufficient to cover the cost of processing the requests described in this section. (h) Any criminal history information obtained pursuant to this section is confidential and no recipient shall disclose its contents other than for the purpose for which it was acquired. (i) “Affiliate,” as used in this section, means any corporation controlling, controlled by, or under common control with, a bank, whether directly, indirectly, or through one or more intermediaries. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  71. 13000.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 1. Intent [13000- 13000.] ( Chapter 1 added by Stats. 1990, Ch. 825, Sec. 1. )

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    This section says California’s ATM safety division is meant to protect consumers and set the standard of care for ATM operators while not discouraging ATM placement in convenient locations.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 1. Intent [13000- 13000.] ( Chapter 1 added by Stats. 1990, Ch. 825, Sec. 1. ) ## 13000. It is the intent of the Legislature in enacting this division to enhance the safety of consumers using automated teller machines in California without discouraging the siting of automated teller machines in locations convenient to consumers’ homes and workplaces. Since decisions concerning safety at automated teller machine sites are inherently subjective and because safety is a relative matter, the Legislature intends to establish as the standard of care applicable to operators of automated teller machines, in connection with user safety, the substantial compliance with the objective standards of Chapter 4 (commencing with Section 13040), the information requirements of Chapter 5 (commencing with Section 13050), and the good faith consideration of other safety issues as prescribed in Chapter 3 (commencing with Section 13030). The Legislature further recognizes the need for uniformity as to the establishment of automated teller machine safety standards and intends with this division to supersede and preempt any rule, regulation, code, statute, or ordinance of any city, county, city and county, municipality, or local agency regarding customer safety at automated teller machines in California. (Added by Stats. 1990, Ch. 825, Sec. 1.)
  72. 1301.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 9. Authorizations for Banks [1300 - 1301] ( Chapter 9 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Certain banks and related entities may sue a borrower for damages based on fraud in qualifying mortgage-related loans.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 9. Authorizations for Banks [1300 - 1301] ( Chapter 9 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1301. (a) Notwithstanding Section 726 of the Code of Civil Procedure or any other provision of law to the contrary, a state or nationally chartered bank, its subsidiaries or affiliates transacting business in this state, or any successor in interest thereto, that originates, acquires, or purchases, in whole or in part, any loan secured directly or collaterally, in whole or in part, by a mortgage or deed of trust on real property, or any interest therein, may bring an action for recovery of damages, including exemplary damages not to exceed 50 percent of the actual damages, against a borrower where the action is based on fraud under Section 1572 of the Civil Code and the fraudulent conduct by the borrower induced the original lender to make that loan. (b) The provisions of this section shall not apply to loans secured by single-family, owner-occupied residential real property, when the property is actually occupied by the borrower as represented to the lender in order to obtain the loan and the loan is for an amount of one hundred fifty thousand dollars ($150,000) or less, as adjusted annually, commencing on January 1, 1987, to the Consumer Price Index as published by the United States Department of Labor. (c) Any action maintained under this section for damages shall not constitute a money judgment for deficiency or a deficiency judgment within the meaning of Section 580a, 580b, or 580d of the Code of Civil Procedure. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  73. 13020.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 2. Definitions [13020- 13020.] ( Chapter 2 added by Stats. 1990, Ch. 825, Sec. 1. )

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    This section defines terms used in the ATM user safety division.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 2. Definitions [13020- 13020.] ( Chapter 2 added by Stats. 1990, Ch. 825, Sec. 1. ) ## 13020. As used in this division: (a) “Access area” means any paved walkway or sidewalk which is within 50 feet of an automated teller machine. The term does not include publicly maintained sidewalks or roads, as defined in Section 555 or Section 527 of the Vehicle Code. (b) “Access device” shall have the same meaning as set forth in Federal Reserve Board Regulation E (12 C.F.R. Part 205), promulgated pursuant to the Electronic Fund Transfer Act (15 U.S.C. 1601 et seq.). (c) “Automated teller machine” means any electronic information processing device located in California which accepts or dispenses cash in connection with a credit, deposit, or convenience account. The term does not include devices used solely to facilitate check guarantees or check authorizations, or which are used in connection with the acceptance or dispensing of cash on a person-to-person basis, such as by a store cashier. (d) “Candlefoot power” means the light intensity of candles on a horizontal plane at 36 inches above ground level and five feet in front of the area to be measured. (e) “Control” of an access area or defined parking area means to have the present authority to determine how, when, and by whom it is to be used, and how it is to be maintained, lighted, and landscaped. (f) “Customer” means a natural person to whom an access device has been issued for personal, family, or household use. (g) “Defined parking area” means that portion of any parking area open for customer parking which is (1) contiguous to an access area with respect to an automated teller machine; (2) regularly, principally, and lawfully used for parking by users of the automated teller machine while conducting automated teller machine transactions during hours of darkness; and (3) owned or leased by the operator of the automated teller machine or owned or controlled by the party leasing the automated teller machine site to the operator. The term does not include any parking area which is not open or regularly used for parking by users of the automated teller machine who are conducting automated teller machine transactions during hours of darkness. A parking area is not open if it is physically closed to access or if conspicuous signs indicate that it is closed. If a multiple level parking area satisfies the conditions of this subdivision and would therefore otherwise be a defined parking area, only the single parking level deemed by the operator of the automated teller machine to be the most directly accessible to the users of the automated teller machine shall be a defined parking area. (h) “Hours of darkness” means the period that commences 30 minutes after sunset and ends 30 minutes before sunrise. (i) “Operator” means any bank, savings association, credit union, industrial loan company, savings bank, or other business entity, or any person who operates an automated teller machine. (Added by Stats. 1990, Ch. 825, Sec. 1.)
  74. 13030.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 3. Location and Installation [13030 - 13031] ( Chapter 3 added by Stats. 1990, Ch. 825, Sec. 1. )

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    ATM operators must adopt procedures to evaluate ATM safety.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 3. Location and Installation [13030 - 13031] ( Chapter 3 added by Stats. 1990, Ch. 825, Sec. 1. ) ## 13030. On or before July 1, 1991, with respect to all existing installed automated teller machines in this state, and any automated teller machines installed after July 1, 1991, the operator shall adopt procedures for evaluating the safety of the automated teller machine. These procedures shall include a consideration of the following: (a) The extent to which the lighting for the automated teller machine complies or will comply with the standards required by Chapter 4 (commencing with Section 13040). (b) The presence of landscaping, vegetation, or other obstructions in the area of the automated teller machine, the access area, and the defined parking area. (c) The incidence of crimes of violence in the immediate neighborhood of the automated teller machine, as reflected in the records of the local law enforcement agency and of which the operator has actual knowledge. (Added by Stats. 1990, Ch. 825, Sec. 1.)
  75. 13031.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 3. Location and Installation [13030 - 13031] ( Chapter 3 added by Stats. 1990, Ch. 825, Sec. 1. )

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    This section says the chapter does not create a duty to relocate or modify automated teller machines because of particular events or circumstances; instead, it sets a good-faith standard for evaluating all ATMs.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 3. Location and Installation [13030 - 13031] ( Chapter 3 added by Stats. 1990, Ch. 825, Sec. 1. ) ## 13031. It is not the intent of the Legislature in enacting this chapter to impose a duty to relocate or modify automated teller machines upon the occurrence of any particular events or circumstances, but rather to establish a standard of good faith for the evaluation of all automated teller machines as provided herein. (Added by Stats. 1990, Ch. 825, Sec. 1.)
  76. 13040.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 4. Lighting [13040 - 13041] ( Chapter 4 added by Stats. 1990, Ch. 825, Sec. 1. )

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    ATM operators must comply with Section 13041 when installing machines on or after July 1, 1991, and in some cases the person controlling the access or parking area must do so instead.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 4. Lighting [13040 - 13041] ( Chapter 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## 13040. (a) Each operator of an automated teller machine installed on or after July 1, 1991, shall comply with Section 13041 commencing on the date the automated teller machine is installed. Compliance with Section 13041 by operators as to automated teller machines existing as of July 1, 1991, shall be optional until July 1, 1993, and mandatory thereafter. This subdivision shall apply to an operator of an automated teller machine only to the extent that the operator controls the access area or defined parking area to be lighted. (b) If an access area or a defined parking area is not controlled by the operator of the automated teller machine, and if the person who leased the automated teller machine site to the operator controls the access area or defined parking area, the person who controls the access area or defined parking area shall comply with Section 13041 as to any automated teller machine installed on or after July 1, 1991, commencing on the date the automated teller machine is installed; and as to any automated teller machine existing as of July 1, 1991, no later than on July 1, 1993. (Added by Stats. 1990, Ch. 825, Sec. 1.)
  77. 13041.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 4. Lighting [13040 - 13041] ( Chapter 4 added by Stats. 1990, Ch. 825, Sec. 1. )

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    People responsible for an open, operating ATM must provide lighting at night and meet minimum brightness levels around the ATM and nearby areas.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 4. Lighting [13040 - 13041] ( Chapter 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## 13041. The operator, owner, or other person responsible therefor, shall provide lighting during hours of darkness with respect to an open and operating automated teller machine and any defined parking area, access area, and the exterior of an enclosed automated teller machine installation according to the following standards: (a) There shall be a minimum of 10 candlefoot power at the face of the automated teller machine and extending in an unobstructed direction outward five feet. (b) There shall be a minimum of two candlefoot power within 50 feet from all unobstructed directions from the face of the automated teller machine. In the event the automated teller machine is located within 10 feet of the corner of the building and the automated teller machine is generally accessible from the adjacent side, there shall be minimum of two candlefoot power along the first 40 unobstructed feet of the adjacent side of the building. (c) There shall be a minimum of two candlefoot power in that portion of the defined parking area within 60 feet of the automated teller machine. (Added by Stats. 1990, Ch. 825, Sec. 1.)
  78. 13050.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 5. Consumer Education [13050- 13050.] ( Chapter 5 added by Stats. 1990, Ch. 825, Sec. 1. )

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    Issuers of access devices must give customers basic ATM safety notices, usually by personal delivery or mail.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 5. Consumer Education [13050- 13050.] ( Chapter 5 added by Stats. 1990, Ch. 825, Sec. 1. ) ## 13050. Customers receiving access devices shall be furnished by the respective issuers thereof with notices of basic safety precautions which customers should employ while using an automated teller machine. This information shall be furnished by personally delivering or by mailing the information to each customer whose mailing address as to the account to which the access device relates is in this state. This information shall be furnished with respect to access devices issued on or after July 1, 1991, at or before the time the customer is furnished with his or her access device. With respect to a customer to whom an “accepted access device” (as defined in Federal Reserve Board Regulation E) has been issued prior to July 1, 1991, the information shall be delivered or mailed to the customer on or before December 31, 1991. Only one notice need be furnished per household, and if access devices are furnished to more than one customer for a single account or set of accounts or on the basis of a single application or other request for the access devices, only a single notice need be furnished in satisfaction of the notification responsibilities as to all those customers. The information may be included with other disclosures related to the access device furnished to the customer, such as with any initial or periodic disclosure statement furnished pursuant to the Electronic Fund Transfer Act. (Added by Stats. 1990, Ch. 825, Sec. 1.)
  79. 13060.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 6. Exemptions [13060- 13060.] ( Chapter 6 added by Stats. 1990, Ch. 825, Sec. 1. )

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    This section says the division’s ATM safety rules do not apply to certain ATMs, including some inside buildings and ATMs in areas not controlled by the operator.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 6. Exemptions [13060- 13060.] ( Chapter 6 added by Stats. 1990, Ch. 825, Sec. 1. ) ## 13060. The provisions of this division shall not apply with respect to any automated teller machine which is: (a) Located inside of a building, unless it is a freestanding installation which exists for the sole purpose of providing an enclosure for the automated teller machine. (b) Located inside of a building, except to the extent a transaction can be conducted from outside the building. (c) Located in any area, including any access area, building, enclosed space, or parking area which is not controlled by the operator. (Added by Stats. 1990, Ch. 825, Sec. 1.)
  80. 13070.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 7. Effect of Compliance [13070- 13070.] ( Chapter 7 added by Stats. 1990, Ch. 825, Sec. 1. )

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    This division overrides local rules about customer safety at automated teller machines in California.

    ## Financial Code - FIN ## DIVISION 4. AUTOMATED TELLER MACHINES: USER SAFETY [13000 - 13070] ( Division 4 added by Stats. 1990, Ch. 825, Sec. 1. ) ## CHAPTER 7. Effect of Compliance [13070- 13070.] ( Chapter 7 added by Stats. 1990, Ch. 825, Sec. 1. ) ## 13070. This division supersedes and preempts all rules, regulations, codes, statutes, or ordinances of all cities, counties, cities and counties, municipalities, and local agencies regarding customer safety at automated teller machines located in California. (Added by Stats. 1990, Ch. 825, Sec. 1.)
  81. 13080.

    ## Financial Code - FIN ## DIVISION 4.5. AUTOMATED TELLER MACHINE SURCHARGE DISCLOSURE [13080 - 13083] ( Division 4.5 added by Stats. 1992, Ch. 348, Sec. 1. )

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    ATM operators must disclose surcharges and related prices electronically before charging, and must let customers cancel in some cases.

