Monthly Bulletin - August 2002 | The Department of Financial Protection and Innovation

State of California

Gray Davis, Governor	Business Transportation and Housing Agency Maria Contreras-Sweet, Secretary
Department of Financial Institutions	http://www.dfi.ca.gov
	Monthly Bulletin
Volume 6, Number 2	August, 2002

Seven Defendants Prosecuted on Charges of Illegal Transmission of Money Abroad

The California Attorney General is prosecuting seven defendants for illegal transmission of money abroad in the Los Angeles County Superior Court. The defendants were arrested by the Los Angeles Police Department in April 2002, and the California Attorney General filed criminal felony complaints against them for violation of Financial Code section 1823 in July 2002. The preliminary hearing is currently scheduled for September 25, 2002. If convicted on the felony counts for violation of Financial Code section 1823, each defendant faces a potential prison term of 16 months to 36 months. The seven defendants were not licensed by the Department to transmit money abroad.

The Department assisted the Los Angeles Police Department after they contacted us by issuing warning letters and making referrals. The Department continues to encourage and support criminal investigations and enforcement against alleged illegal money transmitters in California. The Department receives information about unlicensed money transmission activity from time to time, and initiates enforcement action against those persons who are apparently operating as unlicensed money transmitters by sending out a cease and desist warning letter. In addition, the Department will refer that person for criminal and civil prosecution to appropriate federal and state officials in accordance with Financial Code sections 260 and 262.

Notice of Assessment Rates for Banks, Foreign Banks and Trust Companies

The base rate will increase slightly from $0.98 to $1.038585. This rate reflects the need to maintain a prudent level of reserves in the Banking Fund. Invoices were mailed to each licensee on August 30, 2002 and become delinquent if not paid by September 20, 2002.

Subsequently, it came to the attention of the Department of Financial Institutions that a clerical error occurred in preparing the 2002 annual assessments sent to all California state commercial banks and trust companies as well as all foreign (other nation) banks licensed to maintain agencies or branch offices in California. Please be advised that the order dated August 22, 2002, nunc pro tunc July 1, 2002, was rescinded on August 27. That order set a base assessment rate of $1.03 and established the date the total resources were determined as March 31, 2002. The letter dated August 30, which accompanied the rescinded order quoted that incorrect assessment rate.

On August 27, 2002, the Commissioner of Financial Institutions executed a new Order that set the base assessment rate at $1.038585. In addition, the new Order set June 30, 2002, as the date the total resources were determined for purposes of the assessment. The assessment invoice that accompanied the earlier mailing properly reflects the calculations set forth in the new Order. The assessment invoice states the correct amount to be paid by each bank. The assessment is to be paid in full by September 20, 2002. We apologize for any inconvenience the error may have caused the Department’s licensees.

Notice of Assessment for Industrial Banks

The assessment rate for industrial banks this year is $0.80231 compared to $0.7641 for the fiscal year ended June 30, 2001. Invoices will be mailed to each licensee on August 30, 2002 and become delinquent if not paid by September 20, 2002. Insurance premium finance companies will be assessed on November 30, 2002.

Notice of Assessment for State Chartered Credit Unions

The 2001-02 assessment rate for credit unions is unchanged from last year’s rate of $0.747282343. Invoices will be mailed to each licensee on August 30, 2002 and become delinquent if not paid by September 20, 2002.

Notice of Assessment for State Chartered Savings and Loan Associations

The 2001-02 assessment rate for savings and loan associations is unchanged from last year’s rate of $0.495100. Invoices will be mailed to each licensee on August 30, 2002 and become delinquent if not paid by September 20, 2002

Notice of Assessment for Local Agency Depositories

The 2001-02 assessment rate for local agency depositories is unchanged from last year’s rate of $.00007121. Invoices will be mailed to each licensee on August 30, 2002 and become delinquent if not paid by September 20, 2002.

Financial Institutions May Seek Federal Sponsorship of GETS Cards

The Federal Deposit Insurance Corporation (FDIC) published a document that explains how financial institutions may seek federal sponsorship for the issuance of Government Emergency Telecommunications Service (GETS) Cards. The Office of the Comptroller of the Currency and the Office of Thrift Supervision had released their documents in July. The GETS Card Program is a telecommunications voice service that provides emergency access and priority processing for voice communications services in the local and long-distance segments of the publicly switched network, FDIC said. Generally, financial institutions that perform national security or emergency preparedness functions essential to the maintenance of the nation’s economic posture during any national or regional emergency will qualify for program sponsorship. To learn more, go to:

http://www.fdic.gov/news/news/financial/2002/fil0284.html

Commissioner Meets with FDIC Ombudsman

Commissioner Donald Meyer and DFI staff recently met with the FDIC’s Ombudsman Webster Cottrell, Deputy Ombudsman Leslie Crawford, and Regional Ombudsman Mark Randall. The mission of the Office of the Ombudsman is to be an effective, neutral, and confidential resource and liaison for the banking industry and the general public; to facilitate the resolution of problems and complaints in a fair, impartial and timely manner; to provide prompt and meaningful feedback; and to influence positive change at the FDIC. To reach the Office of the Ombudsman, call 1-877-ASK-FDIC (877-275-3342), and press Option 3 on the FDIC Central Call Center menu. To talk to the Regional Ombudsman for our region directly, call Mark Randall at 415-808-8182.

