87-2

April 2, 1987

Dear Mr: ________:
This is in reply to your letter of February 27, 1987.
Your letter accurately reflects our telephone conversation of February 23, 1987, and at the present time the legal staff of the State Banking Department would not recommend that the Department take enforcement action on account of the activities described.
If we may be of further assistance, please feel free to contact us.
Very truly yours,
HOWARD GOULD
Superintendent of Banks
By
JAMES F. CARRIG
Chief Counsel
JFC:aee

February 27, 1987

James F. Carrig, Esquire
Re: Representative Office Collection Activities
Dear Mr. Carrig:
This will confirm our telephone conversation of February 23, 1987, during which we discussed whether the California representative office of a foreign (other state) bank may engage in collection activities in California with respect to loans made by the bank. I understood the substance of your remarks to me during our telephone conversation to be as follows:
The State Banking Department (The “Department”) would not object if personnel at a foreign (other state) bank’s California representative office were to engage in collection activities–including telephone calls, visits, collection notice mailings and investigations to determine where borrowers live–with regard to loans made by the bank, so long as the payments for such loans were received out of state. You noted that the Department did not object to California representative office personnel engaging in preliminary investigation and processing activities with respect to loans made by foreign (other state) banks to California residents, so long as the loans are underwritten and funded outside of California. You then drew an “back-end” activities such as the collection activities listed above. You concluded that since the collection activities listed above were analogous to the preliminary lending activities which, according to the Department’s position, representative offices may perform, the Department would not object if the California representative office of a foreign (other state) bank were to engage in such collection activities.
* * *
If your understanding of our conversation is in any way at variance with the account provided above, please inform me at your earliest convenience.
Thank you for your consideration of this matter.
Very truly yours,