    ## Financial Code - FIN ## DIVISION 4.5. AUTOMATED TELLER MACHINE SURCHARGE DISCLOSURE [13080 - 13083] ( Division 4.5 added by Stats. 1992, Ch. 348, Sec. 1. ) ## 13080. (a) No operator of an automated teller machine (ATM) in this state shall impose any surcharge upon a customer for the usage of that machine whether or not the customer is using an access device issued by that operator unless that surcharge is clearly disclosed to the customer electronically on the automated teller machine. Unless the disclosure is made prior to the customer being obligated to pay the surcharge, the customer shall be provided an opportunity to cancel that transaction without incurring any surcharge. This subdivision does not apply to a point of sale transaction at an ATM. (b) If the sale of a good or service is conducted at the ATM, the operator of that ATM shall disclose to the customer electronically on the ATM the total price of the good or service and any fee charged solely for the usage of the ATM. Unless the disclosure is made prior to the customer being obligated to pay for the good or service, the customer shall be provided with an opportunity to cancel the transaction without incurring any obligation. (c) If a surcharge is imposed on a customer using an access device not issued by the operator, the operator shall disclose that the customer may also be charged an additional fee by his or her own institution. (d) As used in this section, “operator,” “automated teller machine,” “customer,” and “access device” have the meanings set forth in Section 13020. The term “surcharge” means any charge imposed by the operator of the ATM solely for use of the ATM. The term “service” includes, but is not limited to, receiving a statement of account activity. (Amended by Stats. 1996, Ch. 98, Sec. 1. Effective January 1, 1997. Operative July 1, 1997, by Sec. 2 of Ch. 98.)
  82. 13081.

    ## Financial Code - FIN ## DIVISION 4.5. AUTOMATED TELLER MACHINE SURCHARGE DISCLOSURE [13080 - 13083] ( Division 4.5 added by Stats. 1992, Ch. 348, Sec. 1. )

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    Operators of point-of-sale devices may not charge a fee unless they disclose it to the customer before the customer has to pay, and the disclosure must appear on the device as a federally compliant label; some devices with electronic displays must also show an electronic disclosure.

    ## Financial Code - FIN ## DIVISION 4.5. AUTOMATED TELLER MACHINE SURCHARGE DISCLOSURE [13080 - 13083] ( Division 4.5 added by Stats. 1992, Ch. 348, Sec. 1. ) ## 13081. (a) In enacting this section, the Legislature finds and declares all of the following: (1) It is in the best interest of consumers in this state to be aware of fees they may be charged for using point-of-sale devices prior to being obligated to pay those fees. (2) In 1996, the Legislature enacted Assembly Bill 3366 (Chapter 98 of the Statutes of 1996), which required operators of automatic teller machines (ATMs) to electronically disclose fees for transactions at those ATMs. That legislation did not require disclosure of fees at point-of-sale devices. (3) In order to maximize consumer awareness of fees at point-of-sale devices, and to create equity between operators of ATMs and operators of point-of-sale devices, it is the intent of the Legislature in enacting this section to require the maximum feasible disclosure of fees at point-of-sale devices. (b) No operator of a point-of-sale device in this state shall impose any fee upon a customer for the use of that device unless that fee is disclosed to the customer prior to the customer being obligated to pay for any goods or services. That disclosure shall be placed on or at the point-of-sale device as follows: (1) For all point-of-sale devices, the fee disclosure shall be on a label meeting federal standards. (2) For point-of-sale devices purchased on or after January 1, 2001, that have electronic displays, the fee disclosure shall also be electronic. (c) For purposes of this section, the term “point-of-sale device” includes any device used for the purchase of a good or service where a personal identification number (PIN) is required, but does not include an access device as defined in subdivision (b) of Section 13020. (d) For the purposes of this section, the term “operator of a point-of-sale device” means the person who imposes the fee on a customer for using a point-of-sale device to pay for a good or service. (Amended by Stats. 1998, Ch. 485, Sec. 71. Effective January 1, 1999.)
  83. 13082.

    ## Financial Code - FIN ## DIVISION 4.5. AUTOMATED TELLER MACHINE SURCHARGE DISCLOSURE [13080 - 13083] ( Division 4.5 added by Stats. 1992, Ch. 348, Sec. 1. )

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    Some point-of-sale devices must be accessible to visually impaired users, and manufacturers or distributors must offer compliant devices for sale in California.

    ## Financial Code - FIN ## DIVISION 4.5. AUTOMATED TELLER MACHINE SURCHARGE DISCLOSURE [13080 - 13083] ( Division 4.5 added by Stats. 1992, Ch. 348, Sec. 1. ) ## 13082. (a) Whenever a point-of-sale system is changed or modified to include a video touch screen or any other nontactile keypad, the point-of-sale device that would include the video touch screen or nontactile keypad shall also be equipped with either of the following: (1) A tactually discernible numerical keypad similar to a telephone keypad containing a raised dot with a dot base diameter between 1.5 millimeters and 1.6 millimeters and a height between 0.6 millimeters and 0.9 millimeters on the number 5 key that enables a visually impaired person to enter his or her own personal identification number or any other personal information necessary to process the transaction in a manner that provides the opportunity for the same degree of privacy input and output available to all individuals. (2) Other technology, such as a radio frequency identification device, fingerprint biometrics, or some other mechanism that enables a visually impaired person to access the video touch screen device with his or her personal identifier and to process his or her transaction in a manner that provides the opportunity for the same degree of privacy input and output available to all individuals. (b) (1) On or before January 1, 2010, any existing point-of-sale system, except as provided in paragraph (2), that includes a video touch screen or any other nontactile keypad shall also be equipped with a tactually discernable keypad or other technology as described in subdivision (a). (2) At locations equipped with two or less point-of-sale machines, only one point-of-sale machine shall be required to be equipped with a tactually discernible keypad or other technology on or before January 1, 2010, as described in subdivision (a). (c) On and after January 1, 2006, a manufacturer or distributor shall be required to offer for availability touch screen or other nontactile point-of-sale devices to be used and sold in this state that are equipped with tactually discernible keypads or other technology as described in subdivision (a) that enable a visually impaired person to enter his or her own personal identification number or any other personal information necessary to process a transaction in a manner that ensures personal privacy of the information being entered. (d) As used in this section, “point-of-sale device” includes any device used by a customer for the purchase of a good or service where a personal identification number (PIN) is required, but does not include the following: (1) An automated teller machine as defined in subdivision (c) of Section 13020. (2) A point-of-sale device that is equipped to, or exclusively services, motor fuel dispensers. (e) A unit is not in compliance with this section unless it includes a device, whether internal or external to the unit, that does not lend itself to easy removal, allows visually impaired users easy access, and otherwise meets the terms and conditions of this section. If the device is freestanding, it shall be permanently attached to the unit by means of a braided wire or some other tether. (f) This section shall not be construed to preclude or limit any other existing right or remedy as it pertains to point-of-sale devices and accessibility. (Amended by Stats. 2005, Ch. 49, Sec. 1. Effective January 1, 2006.)
  84. 13083.

    ## Financial Code - FIN ## DIVISION 4.5. AUTOMATED TELLER MACHINE SURCHARGE DISCLOSURE [13080 - 13083] ( Division 4.5 added by Stats. 1992, Ch. 348, Sec. 1. )

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    ATM operators or owners may charge certain foreign-bank customers an access fee or surcharge, and agreements cannot block that right.

    ## Financial Code - FIN ## DIVISION 4.5. AUTOMATED TELLER MACHINE SURCHARGE DISCLOSURE [13080 - 13083] ( Division 4.5 added by Stats. 1992, Ch. 348, Sec. 1. ) ## 13083. (a) Subject to the requirements of Section 13080, an agreement to operate or share an automated teller machine may not prohibit, limit, or restrict the right of the operator or owner of the automated teller machine to charge a customer conducting a transaction using an account from a financial institution that is located outside the United States an access fee or surcharge not otherwise prohibited under state or federal law. (b) Notwithstanding subdivision (a), nothing in this section shall be construed to prohibit or otherwise limit the ability of an operator or owner of an automated teller machine to voluntarily enter into an agreement regarding participation in a surcharge free network. (c) For purposes of this section, the terms “operator” and “automated teller machine” have the meanings set forth in Section 13020. (d) For the purposes of this section, the term “owner” means any entity that is not an operator under Section 13020, but that owns an automated teller machine. (Added by Stats. 2005, Ch. 256, Sec. 1. Effective January 1, 2006.)
  85. 131.

    ## 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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    This section says any reference in this division to the voting of shares must be interpreted according to Section 111 of the Corporations 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. ) ## 131. References in this division to the voting of shares shall be construed in accordance with Section 111 of the Corporations Code. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  86. 1320.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Banks and trust companies may deal in real property only for specified business purposes, and exchanging property requires the commissioner's written approval.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1320. A bank or trust company may purchase, acquire, hold, or lease real property or an interest therein only as follows: (a) Such as may be necessary or convenient for the use, operation or housing of its head office and branch offices, or for the storage of records or other personal property, or for office space for use by its officers or employees, or which may be reasonably necessary for future expansion of its business, or which is otherwise reasonably related to the conduct of its business. Real property used by a bank as its banking premises may include in addition to the space required for the transaction of its business other space which may be let as a source of income. (b) Such as may be conveyed to it in satisfaction in whole or in part of debts previously contracted in the course of its business. (c) Such as it may purchase or acquire at foreclosure sales under mortgages or deeds of trust held by it, or under judgments or decrees in its favor. (d) Such as it may purchase or otherwise acquire when necessary to minimize or prevent the loss or destruction of any lien or interest therein. (e) Such as it may purchase or otherwise acquire pursuant to Section 1322. A bank or trust company may sell, lease, or encumber real property or any interest therein owned by it, or, with the written approval of the commissioner, exchange the same for other real property. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  87. 1321.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Real property that is not held for permitted purposes must be sold when it can bring enough to reimburse the bank or trust company for losses tied to the loan or original investment. A bank or trust company also may not use retained real property to carry on unauthorized business, except as needed to orderly liquidate the debt.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1321. Any real property not held for any purpose permitted by subdivisions (a) and (e) of Section 1320 shall be sold whenever the same can be sold for an amount sufficient to reimburse the bank or trust company for all loss arising out of the loan for which such real property was security or arising out of the original investment. A bank or trust company shall not by the retention of any real property acquired pursuant to this section engage in any business not authorized by this division except to the extent necessary in the orderly liquidation of an indebtedness owing to the bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  88. 1322.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Commercial banks may invest in real property and acquire stock in certain real-property-investment corporations, but they must apply to the commissioner first and stay within stated investment limits unless the commissioner approves a higher percentage.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1322. (a) The Legislature finds and declares: (1) That it is necessary to increase job opportunities in real estate development and construction and to provide additional housing and commercial facilities in this state. (2) That within the commercial banking community there exists the expertise and ability to promote and assist in expansion of real estate development projects in this state. (3) That it is proper and appropriate to utilize that expertise and ability by authorizing commercial banks to engage in real estate development and management on an entrepreneurial basis. (b) As used in this section, “real property investment” means all forms of investing in real property, whether direct or in the form of partnerships, joint ventures, or other methods of investment. It includes, but is not limited to, the purchasing, subdividing, and developing of real property or any interest therein, the building of residential housing or commercial improvements, and the owning, renting, leasing, managing, operating for income, or selling of that property. (c) A commercial bank may acquire and hold stock of one or more corporations the primary activities of which are engaging in real property investment, in which event the sum of (1) investments made by a commercial bank pursuant to the authority of this subdivision, (2) any loans and guarantees extended by a commercial bank to, or for the benefit of, corporations whose stock it holds pursuant to the authority of this subdivision, and (3) real property investments made pursuant to the authority of subdivision (d), unless a higher percentage is approved by the commissioner in writing, shall not exceed 10 percent of the total assets of the bank. (d) A commercial bank may engage in real property investment. The total of all real property investments made pursuant to the authority of this subdivision, unless a higher percentage is approved by the commissioner in writing, shall not exceed the total shareholders’ equity of the bank. (e) Prior to initially engaging in real property investment activities authorized by this section, a commercial bank shall make application with the commissioner for approval of its general plan of real property investment. The application for approval shall be in letter form, shall contain a copy of the general plan for real property investment as approved or adopted by the board of directors of the bank, which shall include a brief description of either the activities of the corporations the bank will invest in or the activities the bank will engage in, or both, the approximate amount to be invested, the extent, if any, of diversification of those activities or investment, and the approximate date of the initial investment, and shall be signed by the chief executive officer of the bank. Unless the commissioner finds (1) that the capital, assets, management, earnings, and liquidity of the commercial bank are, on a composite basis, not satisfactory, or (2) that the plan for the commercial bank to engage in real property investment or to acquire and hold the stock of one or more real property investment corporations is unsafe or unsound, the commissioner shall approve the application. An application for approval shall be deemed approved on the 46th day after the application is filed with the commissioner, unless the commissioner earlier makes a final decision on the application or extends the period for approving or denying the application. For purposes of this subdivision, an application for approval shall be deemed to be filed with the commissioner on the date when the application, substantially in compliance with the requirements of this subdivision, is received by the commissioner. Upon the filing of the application for approval, the applicant shall pay to the commissioner a filing fee of five hundred dollars ($500). (f) The legality of any investment lawfully made pursuant to this section as it read prior to the amendment of this section shall not be affected by the existing form of this section, nor shall this section be construed to require the changing of any investments heretofore lawfully made. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  89. 1323.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Bank directors, officers, and employees must not take or agree to take personal commissions, gifts, or other value for helping someone get a loan or for allowing an overdraft.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1323. Any director, officer, or employee of a bank or of a foreign banking corporation who asks for or receives, or consents or agrees to receive, any commission, emolument, or gratuity or any money, property, or thing of value for his own personal benefit or of personal advantage for procuring or endeavoring to procure for any person any loan from such bank, or the purchase or discount of any note, draft, check, bill of exchange, or other obligation by such bank, or for permitting any person to overdraw any account with such bank, is guilty of a felony. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  90. 1324.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank director, officer, agent, or employee commits a felony if they knowingly take or possess bank property, intend to defraud, and fail to make a full and true book entry or help omit a material entry.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1324. Any director, officer, agent, or employee of any bank who knowingly receives or possesses himself or herself of any of its property otherwise than in payment of a just demand, and with intent to defraud, omits to make or cause to be made a full and true entry thereof in its books and accounts or concurs in omitting to make any material entry thereof is guilty of a felony. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  91. 1325.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank director, officer, agent, or employee commits a felony if they knowingly help make or publish a materially false report about the bank, or if they willfully fail to enter required book entries or allow the commissioner or examiners to inspect the books or take extracts.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1325. Any director, officer, agent, or employee of a bank who knowingly concurs in making or publishing any written report, exhibit, or statement of its affairs or pecuniary condition containing any material statement which is false, or having the custody of its books willfully refuses or neglects to make any proper entry in such books as required by law, or to exhibit or allow the same to be inspected or extracts to be taken therefrom by the commissioner or his or her deputies or examiners, is guilty of a felony. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  92. 1326.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank must not publish combined resources or liabilities with another bank unless the statement separately shows each bank’s resources and liabilities.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1326. No bank shall publish a statement of its resources or liabilities in connection with those of any other bank, unless such statement shall show the resources and liabilities of each bank separately. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  93. 1327.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    It is a misdemeanor to willfully and knowingly spread or help spread false statements or rumors about a bank’s financial condition, solvency, or financial standing.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1327. (a) Any person who willfully and knowingly makes, circulates, or transmits to another or others, any statement or rumor, written, printed, or by word of mouth, which is untrue in fact and is directly or by inference derogatory to the financial condition or affects the solvency or financial standing of any bank doing business in this state, or who knowingly counsels, aids, procures, or induces another to start, transmit, or circulate any such statement or rumor, is guilty of a misdemeanor punishable by a fine of not more than one thousand dollars ($1,000), or by imprisonment for not more than one year, or both. (b) The provisions of Section 329 shall not apply to this section. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  94. 1328.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Banks and trust companies may rent safe deposit boxes and hold property for safekeeping, but they must give customers a copy of certain agreements and cannot leave blank spaces for later filling in.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1328. (a) A bank or trust company may engage in the business of renting safe deposit boxes and may receive personal property for safekeeping and storage on its banking premises. (b) A copy of any safe deposit rental agreement, or personal property safekeeping and storage agreement, which is prepared by the bank or trust company and signed by the customer shall be delivered to the customer at the time the agreement is signed if the agreement is signed at a place of business of the bank or trust company. If the agreement is not signed at a place of business of the bank or trust company, the bank or trust company shall mail or deliver a copy of the agreement to the customer within 10 calendar days after the bank or trust company receives it. The contract shall not contain any blank spaces to be filled in after the customer signs the contract. If more than one customer has signed the agreement, the bank or trust company may comply with this section by mailing or delivering the copy to any one of the customers who reside at the same address. A copy shall also be mailed or delivered to any other customer who has signed the agreement and who does not reside at the same address. As used in this section, “copy” means a reproduction, facsimile, or duplicate. A bank or trust company which fails to comply with this section is liable to its customer for any actual damages suffered by the customer as a result of that failure. The remedy provided by this section is nonexclusive and is in addition to any remedies or penalties available under other laws of this state. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  95. 1329.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank may not buy certain property or related contracts involving an interested subject person unless its board approves first, and the price cannot exceed current market value.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1329. (a) In this section, “subject person,” when used with respect to a bank, means any director or officer of the bank, any controlling person of the bank, or any director or officer of a controlling person of the bank. For purposes of this subdivision, “controlling person” has the meaning set forth in subdivision (c) of Section 1250. (b) No bank shall purchase any real or personal property or any interest in real or personal property, including, but not limited to, a leasehold, or any contract arising from the sale of real or personal property or any note or bond in which any subject person of such bank is personally or financially interested, directly or indirectly, for such person’s own account, for such person, or as the partner or agent of others, without the prior approval by the board of directors of the bank and for not more than the current market value of the property purchased. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  96. 133.

