Department of Business Oversight - Monthly Bulletin

Monthly Bulletin – January 2020

Volume 7, Number 6

Monthly Bulletin

Governor Newsom Proposes to Revamp DBO with Stronger Consumer Financial Protections and Enforcement Team

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Governor Gavin Newsom has proposed a $44 million plan to modernize and revamp the Department of Business Oversight (DBO) with added staff and authority to cement its position as a premier financial regulator and national model for consumer protection.

The proposed California Consumer Financial Protection Law would give the DBO expanded enforcement powers to protect California consumers from the regulatory retreat by federal agencies, most notably the Consumer Financial Protection Bureau (CFPB). Modeled after the CFPB, the new law is also designed to promote innovation, clarify regulatory hurdles for emerging products, and increase education and outreach for vulnerable groups.

The governor’s proposal would rename the DBO the Department of Financial Protection and Innovation and give the department new regulatory powers to protect consumers from unfair, deceptive, or abusive practices committed by anyone offering financial services or products to Californians.

The new authority would extend to a group of financial services not currently subject to the department’s regulatory oversight. In addition, the governor’s proposal would:

  • Create a new Division of Consumer Financial Protection to supervise those financial services not now regulated by the department. The new division would include a market monitoring and research arm, and expanded consumer outreach targeted to vulnerable populations such as students, new Californians, military servicemembers, and senior citizens.
  • Create an Office of Financial Technology Innovation, based in San Francisco, to encourage and keep the departmen  outreach targeted to vulnerable populations such as students, new Californians, military servicemembers, and senior citizens. t abreast of emerging financial products and services. As one of its first tasks, the office would study and assess a state regulatory scheme for virtual currencies.
  • Promote innovations by amending the Financial Code to make California’s banking ecosystem a more viable option for new entrants.
  • Establish a new consumer protection ombudsperson to assist the public and other stakeholders.

The new activities would be funded for the first three years from a DBO reserve fund that is the result of prior settlements, with no impact on California taxpayers or licensees.  A summary of the proposal is posted to the DBO website.

Senior Deputy Commissioner Scott Cameron Retires

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Senior Deputy Commissioner Scott D. Cameron has retired from state service after more than 35 years. Governor Jerry Brown appointed Scott as the Senior Deputy Commissioner of the DBO’s Division of Financial Institutions on May 5, 2015. In that position, Scott supervised the Banking, Credit Union, and Money Transmitter divisions.

Before the DBO, Scott worked for the former Department of Financial Institutions and the former state Banking Department. He began his career as a Bank Examiner in Los Angeles and was promoted to Senior Bank Examiner in 1992.

Scott served as a Financial Institutions Supervisor in the Los Angeles office prior to his promotion in 1999 to Assistant Deputy Commissioner of Banking in the Sacramento office. In 2005, Scott was promoted to Northern California Regional Deputy Commissioner of Banking and became the Deputy Commissioner/Chief Examiner of the Banking Division in 2010.

Scott earned his Bachelor of Science from California State University, Los Angeles, in Industrial Technology/Aviation Administration and is a Certified Examinations Manager.

With his retirement, Scott is looking forward to converting his 1934 Ford sedan into a hotrod. He purchased it in 1994 and has been rebuilding it from ground up – chopping off the top, installing a new motor and drivetrain, and reinforcing the frame.

New Public Bank Law in California

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Assembly Bill 857, which took effect on January 1, 2020, creates a process for a local government to establish a public bank, subject to specific requirements. Among other things, the bill requires a public bank to obtain a certificate of authorization from the DBO to transact business as a bank and Federal Deposit Insurance Corporation (FDIC) insurance.

A public bank may engage in banking activities, including infrastructure lending, wholesale lending, participation lending, and certain retail activities. A public bank may not compete with local financial institutions or engage in certain retail activities without partnering with a local financial institution.

The DBO is prohibited by law from licensing more than two public banks per calendar year and more than ten public banks in total. Information on public banking may be viewed at the Public Banks webpage on the DBO website.

Reminder: Banks Required to File Lists of Offices

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Pursuant to Financial Code section 1077, on or before January 1, all commercial banks, industrial banks and trust companies are required to file with the DBO a list of all offices they maintain and operate.  The report must specify the type of each office listed (branch or facility, head office, but not ATMs) and its complete address.

Please note that this requirement is only for banks and does not apply to credit unions or money transmitters. Responses may be emailed to Licensing@dbo.ca.gov or mailed to:

 

Department of Business Oversight
Division of Financial Institutions
Attn: Licensing & Information Reporting Office
One Sansome Street, Suite 600
San Francisco, CA  94104-4428

If you have not already provided this information to the DBO, please send it in as soon as possible or fines and penalties may apply. For questions, please contact Patrick Carroll at Patrick.Carroll@dbo.ca.gov or (415) 263-8559.

 

CSBS Issues Accountability Report on Fintech Initiatives

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On Jan. 7, the Conference of State Bank Supervisors (CSBS) released an Accountability Report charting progress made on a series of initiatives to streamline state licensing and supervision of financial technology companies. This work is part of CSBS Vision 2020, a bundle of initiatives driving toward a networked system of nonbank licensing and supervision.

The CSBS Fintech Industry Advisory Panel was convened more than two years ago to identify challenges and make recommendations to strengthen and streamline state regulation. In February 2019, CSBS publicly released those recommendations and committed to concrete actions. Today’s report details progress on initiatives identified by the industry panel.

FFIEC Small Business, Small Farm, and Community Development Lending Data for 2018

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Members of the Federal Financial Institutions Examination Council (FFIEC) with Community Reinvestment Act (CRA) responsibilities have announced the release of data on small business, small farm, and community development lending reported by certain commercial banks and savings associations, pursuant to the CRA.

The data was released by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

An electronic FFIEC disclosure statement on the data is available for each reporting commercial bank and savings association. The FFIEC also prepared aggregate disclosure statements of small business and small farm lending for all of the metropolitan statistical areas and non-metropolitan counties in the U. S. and its territories.

These statements and a fact sheet are available for public inspection on the FFIEC website (http://www.ffiec.gov/cra).

LICENSEE ACTIVITY

Commercial Bank Activity

Merger

Grand Mountain Bank, FSB, Granby, Colorado, to merge with and into United Business Bank, Walnut Creek
Filed: 12/6/19

Pacific Global Bank, Chicago, Illinois, to merge with and into Royal Business Bank, Los Angeles
Approved: 12/23/19

Premium Finance Company Activity

New Premium Finance Company

Chasewater Premium Finance Inc.
600 West Broadway, San Diego
Filed: 12/23/19

Credit Union Activity

Merger

C&H Sugar Employees Federal Credit Union, Crockett, to merge with and into 1st Northern California Credit Union, Martinez
Filed: 12/13/19

Money Transmitter Activity

New Money Transmitter

EncoreFX Ltd.
Opened: 12/17/19

Visa Global Services, Inc.
Withdrawn: 12/11/19

Change of Name

JPay, Inc. to change its name to JPay LLC
Effected: 12/31/19

 

MANUEL P. ALVAREZ • Commissioner of Business Oversight

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The January 2020 Monthly Bulletin covers the month ended  December 31, 2019.

It is issued pursuant to Financial Code section 376.

The Monthly Bulletin is available at no charge via e-mail.

To subscribe, go to: https://public.govdelivery.com/accounts/CADFI/subscriber/new.

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Last updated: Apr 27, 2020 @ 10:07 pm