Errata

The July 2002 notice regarding the provisions of Division 1.6 of the Financial Code becoming effective for loans originated on, or after, July 1, 2002 stated that the provisions commenced with Section 4900 of the Code. Please note that Division 1.6 of the Code commences with Section 4970. We regret any inconvenience caused by this error.

Monthly Activity Report

Commercial Bank Activity

Conversion to State Charter

Nara Bank, National Association, Los Angeles, to convert to a state-chartered bank under the name Nara Bank
Filed: 8/20/02

Merger

Cerritos Valley Bank, Artesia, with and into Bank of Orange County, Orange
Effected: 8/15/02

Upland Bank, Upland, with and into Pacific Western National Bank, Santa Monica
Effected: 8/22/02

Purchase of Partial Business Unit

Gateway Business Bank, Lakewood, to acquire the Laguna Hills Branch of eosbank, San Mateo
Approved: 8/19/02

Security Business Bank of San Diego (In Organization), San Diego, to acquire the San Diego Branch of Manufacturers Bank, Los Angeles
Filed: 8/20/02

Acquisition of Control

First Financial Holding Company, Ltd, to require control of First Commercial Bank (USA), Alhambra
Filed: 5/2/02
Approved: 7/19/02

Shawn L. Devlin, to acquire control of River City Bank, Sacramento
Filed: 5/23/02
Approved: 8/12/02

Industrial Bank Activity

Acquisition of Control

Affinity Bank Holdings, Inc. and Stephen Adams, to acquire control of Southern Pacific Bank, Torrance
Approved: 7/31/02

Premium Finance Company Activity

New Premium Finance Company

G.A.S. Premium Finance, Inc.
251 North Brand Blvd., Suite 201, Glendale, Los Angeles County
Opened: 8/14/02

Revocation of License

1st Choice Premium Finance Corp.
690 Knox Street, Suite 100, Torrance, Los Angeles County
Effected: 7/31/02

APFC. Inc.
21731 Ventura Boulevard, Suite 340, Woodland Hills, Los Angeles County
Effected: 7/31/02

INAC Corp. of California
10860 Gold Center Drive, Rancho Cordova, Sacramento County
Effected: 7/31/02

Western Agency Services, Inc.
21731 Ventura Boulevard, Suite 340, Woodland Hills, Los Angeles County
Effected: 7/31/02

Voluntary Surrender of License

Beacon Finance Corporation
21731 Burbank Boulevard, Suite 340, Woodland Hills, Los Angeles County
Effected: 8/20/02

Foreign (Other Nation) Bank Activity

Discontinuance of Offices

Arab Banking Corporation (B.S.C.)
555 South Flower Street, Los Angeles, Los Angeles County (Representative Office)
Filed: 8/5/02
Approved: 8/12/02

Foreign (Other State) Bank Activity

New Facility

The Northern Trust Company of Connecticut (Facility – Uninsured Bank)
580 California Street, Suite 1300, City and County of San Francisco
Filed: 7/2/02
Approved: 8/20/02

Sunrise Bank of Arizona (Facility – Insured Bank)
4695 MacArthur Court, 11th Floor, Newport Beach, Orange County, 92660
Notified: 8/20/02

Discontinuance of Facility

JPMorgan Chase Bank (Facility – Insured Bank)
1800 Century Park East, Suite 400, Los Angeles, Los Angeles County
Notified: 8/12/02

Credit Union Activity

Merger

Central Valley Credit Union, Modesto, into MOCSE Central Valley Federal Valley Union, Modesto
Effected: 5/13/02

Sharp Federal Credit Union, San Diego, into Cabrillo Credit Union, San Diego
Filed: 8/9/02

Field of Membership

Fifteen credit unions received approvals to add 97 new fields of membership, and one credit union received denial to add one new field of membership during July 2002.

Bylaw Amendments

Two credit unions received approvals for 3 bylaw amendments during July 2002.

Transmitter of Money Abroad Activity

New Transmitters

PayPal, Inc.
Approved: 8/20/02