    ## 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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    If a bank’s articles change how many votes a share carries, the voting references in Sections 139 and 141 are read in terms of votes entitled to be cast. Disqualified shares are not counted as outstanding for quorum or the vote needed to approve the action.

    ## 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. ) ## 133. If the articles of a bank provide for more or less than one vote for any share on any matter, the references in Sections 139 and 141 to a majority or other proportion of shares means, as to such matter, a majority or other proportion of the votes entitled to be cast. Whenever, under Division 1 (commencing with Section 100), Title 1 of the Corporations Code, this division, or Division 1.1 (commencing with Section 1000), shares are disqualified from voting on any matter, they shall not be considered outstanding for the determination of a quorum at any meeting to act upon, or the required vote to approve action upon, such matter under any provision of Division 1 (commencing with Section 100), Title 1 of the Corporations Code, of this division, Division 1.1 (commencing with Section 1000), or of the articles or bylaws. (Amended by Stats. 2013, Ch. 334, Sec. 9. (SB 537) Effective January 1, 2014.)
  97. 1330.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A subject person of a bank may not buy the bank’s obligations or assets, directly or indirectly, unless the bank’s board approves and the price is at least current market value.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1330. (a) In this section, “subject person” has the meaning set forth in subdivision (a) of Section 1329. (b) No subject person of a bank shall purchase, directly or indirectly, or be interested in the purchase of, any of the bank’s obligations or assets without the prior approval of the board of the directors of the bank and for an amount less than the then current market value. Every person violating this section shall be liable to the people of this state, for each offense, for twice the market value of the assets so purchased. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  98. 1331.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Banks are prohibited from acquiring or lending against certain bank or controlling-person securities, subject to listed exceptions.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1331. (a) For purposes of this section, the following terms have the following meanings: (1) “Carrying a security” means maintaining, reducing, or retiring indebtedness originally incurred to acquire a security. (2) “Controlling person” has the same meaning specified in Section 1250. (3) “Security” has the following meanings: (A) When used with respect to a bank, “security” has the same meaning set forth in subdivision (c) of Section 1200. (B) When used with respect to any other person, “security” has the same meaning set forth in Section 25019 of the Corporations Code. (b) No bank shall acquire, hold, extend credit on the security of, or extend credit for the purpose of acquiring or carrying, any security of the bank or of any controlling person of the bank. (c) (1) Any bank which acquires or holds securities in violation of this section shall be liable to the people of this state for twice the market, book, or face value of the securities, whichever is greatest. (2) Any bank which extends credit in violation of this section shall be liable to the people of this state for twice the amount of the credit so extended. (d) This section does not apply to any of the following transactions: (1) Any acquisition or extension of credit by a bank which is necessary to reduce or prevent loss to the bank on debts previously contracted in good faith. (2) Any redemption by a bank of any of its redeemable securities in accordance with applicable provisions of this division and of Division 1 (commencing with Section 100) of Title 1 of the Corporations Code. (3) Any acquisition by a bank of any of its securities, other than an acquisition of the type described in paragraph (1) or (2), if the acquisition is approved in advance by the commissioner. (e) The provisions of Section 329 shall not apply to this section. (Amended by Stats. 2013, Ch. 334, Sec. 36. (SB 537) Effective January 1, 2014.)
  99. 1332.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Bank officers, directors, trustees, employees, or agents who willfully misapply or take bank property commit a felony; on conviction, the court must order full restitution to the bank.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1332. Any officer, director, trustee, employee, or agent of any bank in this state, who abstracts or willfully misapplies any of the money, funds, or property of the bank, or willfully misapplies its credit, is guilty of a felony. Upon conviction, the court shall, in addition to any other punishment imposed, order the person to make full restitution to the bank. Nothing in this section shall be deemed or construed to repeal, amend or impair any existing provision of law prescribing a punishment for such an offense. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  100. 1333.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank director in this state commits a misdemeanor if they participate in fraud during a fraudulent insolvency, or if they willfully do a legally forbidden act or omit a legal duty as director.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1333. (a) Every director of a bank in this state who does either of the following is guilty of a misdemeanor: (1) In case of the fraudulent insolvency of such bank, the director participated in the fraud. (2) Willfully does any act as the director that is expressly forbidden by law or willfully omits to perform any duty imposed by law upon him or her as the director. (b) The insolvency of a bank is deemed fraudulent for the purposes of this section, unless its affairs appear upon investigation to have been administered clearly, legally, and with the same care and diligence that agents receiving a compensation for their services are bound, by law, to observe. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  101. 1334.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank officer or agent must not make or deliver a guaranty or endorsement for the bank if it could create liability beyond the bank’s legally allowed loans and discounts; doing so is a misdemeanor.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1334. An officer or agent of any bank in this state, who makes or delivers any guaranty or endorsement on behalf of such bank, whereby it may become liable upon any of its discounted notes, bills or obligations, in a sum beyond the amount of loans and discounts which such bank may legally make, is guilty of a misdemeanor. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  102. 1335.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank director in this state must not join in a vote or act intended to make a prohibited loan or discount to a director, or on paper for which a director is liable, above the statutory limit.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1335. A director of a bank, organized under the laws of this state, who concurs in any vote or act of the directors of such corporation, or any of them, by which it is intended to make a loan or discount to any director of such corporation, or upon paper upon which any such director is liable or responsible to an amount exceeding the amount allowed by the statutes is guilty of a misdemeanor. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  103. 1336.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Bank directors, trustees, officers, and employees may not place bank funds with another corporation on an understanding that it will make a loan or advance to specified persons.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1336. Any director, trustee, officer, or employee of any bank organized under the laws of this state, who makes or maintains, or attempts to make or maintain, a deposit of such bank’s funds with any other corporation on condition, or with the understanding, express or implied, that the corporation receiving such deposit make a loan or advance, directly or indirectly, to any director, trustee, officer, or employee of the corporation so making or maintaining or attempting to make or maintain such deposit is guilty of a felony. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  104. 1337.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Bank officers and employees must not intentionally hide certain interim loans, discounts, or securities transactions from the bank’s directors, and must report those items when required by law.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1337. Any officer or employee of any bank organized under the laws of this state, who intentionally conceals from the directors of the bank any discounts or loans made by it between the regular meetings of its board, or the purchase of any securities or the sale of its securities during that period, or knowingly fails to report to the board when required to do so by law, all discounts or loans made by it and all securities purchased or sold by it between the regular meetings of its board, is guilty of a misdemeanor. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  105. 1338.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Bank officers, agents, tellers, clerks, and individual bankers commit a misdemeanor if they receive deposits while knowing the bank or banker is insolvent.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1338. Every officer, agent, teller, or clerk of any bank, and every individual banker, or agent, teller, or clerk of any individual banker, who receives any deposits, knowing that the bank, association, or banker is insolvent, is guilty of a misdemeanor. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  106. 1339.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Bank officers and related personnel must not knowingly make false entries or tamper with bank records, and doing so with intent to deceive is a felony.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1339. Any officer, director, trustee, employee, or agent of any bank, who willfully makes a false or untrue entry in any book or record or in any report, tag, or statement of the business, affairs, or condition or in connection with any transaction of the bank, with intent to deceive any officer, director or trustee thereof, or any agent or examiner, private or official, employed or lawfully appointed to examine into its condition or into any of its affairs or transactions, or any public officer, office, or board to which the bank is required by law to report, or which has authority by law to examine into its affairs or transactions, or into any of its affairs or transactions, or who, with like intent, willfully omits to make a new entry of any matter particularly pertaining to the business, property, condition, affairs, transactions, assets, or accounts of the bank in any book, record, report, statement, or tag of the bank, or who with like intent alters, abstracts, conceals, or destroys any book, record, report, statement, or tag of the bank made, written, or kept, or required to be made, written, or kept by him or her or under his or her direction, is guilty of a felony. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  107. 1340.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may not become or act as a general partner, unless specifically authorized by law or by the commissioner.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1340. Unless specifically authorized by law or by the commissioner, a bank shall not become, act as, or in any other manner assume the duties or liabilities of, a general partner. For purposes of this section, “general partner” has the meaning set forth in subdivision (m) of Section 15901.02 of the Corporations Code. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  108. 1341.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank or its agent that has received the specified notice must not make a later vehicle-related assignment unless it simultaneously tells the assignee the notice information.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1320 - 1341] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1341. A bank, or the agent of a bank, that has received a notice pursuant to Section 7507.6 of the Business and Professions Code, shall not make a subsequent assignment to skip trace, locate, or repossess a vehicle without simultaneously, and in the same manner by which the assignment is given, advising the assignee of the assignment of the information contained in the notice. As used in this section, “assignment” has the same meaning set forth in Section 7500.1 of the Business and Professions Code. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  109. 135.

    ## 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 this division requires a vote of each class of outstanding shares, that requirement must be interpreted under Section 117 of the Corporations 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. ) ## 135. Any requirement in this division for a vote of each class of outstanding shares shall be construed in accordance with Section 117 of the Corporations Code. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  110. 1360.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section says the article should be read to conform with Regulation O and related Federal Reserve interpretations, where applicable.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1360. It is the intent of the Legislature that the provisions of this article, insofar as they are contained in Regulation O (12 C.F.R. Part 215) of the Federal Reserve Board, conform, and be interpreted by anyone construing the provisions of this article to so conform, to Regulation O, to any rule or interpretation promulgated thereunder by the Board of Governors of the Federal Reserve System, and to any interpretation issued by an official or employee of the Federal Reserve System duly authorized to issue the interpretation. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  111. 1361.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines key terms used in the article, including “bank,” “company,” “executive officer,” “extension of credit,” “Regulation O,” and “subsidiary.”

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1361. As used in this article: (a) “Bank” means: (1) Any commercial bank, industrial bank, or trust company incorporated under the laws of this state. (2) Any foreign (other nation) bank that is licensed by the commissioner under Article 3 (commencing with Section 1800) of Chapter 20 to maintain a depositary agency or branch office, as defined in Section 1750, in this state, with respect to any office of that type. (3) Any corporation incorporated under the laws of this state that is incorporated for the purpose of engaging in, or that is authorized by the commissioner to engage in, business under Article 1 (commencing with Section 1850) of Chapter 21. (4) Any foreign corporation that is licensed by the commissioner under Article 1 (commencing with Section 1850) of Chapter 21 to maintain an office in this state and to transact at the office business under that article, with respect to any office of that type. (5) When used to designate a person that extends credit, any subsidiary of a bank, as defined in paragraph (1), (2), (3), or (4). (b) “Company” has the meaning set forth in subdivision (b) of Section 215.2 of Regulation O. (c) “Executive officer” has the meaning set forth in paragraph (1) of subdivision (e) of Section 215.2 of Regulation O. Also, “executive officer,” when used with respect to any bank of the type described in paragraph (2) or (4) of subdivision (a), includes the manager of each office of the type referred to in paragraph (2) or (4) of subdivision (a) that the bank maintains in this state. (d) “Extension of credit” has the meaning set forth in Section 215.3 of Regulation O. However, for purposes of this subdivision, the term “member bank,” as used in Section 215.3, means a bank. (e) “Regulation O” means Regulation O (Part 215 (commencing with Section 215.1) of Title 12 of the Code of Federal Regulations) of the Board of Governors of the Federal Reserve System. (f) “Subsidiary” has the meaning set forth in Section 1841(d) of Title 12 of the United States Code. However, for purposes of this subdivision, the term “bank holding company,” as used in Section 1841(d) of Title 12 of the United States Code, means a bank holding company, as defined in Section 1841(a) of Title 12 of the United States Code, or a bank, and the term “board,” as used in Section 1841(d) of Title 12 of the United States Code, means the commissioner. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  112. 1362.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section adopts several Regulation O provisions for this article, changes some defined terms, and requires a bank to promptly report certain extensions of credit to its board.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1362. Sections 215.2, 215.3, 215.4, 215.5, 215.8, and 215.9 of Regulation O in all of their particulars, including footnotes, are hereby referred to, incorporated by reference into this article, and adopted, subject to the following: (a) The term “this Subpart,” as used in the referenced sections of Regulation O, means this article. (b) Subdivision (j) of Section 215.2 of Regulation O is not applicable. Instead, the term “member bank,” as used in the referenced sections of Regulation O, means a bank. (c) The term “executive officer,” as used in the referenced sections of Regulation O, includes, in the case of a bank of the type described in paragraph (2) or (4) of subdivision (a) of Section 1361, the manager of each office of the type referred to in paragraph (2) or (4) of subdivision (a) of Section 1361 that the bank maintains in this state. (d) The definition of “lending limit” in subdivision (i) of Section 215.2 of Regulation O is not applicable; instead, the term “lending limit,” as used in the referenced sections of Regulation O, means an amount equal to the limit on obligations of a single obligor set forth in Section 1481, and any reference in the referenced sections of Regulation O to the lending limit specified in subdivision (i) of Section 215.2 is considered to be a reference to the limit specified in Section 1481. (e) (1) Any company which is majority owned by one or more executive officers or directors of a bank, individually or collectively, is deemed to be a related interest of each of those executive officers or directors for purposes of the referenced sections of Regulation O. (2) In case an individual who is an executive officer of a bank is also a director or executive officer of a company, the company is deemed to be a related interest of the individual for purposes of the referenced sections of Regulation O except subdivision (c) of Section 215.4. However, this paragraph shall not apply to an extension of credit by a bank to any of the following companies: (A) A bank holding company of which the bank is a subsidiary. (B) Any subsidiary of the bank holding company. (C) Any nonprofit company engaged in religious, charitable, educational, scientific, literary, social, or recreational purposes, provided that the individual whose position as a director or executive officer of the company at issue does not receive compensation in excess of one thousand dollars ($1,000) per year for serving as a director or executive officer of the company. (3) In case a bank in making an extension of credit becomes subject to the requirements set forth in subdivision (b)(1)(i) of Section 215.4 of Regulation O because of paragraph (1) or (2), the bank shall be deemed to fulfill the requirement if the extension of credit is promptly reported to the board of the bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  113. 1363.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank must not extend credit above the amount allowed under Regulation O to a company majority owned by the bank’s executive officers.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1363. No bank shall extend credit in an aggregate amount greater than the amount permitted in paragraph (4) of subdivision (c) of Section 215.5 of Regulation O to any company that is majority owned by one or more executive officers of the bank, individually or collectively. For purposes of paragraph (4) of subdivision (c) of Section 215.5 of Regulation O, the total amount of credit extended by the bank to the company is considered to be extended to each of those executive officers. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  114. 1364.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    When a bank makes a credit extension covered by this article, it must follow all other applicable banking provisions in the division.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1364. In making any extension of credit that is subject to this article, a bank shall comply with all other applicable provisions of this division relating to extensions of credit by banks. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  115. 1365.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section says Article 2 and Article 3 do not apply to a bank’s advance of money made under Section 317 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 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1365. No provision of this article or of Article 3 (commencing with Section 1480) of Chapter 14 shall apply to an advance of money made by a bank pursuant to Section 317 of the Corporations Code. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  116. 1366.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank may make a loan for the benefit of a trust, even if the bank’s officers or directors are trustees of that trust.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1366. A bank may make a loan, otherwise complying with the provisions of this division, for the benefit of a trust, notwithstanding that the bank or any one or more executive officers or directors of the bank are trustees of the trust. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  117. 1367.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Banks that make prohibited extensions of credit can face a civil penalty, and other people who knowingly make or procure such credit extensions can be guilty of a felony.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 10. Restrictions and Prohibited Practices [1320 - 1367] ( Chapter 10 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Loans to Insiders [1360 - 1367] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1367. Any bank that makes an extension of credit in violation of this article is subject to a civil penalty pursuant to Section 329. Any person, other than the bank making the extension of credit, who knowingly makes or procures an extension of credit in violation of this article is guilty of a felony. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  118. 137.

    ## 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 “approved by the board” as approval or ratification by the board vote, or by a committee vote if the committee has board powers, with listed exceptions.

    ## 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. ) ## 137. “Approved by (or approval of) the board” means approved or ratified by the vote of the board or by the vote of a committee authorized to exercise the powers of the board, except as to any matter not within the competence of the committee under Section 311 of the Corporations Code or any matter for which this division also requires approval of the shareholders or approval of the outstanding shares. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  119. 1380.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1380 - 1382] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines “authorized agency activities” and “insured depository institution,” and lets the commissioner specify additional activities by order or regulation.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1380 - 1382] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1380. In this chapter, unless the context otherwise requires: (a) “Authorized agency activities” means receiving deposits, renewing time deposits, closing loans, servicing loans, and receiving payments on loans and other obligations. “Authorized agency activities” includes ministerial functions such as providing loan applications, assembling documents, providing a location for returning documents necessary for making a loan, providing loan account information, receiving payments, disbursing loan funds, evaluating loan applications, and other activities that the commissioner may specify by order or regulation. However, “authorized agency activities” does not include any other activities that the commissioner may specify by order or regulation. (b) “Insured depository institution” means any bank, savings and loan association, savings association, savings bank, or industrial loan company the deposits of which are insured by the Federal Deposit Insurance Corporation. “Insured depository institution” includes any depository institution affiliate within the meaning of Section 18(r) of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1828(r)). (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  120. 1381.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1380 - 1382] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This chapter does not apply to certain California state banks acting as agents in authorized agency activities, except in a specific office-of-principal situation tied to Sections 1389 and 1396.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1380 - 1382] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1381. This chapter does not apply to a California state bank having an insured depository institution engage in authorized agency activities as its agent or to a California state bank engaging in authorized agency activities as agent for an insured depository institution in any case other than a case where, but for the provisions of Sections 1389 and 1396, an office of the agent would for regulatory purposes be considered to be an office of the principal. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  121. 1382.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1380 - 1382] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A California state bank and an affiliated insured depository institution can satisfy the prior approval requirement by filing a notice with the commissioner, if the commissioner does not object within the allowed time.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. General Provisions [1380 - 1382] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1382. (a) In this section, “affiliated,” when used with respect to a California state bank and an insured depository institution, means that the California state bank controls the insured depository institution, the insured depository institution controls the California state bank, or the California state bank and the insured depository institution are under common control, directly or indirectly through one or more intermediaries. For purposes of this subdivision, “control” has the meaning set forth in Section 1250. (b) In case a California state bank and an insured depository institution are affiliated, the prior approval requirement set forth in Section 1384 or 1391 is deemed to be satisfied if the California state bank files a notice with the commissioner and, within 30 days or any longer period to which the California state bank consents, the commissioner either (1) issues a written statement not objecting to the notice or (2) does not issue a written objection to the notice. (c) (1) A notice filed by a California state bank under subdivision (b) shall contain the following information: (A) The name of the California state bank. (B) The name and location of the main or head office of the affiliated insured depository institution. (C) A description of the proposed agency, including identification of the institution that is to be the principal, identification of the institution that is to be the agent, and specification of the activities in which the agent is to engage on behalf of the principal. (D) Any other information that the commissioner may require. (2) A notice filed by a California state bank under subdivision (b) shall be in the form, shall be signed in the manner, and shall, if the commissioner requires by regulation or order, be verified in the manner that the commissioner may by regulation or order require. (3) A notice filed by a California state bank under subdivision (b) shall be accompanied by a filing fee of two hundred fifty dollars ($250). (d) For purposes of subdivision (b), a notice by a California state bank 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 (c) is received by the commissioner. (e) In determining whether or not to object to a notice by a California state bank, the commissioner shall consider the factors set forth in Section 1387 or 1394, as the case may be. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  122. 1384.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A California state bank may use an insured depository institution to carry out authorized agency activities as its agent, but only with prior approval from the commissioner and subject to any regulations the commissioner prescribes.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1384. Notwithstanding the provisions of Chapter 4 (commencing with Section 1070), a California state bank may, with the prior approval of the commissioner and subject to any regulations that the commissioner may prescribe, have an insured depository institution engage in authorized agency activities as its agent. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  123. 1385.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A California state bank must submit an application for approval in the required form, with the required information and signature, and must verify it if the commissioner requires verification.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1385. An application by a California state bank for approval to have an insured depository institution engage in authorized agency activities as its agent shall be in the form, shall contain the information, shall be signed in the manner, and shall, if the commissioner so requires by regulation or order, be verified in the manner that the commissioner may, by regulation or order, require. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  124. 1386.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A California state bank applying for approval must include a $250 filing fee.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1386. An application by a California state bank for approval to have an insured depository institution engage in authorized agency activities as its agent shall be accompanied by a filing fee of two hundred fifty dollars ($250). (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  125. 1387.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    When deciding whether to approve or deny this bank application, the commissioner must consider the listed factors.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1387. In determining whether to approve or deny an application by a California state bank for approval to have an insured depository institution engage in authorized agency activities as its agent, the commissioner shall consider both of the following: (a) Whether the proposed agency arrangement is consistent with the safe and sound operation of the California state bank. (b) Any other factors that the commissioner deems relevant. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  126. 1388.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A California state bank may not use an insured depository institution as its agent to do anything the bank itself is prohibited from doing.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1388. No California state bank may have an insured depository institution conduct as its agent any activity that the California state bank is prohibited from conducting itself. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  127. 1389.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    An office of an insured depository institution is not treated as an office of a California state bank just because it performs authorized agency activities as agent for that bank under this article.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1389. No office of an insured depository institution that is performing authorized agency activities as agent for a California state bank in accordance with this article shall, on that account, be deemed to be an office of the California state bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  128. 139.

    ## 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 “approved by (or approval of) the outstanding shares” and explains what counts as approval.

    ## 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. ) ## 139. “Approved by (or approval of) the outstanding shares” has the meaning set forth in Section 152 of the Corporations Code and shall include approval by the affirmative vote of a majority of the outstanding shares of each class or series entitled, by any provision of the articles, of this division, or of Division 1 (commencing with Section 100), Title 1 of the Corporations Code, to vote as a class or series on the subject matter being voted upon, and shall also include approval by the affirmative vote of such greater proportion (including all) of the outstanding shares of any class or series if such greater proportion is required by the articles, by this division, or by Division 1 (commencing with Section 100), Title 1 of the Corporations Code. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  129. 1390.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If the commissioner finds an agency activity is unauthorized or unsafe, the commissioner may order the California state bank to end the agency arrangement.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. California State Bank as Principal [1384 - 1390] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1390. If the commissioner finds that any activity performed by an insured depository institution as agent for a California state bank is not an authorized agency activity or that the agency arrangement is inconsistent with safe and sound banking practices, the commissioner may order the California state bank to terminate the agency arrangement. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  130. 1391.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A California state bank may act as an agent for an insured depository institution if it gets prior approval from the commissioner and follows any regulations the commissioner prescribes.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1391. Notwithstanding the provisions of Chapter 4 (commencing with Section 1070), a California state bank may, with the prior approval of the commissioner and subject to any regulations that the commissioner may prescribe, engage in authorized agency activities as agent for an insured depository institution. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  131. 1392.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A California state bank seeking approval to act as agent for an insured depository institution must use the required form, provide the required information, and sign the application as required.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1392. An application by a California state bank for approval to engage in authorized agency activities as agent for an insured depository institution shall be in the form, shall contain the information, shall be signed in the manner, and shall, if the commissioner so requires by regulation or order, be verified in the manner that the commissioner may, by regulation or order, require. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  132. 1393.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A California state bank applying for approval to act as an agent for an insured depository institution must include a $250 filing fee.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1393. An application by a California state bank for approval to engage in authorized agency activities as agent for an insured depository institution shall be accompanied by a filing fee of two hundred fifty dollars ($250). (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  133. 1394.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    When deciding whether to approve or deny a California state bank’s application for agency activities, the commissioner must consider specified factors.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1394. In determining whether to approve or deny an application by a California state bank for approval to engage in authorized agency activities as agent for an insured depository institution, the commissioner shall consider both of the following factors: (a) Whether the proposed agency arrangement is consistent with the safe and sound operation of the California state bank. (b) Any other factors that the commissioner deems relevant. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  134. 1395.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A California state bank may not act as an agent for an insured depository institution if the activity would be prohibited for it to do as a principal.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1395. No California state bank may conduct any activity as an agent for an insured depository institution that the California state bank would be prohibited from conducting as a principal. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  135. 1396.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    An office of a California state bank acting as agent for an insured depository institution is not treated as the insured depository institution’s office, and the institution is not treated as transacting business in California on that basis.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1396. (a) No office of a California state bank that conducts authorized agency activities as agent for an insured depository institution in accordance with this article shall, on that account, be deemed to be an office of the insured depository institution. (b) For purposes of this division, no insured depository institution that has a California state bank engaged in authorized agency activities as its agent shall on that account be deemed to be transacting business in this state. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  136. 1397.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    If the commissioner finds certain agency activities are unauthorized or unsafe, the commissioner may order a California state bank to end the agency arrangement.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 11. Agency Activities [1380 - 1397] ( Chapter 11 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 3. California State Bank as Agent [1391 - 1397] ( Article 3 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1397. If the commissioner finds that any activities performed by a California state bank as agent for an insured depository institution are not authorized agency activities or that the agency arrangement is inconsistent with safe and sound banking practices, the commissioner may order the California state bank to terminate the agency arrangement. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  137. 14.

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

    Verify source ↗

    For this code, “county” also includes a city and county.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. ) ## 14. “County” includes city and county. (Enacted by Stats. 1951, Ch. 364.)
  138. 1400.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank account in a minor’s name must be held for the minor’s exclusive benefit, and payments may be made to the minor or the minor’s order.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1400. A bank account by or in the name of a minor shall be held for the exclusive right and benefit of such minor and shall be paid to such minor or to his order and payment so made is a valid release and discharge to the bank for such deposit or any part thereof. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  139. 14000.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    This division is named the “California Credit Union Law.”

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14000. This division shall be known as the “California Credit Union Law.” (Repealed and added by Stats. 1979, Ch. 112.)
  140. 14001.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    The definitions in this division control how the division is interpreted, unless the context requires otherwise.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14001. The definitions given in this division govern the construction of this division unless the context otherwise requires. (Repealed and added by Stats. 1979, Ch. 112.)
  141. 14001.1.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    This division applies to any person, except a federal credit union engaged in the business of a credit union in this state.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14001.1. This division is applicable to any person, other than a federal credit union engaging in the business of a credit union in this state. For purposes of this division, “person” shall have the meaning set forth in Section 5065 of the Corporations Code. (Added by Stats. 2002, Ch. 734, Sec. 3. Effective September 20, 2002.)
  142. 14001.5.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    If federal law preempts a provision of this division, that provision does not apply and cannot be enforced.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14001.5. If and to the extent that any provision of this division is preempted by federal law, the provision shall not apply and shall not be enforced. (Added by Stats. 2002, Ch. 734, Sec. 4. Effective September 20, 2002.)
  143. 14002.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    A credit union is defined as a cooperative that serves its members by promoting thrift and savings, providing credit, and operating for their mutual benefit.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14002. A credit union is a cooperative, organized for the purposes of promoting thrift and savings among its members, creating a source of credit for them at rates of interest set by the board of directors, and providing an opportunity for them to use and control their own money on a democratic basis in order to improve their economic and social conditions. As a cooperative, a credit union conducts its business for the mutual benefit and general welfare of its members with the earnings, savings, benefits, or services of the credit union being distributed to its members as patrons. (Amended by Stats. 1984, Ch. 209, Sec. 1.)
  144. 14002.5.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    Credit unions are generally subject to the laws that apply to nonprofit mutual benefit corporations, unless a credit-union-specific rule conflicts or subdivision (b) excludes a provision.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14002.5. (a) Except as provided in subdivision (b), all provisions of law applicable to nonprofit mutual benefit corporations generally (including, but not limited to, the Nonprofit Mutual Benefit Corporation Law (Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code)) shall apply to credit unions. However, whenever any provision of this division applicable to credit unions is inconsistent with any provision of law applicable to nonprofit mutual benefit corporations generally, the provision of this division shall apply and the inconsistent provision of law applicable to nonprofit mutual benefit corporations generally shall not apply to a credit union. (b) Notwithstanding the provisions of subdivision (a), the following provisions of the Corporations Code are not applicable to credit unions: (1) Section 7131. (2) Subdivision (a) of Section 7132. (3) Section 7142. (4) Subdivision (c) of Section 7223. (5) Subdivision (c) of Section 7225. (6) Article 4 (commencing with Section 7240) of Chapter 2 of Part 3 of Title 1. (7) Chapter 11 (commencing with Section 8110) of Part 3 of Division 2 of Title 1. (8) Chapter 16 (commencing with Section 8610) of Part 3 of Division 2 of Title 1. (9) Chapter 17 (commencing with Section 8710) of Part 3 of Division 2 of Title 1. (Added by Stats. 2002, Ch. 734, Sec. 5. Effective September 20, 2002.)
  145. 14003.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    “Commissioner” means the Commissioner of Financial Protection and Innovation.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14003. “Commissioner” means the Commissioner of Financial Protection and Innovation. (Amended by Stats. 2022, Ch. 452, Sec. 114. (SB 1498) Effective January 1, 2023.)
  146. 14004.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    This section defines “impaired capital” for a credit union.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14004. “Impaired capital” means that the losses or projected losses of a credit union are such that the book value of a member’s share is reduced below 100 percent of the monetary amount of that share when initially purchased plus any accumulated dividends. (Added by Stats. 1982, Ch. 716, Sec. 1.)
  147. 14005.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    This section defines when a credit union is “insolvent” unless the division defines the term differently.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14005. Unless otherwise defined in this division, “insolvent” means a credit union has ceased to pay its debts in the ordinary course of business, or cannot pay its debts as they become due, or is insolvent within the meaning of the federal bankruptcy law. (Added by Stats. 1982, Ch. 716, Sec. 2.)
  148. 14006.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    This section defines “credit manager” as a person approved by the board of directors and employed by a credit union to supervise its lending activities.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14006. “Credit manager” means a natural person approved by the board of directors and employed by a credit union to supervise the lending activities of the credit union in accordance with the loan policies established by the board of directors and consistent with the applicable state and federal law and regulations. A credit manager may be but is not required to be a member of the credit union. (Added by Stats. 1982, Ch. 691, Sec. 1.)
  149. 14007.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    This section defines “obligation” for credit union purposes.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Definitions [14000 - 14007] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14007. “Obligation” means any contractual obligation to the credit union for money borrowed or credit extended or guaranteed from its members, including, but not limited to, loans, lines of credit, agreements to extend credit, and lease agreements. (Added by Stats. 1984, Ch. 789, Sec. 1.)
  150. 1401.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A bank account held by or in the name of a married person must be treated for that person’s exclusive benefit, kept free from other persons’ control or liens except a creditor’s, and paid to that person or their order.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1401. A bank account by or in the name of a married person shall be held for the exclusive right and benefit of the person, shall be free from the control or lien of any other person except a creditor, and shall be paid to the person or to the order of the person, and payment so made is a valid and sufficient release and discharge to the bank for the deposit or any part thereof. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  151. 1402.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A multiple-party bank account is governed by Part 2 of Division 5 of the Probate Code.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1402. A bank account that is a multiple-party account as defined in Section 5132 of the Probate Code is governed by Part 2 (commencing with Section 5100) of Division 5 of the Probate Code. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  152. 1403.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Banks must not pay interest on demand deposits, except in the limited cases stated in the section.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1403. No bank, directly or indirectly, by any device whatever, shall pay any interest on any demand deposit except to the extent that the payment of interest on demand deposits is permitted to member banks of the Federal Reserve System or to banks whose deposits are insured by the Federal Deposit Insurance Corporation or any successor federal agency insuring bank deposits. This section shall not apply to any deposit which is payable only at an office of the bank located outside of the states of the United States and the District of Columbia. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  153. 1404.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    The section says broker-related benefits from certain noninterest-bearing accounts go to the broker unless the broker and lender or note owner agree otherwise in writing, and borrowers must receive at least 2% simple interest per year on covered impound account payments.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1404. Notwithstanding Section 10145 of the Business and Professions Code or any other provision of law, but subject to the limitations of Section 854, benefits accruing from the placement in a noninterest bearing account of a financial institution of funds received by a real estate broker who collects payments or provides services in connection with a loan secured by a lien on real property under subdivision (d) of Section 10131 or Section 10131.1 of the Business and Professions Code shall inure to the broker, unless otherwise agreed in writing by the broker and the lender or note owner on the loan. A borrower shall receive at least 2 percent simple interest per annum on impound account payments covered by Section 2954.8 of the Civil Code. For purposes of this section “financial institution” means any institution the business of which is engaging in financial activities as described in Section 1843(k) of Title 12 of the United States Code. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  154. 1405.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    A real estate broker may receive the benefits from interest earned on funds held in an interest-bearing account for an institutional investor, but only if the broker and investor agree in writing for that loan.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1405. (a) Notwithstanding Section 10145 of the Business and Professions Code or any other provision of law, benefits accruing from the placement in an interest bearing account of a financial institution of funds received by a real estate broker, as defined in Section 10131 of the Business and Professions Code, who collects payments or provides services for an institutional investor in connection with a loan secured by commercial real property may inure to the real estate broker, if agreed to in writing by the real estate broker and that institutional investor as to that loan. (b) For purposes of this section, the following definitions shall apply: (1) “Commercial real property” means real estate improved with other than a one-to-four family residence. (2) “Financial institution” means any institution the business of which is engaging in financial activities as described in Section 1843(k) of Title 12 of the United States Code. (3) “Institutional investor” has the meaning set forth in subdivision (i) of Section 50003. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  155. 14050.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. General [14050 - 14053] ( Article 2 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    Most people may not use a name or title containing “credit union,” unless they are authorized by this division. Certain qualifying nonprofit associations may use the phrase in their names.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. General [14050 - 14053] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14050. The use by any person, other than those authorized by this division, of any name or title which contains the phrase “credit union,” is a misdemeanor. Nonprofit associations, which are formed for the mutual benefit and protection of credit unions, by credit unions organized under this division, or under the provisions of the statutes of the United States applicable to credit unions or any nonprofit association formed for the mutual benefit and protection of credit union employees by bona fide employees of credit unions, may use the phrase “credit union” in the name or title designating any such association. (Added by Stats. 1979, Ch. 112.)
  156. 14051.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. General [14050 - 14053] ( Article 2 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    A person must not knowingly make or spread false statements about a credit union’s financial condition; doing so is a misdemeanor.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. General [14050 - 14053] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14051. Any person who willfully and knowingly makes, circulates, or transmits to another or others any statement or rumor, written, printed or by word of mouth, which is untrue in facts and is directly or by inference derogatory to the financial condition or affects the solvency or financial standing of any credit union doing business in this state, or who knowingly counsels, aids, procures, or induces another to start, transmit, or circulate any such statement or rumor, is guilty of a misdemeanor and shall be punished by a fine of not more than one thousand dollars ($1,000) or by imprisonment for not more than one year, or both. (Added by Stats. 1979, Ch. 112.)
  157. 14052.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. General [14050 - 14053] ( Article 2 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    Every credit union has the general powers given to corporations under the state’s Nonprofit Mutual Benefit Corporation Law, unless this division restricts those powers.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. General [14050 - 14053] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14052. In addition to the powers enumerated in this division, every credit union has the general powers conferred upon corporations by the Nonprofit Mutual Benefit Corporation Law of this state unless restricted by this division. (Amended by Stats. 1981, Ch. 714, Sec. 131.)
  158. 14053.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. General [14050 - 14053] ( Article 2 added by Stats. 1979, Ch. 112. )

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    Credit unions must give members timely notices when certain fees are assessed, and starting January 1, 2026, they may not charge more than $14 or the CFPB amount, whichever is lower.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 1. General Provisions [14000 - 14053] ( Chapter 1 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. General [14050 - 14053] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14053. (a) For purposes of this section, the following definitions apply: (1) “Fee” means a nonsufficient funds fee or an overdraft fee. (2) “Nonsufficient funds fee” means a fee resulting from the initiation of a transaction that exceeds the member’s available account balance if the member’s credit union declines to make the payment. (3) “Overdraft fee” means a fee resulting from the processing of a transaction that exceeds a member’s available account balance. (b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements: (A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice. (B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day. (C) The notice shall contain all of the following: (i) The date of the transaction. (ii) The type of transaction. (iii) Whether the transaction was declined or processed. (iv) If applicable, the amount of the overdraft that results from the transaction. (v) If applicable, the amount necessary to return the account to a positive balance. (vi) If applicable, the consequences of not returning the account to a positive balance within a certain timeframe. (vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi). (2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient. (c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower. (Added by Stats. 2024, Ch. 521, Sec. 1. (SB 1075) Effective January 1, 2025.)
  159. 1406.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank must not pay or secure a creditor when the bank is insolvent or acting in contemplation of insolvency, if it is trying to prevent application of its assets or prefer one creditor over another.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1406. (a) In this section: (1) “Creditor” includes, but is not limited to, a depositor. (2) “Insolvency,” when used with respect to a bank, means that the bank is unable to pay its debts as they come due. (b) This section does not apply to any of the following: (1) Any transaction authorized under Section 1463 or 1465. (2) Any transaction made by a bank in the ordinary course of its business. (c) No bank may pay or secure a creditor if the bank does so (1) after committing an act of insolvency or in contemplation of insolvency and (2) with a view to preventing the application of its assets in the manner prescribed in Chapter 7 (commencing with Section 600) of Division 1 or with a view to the preference of one creditor to another. (d) Any transaction made by a bank in violation of this section is void. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  160. 1407.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank may not count an overdraft that has been standing for more than 90 days as an asset.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1407. An overdraft of more than 90 days standing shall not be allowed as an asset of any bank. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  161. 1408.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank may serve as a depositary, paying agent, trustee, or fiscal agent for public funds or securities, even if certain related officials or employees have an interest in the bank.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1408. A bank may act as a depositary, paying agent, trustee, or fiscal agent for the holding or handling of public funds or securities notwithstanding the fact that a member of the legislative body or an officer or employee of the depositor is an officer, employee, or stockholder of such bank, or of a holding company that owns any of the stock of such bank. Such member of a legislative body, or such officer or employee thereof, shall not be deemed “interested in any contract” as that phrase is used in Section 1090 of the Government Code, if his sole interest is the fact that he is an officer, employee, or stockholder of the bank selected to act as such depositary, paying agent or fiscal agent. An officer or employee of a local public agency shall be deemed to have only a “remote interest” in a contract, as that phrase is used in Section 1091 of the Government Code, where such contract is entered into without competitive bidding under a procedure established by law, if his sole interest is that of an officer, director, or employee, of a bank, bank holding company, or savings and loan association with which a party to the contract has the relationship of borrower or depositor, debtor or creditor, and if the conditions of subdivision (a) of Section 1091 of the Government Code are met. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  162. 1409.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A bank account statement becomes finally settled after four years if the depositor has not objected; after that, the depositor cannot question it.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1409. When a statement of account has been rendered by a bank to a depositor accompanied by vouchers, if any, which are the basis for debit entries in such account, such account shall, after the period of four years from the date of its rendition, in the event no objection thereto has been theretofore made by the depositor, be deemed finally adjusted and settled and its correctness conclusively presumed and such depositor shall thereafter be barred from questioning the correctness of such account for any cause. A statement of account within the meaning of this section shall be deemed to have been rendered on a savings or time account when the bank, by making a notation in the depositor’s bank book or in some other manner reasonably calculated to give notice thereof to the depositor indicates that a certain sum is the correct balance of the account. Nothing herein shall be construed to relieve the depositor from the duty now imposed by law of exercising due diligence in the examination of such account and vouchers, if any, when rendered by the bank and of immediate notification to the bank upon discovery of any error therein, nor from the legal consequences of neglect of such duty; nor to prevent the application of subsection (3) of Section 340 of the Code of Civil Procedure to cases governed thereby. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  163. 141.

    ## 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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    This section defines “approved by (or approval of) the shareholders.”

    ## 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. ) ## 141. “Approved by (or approval of) the shareholders” has the meaning set forth in Section 153 of the Corporations Code and shall include approval or ratification by the affirmative vote or written consent of such proportion (including all) greater than a majority of the shares of any class or series as may be provided in the articles, in this division, or in Division 1 (commencing with Section 100), Title 1 of the Corporations Code for all or any specified shareholder action. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  164. 1410.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

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    Banks may not charge for missed or late periodic installment deposits into certain savings accounts, and they must pay interest at no less than the lowest rate paid on other savings deposits.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1410. (a) No bank shall impose any charge on a savings account or on a depositor for the failure of a depositor to deposit, or for the late deposit of, any agreed periodic installment deposit into that account. A bank shall pay interest on savings accounts as to which a depositor has agreed to make periodic installment deposits at a rate of interest per annum that is not less than the lowest rate paid on other types of savings deposits. (b) As used in this section “savings account” means a Christmas club account, a vacation club account, or other similar periodic installment deposit account maintained by a natural person, irrespective of its classification as a savings deposit or time deposit open account for purposes of state or federal law or regulations. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  165. 14100.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

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    Credit unions must be incorporated under the state Nonprofit Mutual Benefit Corporation Law, and the Secretary of State may not file their incorporation papers without the commissioner’s approval.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14100. (a) Credit unions shall be incorporated under the Nonprofit Mutual Benefit Corporation Law of this state. (b) The Secretary of State shall not file the articles of incorporation of a credit union organized pursuant to subdivision (a) unless the approval of the commissioner is endorsed thereon. (c) The Secretary of State shall not file articles of incorporation setting forth a name in which “credit union” or related words appear unless the approval of the commissioner is attached. This section shall not apply to the articles of any corporation subject to the California Credit Union Law on which the approval of the commissioner is endorsed. (Amended by Stats. 2002, Ch. 734, Sec. 6. Effective September 20, 2002.)
  166. 14101.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

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    Every credit union’s articles of incorporation must include specified information, including its name, purpose, service agent, initial directors, and addresses.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14101. The articles of incorporation of every credit union shall set forth the following: (a) The name of the corporation, which shall include the phrase “credit union.” (b) (1) The following statement: The purpose of the corporation is to engage in credit union business and any other lawful activities which are not prohibited to a credit union by applicable laws or regulations. (2) By December 31, 2003, each credit union that immediately prior to the enactment of this section was authorized to operate as a credit union shall amend its articles to comply with the provisions of paragraph (1). Notwithstanding Section 7813.5 of the Corporations Code, the amendment of the articles of a credit union as required by paragraph (1) may be adopted by approval of the board alone. (c) The name and street address in this state of the corporation’s initial agent for service of process in accordance with subdivision (b) of Section 8210 of the Corporations Code. (d) The names and addresses of five or more persons appointed to act as initial directors. (e) The street address of the corporation. (f) The mailing address of the corporation, if different from the street address. (Amended by Stats. 2012, Ch. 494, Sec. 53. (SB 1532) Effective January 1, 2013.)
  167. 14101.2.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

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    The articles must be signed by each named director, acknowledged under the Corporations Code, and filed with the Secretary of State. Corporate existence starts when the articles are filed and continues perpetually unless another law expressly says otherwise.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14101.2. (a) The articles shall be signed by each director named in the articles, acknowledged pursuant to Section 5030 of the Corporations Code and filed in the office of the Secretary of State. (b) Corporate existence shall begin upon the filing of the articles and shall continue perpetually, unless otherwise expressly provided by law. (Amended by Stats. 2002, Ch. 734, Sec. 8. Effective September 20, 2002.)
  168. 14101.4.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

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    Older credit unions may amend their articles to match Section 14101, but they do not have to include an initial service agent or the names and addresses of initial directors.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14101.4. (a) The provisions of Section 14101, except as provided in subdivision (b) of that section, shall not apply to a credit union organized prior to January 1, 1981, but the articles of the credit union shall continue to be governed by the law applicable as of December 31, 1980, until an amendment of its articles pursuant to subdivision (b). (b) Except as provided in subdivision (b) of Section 14101, a credit union organized prior to January 1, 1981, may amend its articles to conform to Section 14101 except that an initial agent for service of process shall not be set forth and the names and addresses of initial directors shall be deleted. The amendment may be adopted by the board of directors alone. (Amended by Stats. 2002, Ch. 734, Sec. 9. Effective September 20, 2002.)
  169. 14101.6.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

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    Credit unions must file an initial and yearly statement with the Secretary of State, and they must keep their agent for service of process information current.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14101.6. (a) Every credit union shall, within 90 days after the filing of its original articles and annually thereafter during the applicable filing period in each year, file, in a form prescribed by the Secretary of State, a statement containing: (1) the name of the credit union and the Secretary of State’s file number; (2) the names and complete business or residence addresses of its chief executive officers, secretary, and chief financial officer; (3) the street address of its principal office, if any; (4) if the credit union chooses to receive renewal notices and any other notifications from the Secretary of State by electronic mail instead of by United States mail, a valid electronic mail address for the credit union or for the credit union’s designee to receive those notices; and (5) the mailing address of the credit union, if different from the street address of its principal office. (b) The statement required by subdivision (a) shall also designate, as the agent of the credit union for the purpose of service of process, a natural person residing in this state or any domestic or foreign business corporation that has complied with Section 1505 of the Corporations Code and whose capacity to act as an agent has not terminated. If a natural person is designated, the statement shall set forth that person’s complete business or residence street address. If a corporate agent is designated, no address for it shall be set forth. (c) For the purposes of this section, the applicable filing period for a credit union shall be the calendar month during which its original articles were filed and the immediately preceding five calendar months. The Secretary of State shall provide a notice to each credit union to comply with this section approximately three months prior to the close of the applicable filing period. The notice shall state the due date for compliance and shall be sent to the last address of the credit union according to the records of the Secretary of State if the credit union has elected to receive notices from the Secretary of State by electronic mail. Neither the failure of the Secretary of State to provide the notice nor the failure of the credit union to receive it is an excuse for failure to comply with this section. (d) Whenever any of the information required by subdivision (a) is changed, the credit union may file a current statement containing all the information required thereby. In order to change its agent for service of process or the address of the agent, the corporation must file a current statement containing all the information required by subdivisions (a) and (b). Whenever any statement is filed pursuant to this section, it supersedes any previously filed statement and the statement in the articles as to the agent for service of process and the address of the agent. (e) An agent designated for service of process pursuant to subdivision (b) may deliver to the Secretary of State, on a form prescribed by the Secretary of State for filing, a signed and acknowledged written statement of resignation as an agent for service of process containing the name of the credit union and Secretary of State’s file number of the credit union, the name of the agent, and a statement that the agent is resigning. Thereupon the authority of the agent to act in such capacity shall cease and the Secretary of State forthwith shall notify the credit union of the filing of the statement of resignation. (f) If a natural person who has been designated agent for service of process pursuant to subdivision (b) dies or resigns or no longer resides in the state, or if the corporate agent for such purpose resigns, dissolves, withdraws from the state, forfeits its right to transact intrastate business, has its corporate rights, powers, and privileges suspended or ceases to exist, the credit union shall forthwith file a new statement designating a new agent conforming to the requirements of subdivision (a). (g) The resignation of an agent may be effective if, on a form prescribed by the Secretary of State containing the name of the credit union and Secretary of State’s file number for the credit union and the name of the agent for service of process, the agent disclaims having been properly appointed as the agent. (h) The Secretary of State may destroy or otherwise dispose of any statement or resignation filed pursuant to this section after it has been superseded by the filing of a new statement. (i) This section shall not be construed to place any person dealing with the credit union on notice of or in any duty to inquire about the existence or content of the statement filed pursuant to this section. (Amended by Stats. 2014, Ch. 834, Sec. 49. (SB 1041) Effective January 1, 2015.)
  170. 14101.8.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

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    A credit union’s article amendment is effective only when the filing is made with the Secretary of State with the commissioner’s approval endorsed, and the credit union must promptly file a certified copy with the commissioner after effectiveness.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14101.8. (a) No amendment of the articles of a credit union 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. The amendment shall become effective upon being filed with the Secretary of State. Promptly after the amendment becomes effective, the credit union shall file with the commissioner a copy of the certificate of amendment or other instrument certified by the Secretary of State. (b) An amendment of the articles set forth in an agreement of merger that requires the approval of the commissioner shall not be subject to the provisions of subdivision (a). An amendment meeting this criteria shall become effective at the time the merger becomes effective, pursuant to this division. (Added by Stats. 2002, Ch. 734, Sec. 10. Effective September 20, 2002.)
  171. 14102.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    A credit union can amend its articles of incorporation if the required board and member vote conditions are met; a name change can be approved by the board alone.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14102. (a) Amendments to the articles of incorporation of any credit union may be adopted by resolution of the board of directors, which is also adopted by a vote of a majority of the members of the credit union present, in person or by proxy, as provided in the credit union’s bylaws, at any regular or special meeting of the members for which notice of the proposed amendments has been given; provided, however, that a minimum vote of at least 10 percent of the entire membership entitled to vote on the question votes in favor of the amendment and those voting in favor of the amendment constitute a majority of the members participating in the vote. (b) The commissioner may approve the amendment according to the resolution adopted by the board of directors if approved by less than 10 percent of the entire membership as provided in this section if the commissioner finds, upon the written and verified application filed by the board of directors, that (1) notice of the meeting called to consider the amendment or the ballot for written vote on the amendment was mailed to each member entitled to vote upon the question, (2) the notice or ballot disclosed the purpose of the meeting or the written vote, (3) the notice or ballot informed the membership that approval of the amendment might be sought pursuant to this section, and (4) a majority of the votes cast upon the question were in favor of the amendment. (c) Notwithstanding subdivision (a) and Section 7812 of the Corporations Code, a credit union may amend its articles of incorporation to change its name with the approval of its board of directors and without the approval of its members. (Amended by Stats. 1998, Ch. 539, Sec. 1. Effective January 1, 1999.)
  172. 14102.2.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    A credit union’s restated articles do not take effect unless the endorsed certificate is filed with the Secretary of State, and the credit union must promptly file a certified copy with the commissioner after effectiveness.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14102.2. (a) No restated articles of a credit union shall become effective unless the certificate setting forth the restated articles, with the commissioner’s approval endorsed thereon, is filed with the Secretary of State. The restated articles shall become effective upon being filed with the Secretary of State. (b) Promptly after the restated articles become effective, the credit union shall file with the commissioner a copy of the certificate setting forth the restated articles, certified by the Secretary of State. (Added by Stats. 2002, Ch. 734, Sec. 11. Effective September 20, 2002.)
  173. 14102.4.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    A credit union’s certificate of correction becomes effective only when filed with the Secretary of State with the commissioner’s approval endorsed on it, and the credit union must then promptly file a certified copy with the commissioner.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14102.4. (a) No certificate of correction of a credit union shall become effective unless the certificate, with the commissioner’s approval endorsed thereon, is filed with the Secretary of State. The certificate of correction shall become effective upon being filed with the Secretary of State. (b) Promptly after the certificate of correction becomes effective, the credit union shall file with the commissioner a copy of the certificate of correction, certified by the Secretary of State. (Added by Stats. 2002, Ch. 734, Sec. 12. Effective September 20, 2002.)
  174. 14102.6.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    A credit union’s certificate of revocation is effective only when filed with the Secretary of State with the commissioner’s approval endorsed on it, and the credit union must then promptly file a certified copy with the commissioner.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14102.6. (a) No certificate of revocation by a credit union shall become effective unless the certificate, with the commissioner’s approval endorsed thereon, is filed with the Secretary of State. The certificate of revocation shall become effective upon being filed with the Secretary of State. (b) Promptly after the certificate of revocation becomes effective, the credit union shall file with the commissioner a copy of the certificate of revocation, certified by the Secretary of State. (Added by Stats. 2002, Ch. 734, Sec. 13. Effective September 20, 2002.)
  175. 14103.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    The credit union’s bylaws must set out how the credit union is run and cover the listed governance matters.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. Incorporation and Bylaws [14100 - 14103] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14103. The bylaws shall prescribe the manner in which the business of the credit union shall be conducted with reference to the following matters: (a) The purpose of the credit union. (b) The qualification for membership. (c) Determination of the month, time, and place of the annual meeting; the manner of conducting meetings; the method by which members shall be notified of meetings; and the number of members which shall constitute a quorum. (d) The authorized number of directors, the number of directors necessary to constitute a quorum, and the powers and duties of officers elected by the directors. (e) The membership, powers, and duties of the supervisory or audit committee, as applicable. (f) The membership, powers, and duties of the credit committee or if applicable, the general powers, responsibilities, and duties of the credit manager. (g) The manner in which the bylaws may be amended. (Amended by Stats. 2017, Ch. 561, Sec. 57. (AB 1516) Effective January 1, 2018.)
  176. 1411.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Banks may not use setoff to leave less than $1,000 across a customer’s demand deposit accounts, and they must give a written notice the next day.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1411. (a) For the purposes of this section: (1) “Customer” means one or more natural persons. (2) “Debt” means an interest-bearing obligation or an obligation which by its terms is payable in installments, which has not been reduced to judgment, arising from an extension of credit to a natural person primarily for personal, family, or household purposes, and does not mean a charge for bank services or a debit for uncollected funds or for an overdraft of an account imposed by a bank on a deposit account. (b) A bank is limited in exercising any setoff for a debt claimed to be owed to the bank by a customer in that a setoff shall not result in an aggregate balance of less than one thousand dollars ($1,000) as shown on the records of the bank for all demand deposit accounts maintained by a customer with the bank or any branch thereof. (c) Not later than the day following the exercise of any setoff with respect to a deposit account for any debt claimed to be owed to the bank by a customer, the bank shall deliver to each customer personally or send by first-class mail postage prepaid to the address of each customer as shown on the records of the bank a written notice in at least 10-point type containing the following: (1) A statement that the bank has set off a debt or a portion thereof against the customer’s deposit account, identifying the account, and giving the respective balances before and after the setoff. (2) A statement identifying the debt set off against the account and giving the respective balances due before and after the setoff. (3) A statement that if the customer claims that the debt has been paid or is not now owing, or that the funds in the deposit account consist of moneys expressly exempt pursuant to Chapter 4 (commencing with Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, and listed in the notice, the customer may execute and return the notice to the bank by mail at the address shown or personally to the bank branch where the customer’s account is maintained not later than 20 days after the date of mailing or personal delivery. (4) A statement that if the notice is executed and returned, the bank may file an action in court to collect the debt; that if a lawsuit is filed, the customer will be notified and have an opportunity to appear and defend; and that if the bank is successful, the customer will be liable for court costs, and attorney’s fees, if the debt so provides. (5) A response form in at least 10-point type containing substantially the following: “The debt described in the Notice of Setoff received from the bank is ____ is not ____ my debt or the debt of another person in whose name the account is maintained. “I claim that the debt: has been paid. is not now owing. is not subject to setoff because the money in the account is: Paid earnings (CCP 704.070) Proceeds from execution sale of or insurance for loss of a motor vehicle (CCP 704.010) Proceeds from execution sale of household furnishings or other personal effects (CCP 704.020) Relocation benefits (CCP 704.180) Life insurance proceeds (CCP 704.100) Disability and health insurance benefits (CCP 704.130) Workers’ compensation benefits (CCP 704.160) Unemployment or strike benefits (CCP 704.120) Retirement benefits including, but not limited to, social security benefits (CCP 704.080, 704.110, 704.115) Public assistance benefits including welfare payments and supplemental security income (SSI) or charitable aid (CCP 704.170) Proceeds from sale of or insurance for damage or destruction of a dwelling (CCP 704.720, CCP 704.960) Proceeds from execution sale of or insurance for loss of tools of a trade (CCP 704.060) Award of damages for personal injury (CCP 704.140) or wrongful death (CCP 704.150) Financial aid paid by an institution of higher education to a student for expenses while attending school (CCP 704.190) “I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Date: Signed: ” (Customer) (d) If the response form described in subdivision (c) executed by the customer is received by the bank not later than 20 days after the date of mailing or personal delivery of the written notice, the amount of the setoff for any debt claimed to be owed to the bank by a customer, and any bank service charges resulting from the setoff, shall be reversed and such amount shall be credited to the deposit account not later than the end of the business day following receipt of such executed response form. (e) The limitations provided in this section do not apply to a deposit account, other than a demand deposit account, in which the bank has a security interest expressed by a written contract as collateral for the debt owing to the bank by the customer. (f) The limitations provided in this section do not apply when a customer previously has authorized a bank in writing to periodically debit a deposit account as the agreed method of payment of the debt. (g) The limitations provided in this section shall apply only to the exercise by a bank a setoff with respect to debts claimed to be owing to it by customers on or after July 1, 1976. (h) Nothing in this section shall prejudice a person’s right to assert exemptions under Chapter 4 (commencing with Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, or to assert a claim or defense as to the validity of the debt, in a judicial proceeding. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  177. 1415.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    Banks may sponsor or join a savings promotion only if the promotion meets listed fairness and fee conditions.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 1. Depositors [1400 - 1415] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1415. (a) For purposes of this section, the following definitions apply: (1) “Nonqualifying account” means a deposit account, other than a demand deposit account, that is not a qualifying account. (2) “Qualifying account” means a deposit account, other than a demand deposit account, through which a bank’s depositors may obtain chances to win prizes in a savings promotion. (3) “Savings promotion” means a contest or promotion to encourage savings deposits that is sponsored by one or more banks, or by a banking trade association or its subsidiary in conjunction with one or more banks, and in which bank depositors are offered a chance to win designated prizes. (b) A bank may sponsor or participate in a savings promotion if all of the following requirements are satisfied: (1) Bank depositors are not required to pay any fee or otherwise provide any consideration in order to enter the savings promotion. (2) All material terms of, and fees charged by a bank in connection with, a qualifying account are comparable to those of comparable nonqualifying accounts offered by the bank. (3) Each entry in the savings promotion has an equal chance of winning. (4) Participants in the savings promotion are not required to be present at a prize drawing in order to win. (c) For purposes of this section, a depositor’s deposit of at least a specified amount of money in a qualifying account, which is required in order to enter the savings promotion, is not consideration if the interest rate associated with the qualifying account is not reduced, as compared to comparable nonqualifying accounts offered by the bank, to account for the possibility of winning a prize. (d) A savings promotion offered by a bank shall not be considered a lottery within the meaning of Section 319 or 319.3 of the Penal Code, or a raffle within the meaning of Section 320.5 of the Penal Code. (Added by Stats. 2018, Ch. 847, Sec. 1. (SB 1055) Effective January 1, 2019.)
  178. 14150.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    A credit union may not issue membership shares, fund certificates, or other securities until it applies for and gets a certificate from the commissioner to act as a credit union.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14150. No membership shares, certificates for funds or other securities shall be issued by any credit union until it has applied for and obtained from the commissioner a certificate authorizing it to act as a credit union. (Added by Stats. 1979, Ch. 112.)
  179. 14151.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    An application for a certificate to act as a credit union must be submitted in writing to the commissioner and must include the information the commissioner requires.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14151. Applications for a certificate to act as a credit union shall be made in writing to the commissioner, setting forth such information as the commissioner requires. The application shall be verified by one or more officers of the credit union authorized by its board of directors. (Added by Stats. 1979, Ch. 112.)
  180. 14152.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    An applicant must pay the commissioner a $5 filing fee when filing an application to operate as a credit union.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14152. At the time of filing an application to operate as a credit union, the applicant shall pay to the commissioner a filing fee of five dollars ($5). (Added by Stats. 1979, Ch. 112.)
  181. 14153.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    When an application for a certificate to act as a credit union is filed, the commissioner must examine it and the filed papers; the commissioner may also investigate further if advisable.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14153. Upon the filing of the application for a certificate to act as a credit union, the commissioner shall examine the application together with the other papers and documents filed therewith. The commissioner may make any further investigation of the applicant and its affairs that he deems advisable. (Added by Stats. 1979, Ch. 112.)
  182. 14154.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    If the commissioner finds the applicant meets this division and no denial reasons exist under Section 14155, the commissioner must issue and deliver a certificate to let the applicant do business under this division.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14154. 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 14155, the commissioner shall issue and deliver a certificate to the applicant to engage in business in accordance with the provisions of this division. (Amended by Stats. 1980, Ch. 974, Sec. 3.)
  183. 14155.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    The commissioner may deny a credit union application or field-of-membership expansion after notice and an opportunity to be heard if any listed grounds are met.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14155. Upon reasonable notice and opportunity to be heard, the commissioner may deny the application for a certificate to act as a credit union or an expansion of the field of membership of an existing credit union for any of the following reasons: (a) The field of membership of the applicant is contrary to the principles of organizing credit unions, including principles of organizing credit unions based on common bond of occupation, association, or groups within a well-defined neighborhood, community or rural district. (b) A false statement of a material fact has been made in the application for certificate. (c) Any officer, director, or committee 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. (d) The applicant or any officer, director, or committee member of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of a foreign jurisdiction. (e) The number of persons eligible for membership is less than 500. (f) The applicant’s showing as to the economic feasibility of the proposed credit union is inadequate. Notwithstanding anything to the contrary, nothing shall prohibit a credit union from admitting to membership any corporation formed to provide services to credit unions or to credit union members in which the credit union holds shares pursuant to Sections 14650 and 14651 and any limited liability company formed to provide services to credit unions or to credit union members in which the credit union holds membership or economic interests pursuant to Section 14651. (Amended by Stats. 1998, Ch. 539, Sec. 1.4. Effective January 1, 1999.)
  184. 14156.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    A certificate issued under this division stays valid until it is surrendered and accepted by the commissioner, or until the commissioner suspends or revokes it.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 2. Formation [14100 - 14156] ( Chapter 2 added by Stats. 1979, Ch. 112. ) ## ARTICLE 2. Certificate to Act as a Credit Union [14150 - 14156] ( Article 2 added by Stats. 1979, Ch. 112. ) ## 14156. Each certificate issued under this division remains in full force and effect until surrendered and accepted by the commissioner, or until suspended or revoked by the commissioner. (Amended by Stats. 1989, Ch. 516, Sec. 1.)
  185. 1420.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

    Verify source ↗

    This section defines “depository institution” and “deposit account” for the article.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1420. As used in this article: (a) “Depository institution” means any of the following: (1) Any insured bank as defined in Section 3 of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.) or any bank which is eligible to make application to become an insured bank under Section 5 of the act. (2) A mutual savings bank as defined in Section 3 of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.) or any bank which is eligible to make application to become an insured bank under Section 5 of the act. (3) A savings bank as defined in Section 3 of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.) or any bank which is eligible to make application to become an insured bank under Section 5 of the act. (4) An insured credit union as defined in Section 101 of the Federal Credit Union Act (12 U.S.C. Sec. 1751 et seq.) or any credit union which is eligible to make application to become an insured credit union pursuant to Section 201 of that act. (5) Any member as defined in Section 2 of the Federal Home Loan Bank Act (12 U. S.C. Sec. 1421 et seq.). (6) Any insured institution as defined in Section 401 of the National Housing Act (12 U.S.C. Sec. 1701 et seq.) or any institution which is eligible to make application to become an insured institution under Section 403 of that act. (b) “Deposit account” means an account in a depository institution on which the account holder is permitted to make withdrawals from time to time in person by negotiable or transferable instrument, payment orders of withdrawal, telephone transfers, or other similar items for the purpose of making payments or transfers to third persons or others. The term includes demand deposits, negotiable order of withdrawal draft accounts, savings deposits subject to automatic transfers, share draft accounts, and all savings deposits and share accounts, other than time deposits. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  186. 14200.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    The commissioner has the power to supervise and examine all credit unions covered by this division.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14200. The powers of supervision and examination of all credit unions organized under the provisions of this division are vested in the commissioner. (Repealed and added by Stats. 1979, Ch. 112.)
  187. 14200.1.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    The Office of Credit Unions is established within the Department of Financial Protection and Innovation, and it is responsible for executing California laws relating to credit unions and credit union business.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14200.1. There is in the Division of Financial Institutions of the Department of Financial Protection and Innovation the Office of Credit Unions. The Office of Credit Unions has charge of the execution of the laws of this state relating to credit unions or to the credit union business. (Amended by Stats. 2022, Ch. 452, Sec. 115. (SB 1498) Effective January 1, 2023.)
  188. 14200.2.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    The Deputy Commissioner of the Office of Credit Unions administers California laws on credit unions under the Senior Deputy Commissioner’s direction and on behalf of that office.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14200.2. The chief officer of the Office of Credit Unions is the Deputy Commissioner of the Office of Credit Unions. The Deputy Commissioner of the Office of Credit Unions, under the direction and on behalf of the Senior Deputy Commissioner of Financial Protection and Innovation for the Division of Financial Institutions, shall administer the laws of this state relating to credit unions or the credit union business. The Deputy Commissioner of the Office of Credit Unions shall be appointed by the Governor and shall hold office at the pleasure of the Governor. The Deputy Commissioner of the Office of Credit Unions shall receive an annual salary as fixed by the Governor. (Amended by Stats. 2022, Ch. 452, Sec. 116. (SB 1498) Effective January 1, 2023.)
  189. 14201.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    The commissioner may establish or waive rules and regulations needed to carry out this division.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14201. The commissioner may establish or waive such rules and regulations as may be reasonable or necessary to carry out the purposes and provisions of this division. (Amended by Stats. 1983, Ch. 263, Sec. 1.)
  190. 14202.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

    Verify source ↗

    The commissioner may issue a regulation letting covered credit unions do activities that are allowed for U.S. credit unions, and the regulation expires on a set date.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14202. The commissioner may by regulation authorize credit unions organized under the provisions of this division to engage in any activity authorized by law or regulation for credit unions organized under the laws of the United States. Any such regulation shall expire on the first day of January two years following the end of the calendar year in which such regulation was promulgated. (Amended by Stats. 1982, Ch. 270, Sec. 1.)
  191. 14203.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

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    A credit union must, when the commissioner requests it, provide an authorization to examine certain financial records.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14203. Upon request of the commissioner, a credit union shall furnish to the commissioner an authorization for examination of financial records of any capital funds, undivided profits, and reserve funds, maintained in a financial institution, in accordance with the procedures set forth in Section 7473 of the Government Code. (Amended by Stats. 1980, Ch. 1097, Sec. 2.)
  192. 14204.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

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    If the commissioner finds a credit union is violating the rules, insolvent, undercapitalized, or operating unsafely, the commissioner may order it to stop the practices or suspend new business, and the credit union may request a hearing within 10 days.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14204. If the commissioner upon any examination, or from any report made to the commissioner, finds any credit union is violating the provisions of this division or the rules made pursuant to this division, or has impaired capital, or is insolvent, or is conducting its business in an unsafe or unauthorized manner, the commissioner may notify the credit union to, and the credit union shall, cease these practices. The commissioner may notify the credit union to, and the credit union shall, temporarily suspend or entirely cease the transaction of any new business or the portion thereof as is ordered by the commissioner. Within 10 days from the date of a notification or order pursuant to this section, the credit union may request a hearing. Neither the request for a hearing nor the hearing itself shall stay the notification or order issued by the commissioner under this section. (Amended by Stats. 1996, Ch. 1064, Sec. 571. Effective January 1, 1997. Operative July 1, 1997.)
  193. 14205.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

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    The commissioner may suspend or revoke a certificate after reasonable notice and a hearing if the credit union violated the division, the commissioner’s rules, or if the original application would likely have been denied because of a fact or condition.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14205. The commissioner may, upon reasonable notice and opportunity to be heard, suspend or revoke any certificate if the commissioner finds that the credit union has violated any provisions of this division or any rule or regulation of the commissioner made pursuant to this division, or if any fact or condition exists which, if it had existed at the time of the original application for certificate, reasonably would have warranted the commissioner in refusing originally to issue such certificate. (Amended by Stats. 1980, Ch. 974, Sec. 5.)
  194. 14207.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

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    In any proceeding under this law, the person claiming an exemption or exception from a definition must prove it.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14207. 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. 1979, Ch. 112.)
  195. 14208.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

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    The commissioner may, after notice and a hearing, censure, suspend (up to 12 months), or bar certain credit union personnel from employment or management if specified findings are made.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14208. The commissioner may, after appropriate notice and opportunity for hearing, by order censure, or suspend for a period not exceeding 12 months, or bar from any position of employment or management of, any credit union, any officer, director, or employee of, or person performing similar functions for, a credit union, if the commissioner finds that: (1) The censure, suspension or bar is in the public interest, that the person has committed a violation of this division or rule of the commissioner, and that the violation was either willful or caused, or will probably cause, material damage to the credit union or any member thereof. (2) Any officer, director, employee of, or person performing similar functions for a credit union has been convicted of, or pleaded nolo contendere to, a crime, or has been held liable in a civil action by final judgment if the crime or civil action involved fraud, embezzlement, fraudulent conversion or misappropriation of property. (Amended by Stats. 1982, Ch. 716, Sec. 4.)
  196. 14209.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

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    The commissioner may sue in superior court to stop violations of this division or related rules and orders, and the court can grant injunction-style relief and appoint a receiver or conservator.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14209. (a) Whenever it appears to the commissioner that any person has engaged in or is about to engage in any acts or practices constituting a violation of any provision of this division or any rule or order adopted pursuant to this division, the commissioner may in the commissioner’s 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, restraining order, or writ of mandate shall be granted and a receiver or conservator, which may include the commissioner, may be appointed for the defendant or the defendant’s assets, and any other ancillary relief may be granted as appropriate. A receiver or conservator appointed by the court pursuant to this section may, with the approval of the court, exercise all of the powers of the defendant’s officers, directors, trustees, or persons who exercise similar powers and perform similar duties, including the powers expressly authorized by subdivision (b) of Section 14300. (b) If the commissioner determines it is in the public interest, the commissioner may include in any action authorized by subdivision (a), 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 court shall have jurisdiction to award the additional relief. (Repealed and added by Stats. 1990, Ch. 1202, Sec. 2.)
  197. 1421.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A depository institution must give customers written notice of its delayed-availability policy before opening a deposit account, and must give additional conspicuous or specific notice in the ways described for deposit slips, ATM envelopes, or deposits that are not immediately available.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1421. (a) Prior to opening a deposit account a depository institution shall provide a written disclosure to the potential customer of its general policy with respect to when a customer may withdraw funds deposited by check or similar instrument into the customer’s deposit account. (b) A depository institution shall furnish its customers preprinted deposit slips, envelopes for automatic teller machine deposits, or other individual notice bearing a conspicuous summary statement of its general policy with respect to when a customer may withdraw funds deposited by check or similar instrument into the customer’s deposit account; and, in the case of a particular deposit by check or similar instrument into a deposit account for which funds may not be immediately available for withdrawal, provide specific notice of the time the customer may withdraw such funds. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)
  198. 14211.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

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    When deciding whether a credit union’s capital is adequate, the commissioner must consider listed factors.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14211. In determining for purposes of this division whether the capital of any credit union is adequate, the commissioner shall consider the following: (a) The nature and volume of the business and the proposed business of the credit union. (b) The amount, nature, quality, and liquidity of the assets of the credit union. (c) The amount and nature of the liabilities, including contingent liabilities, of the credit union. (d) The history of, and prospects for, the credit union to earn and retain income. (e) The nature and scope of the operations of the credit union. (f) The performance of the management of the credit union. (g) Any other factors as are, in the opinion of the commissioner, relevant. (Added by Stats. 2002, Ch. 734, Sec. 15. Effective September 20, 2002.)
  199. 14212.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. )

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    The commissioner may call a credit union board meeting when needed, and the meeting must be noticed, held at an allowed location, and paid for by the credit union.

    ## Financial Code - FIN ## DIVISION 5. CREDIT UNIONS [14000 - 16906] ( Division 5 repealed and added by Stats. 1979, Ch. 112. ) ## CHAPTER 3. Administration and Powers of the Commissioner [14200 - 14384] ( Chapter 3 added by Stats. 1979, Ch. 112. ) ## ARTICLE 1. General [14200 - 14212] ( Article 1 added by Stats. 1979, Ch. 112. ) ## 14212. (a) The commissioner, whenever in his or her opinion such action is necessary or appropriate to carry out his or her duties, may call a meeting of the board of directors of a credit union. (b) A meeting of the board of a credit union called by the commissioner shall be held upon four days’ notice by first class mail or 24 hours’ notice delivered personally or by telephone. The notice shall be given by the commissioner or, if the commissioner so orders, by an officer of the credit union. (c) A meeting of the board of a credit union called by the commissioner shall be held at the head office of the credit union, the department office closest to the head office of the credit union, or any other place within a reasonable distance to the head office of the credit union as may be designated by the commissioner and specified in the notice of that meeting. (d) The expenses of the credit union pertaining to a meeting of the board of a credit union called by the commissioner shall be paid by the credit union. (Added by Stats. 2010, Ch. 532, Sec. 46. (AB 1268) Effective January 1, 2011.)
  200. 1422.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. )

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    A depository institution must start computing interest on check deposits no later than the date it gets provisional credit, and it is not required to pay interest on check deposits that are returned unpaid.

    ## Financial Code - FIN ## DIVISION 1.1. BANKING [1000 - 1910] ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. ) ## CHAPTER 12. Deposits [1400 - 1440] ( Chapter 12 added by Stats. 2011, Ch. 243, Sec. 3. ) ## ARTICLE 2. Disclosure of Delayed Availability Policy [1420 - 1429] ( Article 2 added by Stats. 2011, Ch. 243, Sec. 3. ) ## 1422. For the purposes of computing the amount of interest or dividends payable with respect to an interest-bearing deposit account, a depository institution shall not delay beginning to compute interest on funds deposited by check or similar instrument to such an account beyond the date on which that depository institution receives provisional credit for the check or similar instrument. However, the payment of interest with respect to funds deposited by check or similar instrument which is returned unpaid shall not be required. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)

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