Article 4 - Facilities of Uninsured Foreign (Other State) Banks

California Financial Code — §§ 1710-1721

Sections (12)

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

In this article, unless the context otherwise requires:

(a)“Controlling person,” when used with respect to an uninsured foreign (other state) bank, means any person who directly or indirectly controls the bank. For purposes of this subdivision, “control” has the meaning set forth in subdivision (b) of Section 1250, and “person” has the meaning set forth in subdivision (d) of Section 1250.

(b)“Executive officer,” when used with respect to an uninsured foreign (other state) bank or a controlling person of an uninsured foreign (other state) bank, means the chief executive officer, the chief operating officer, the chief financial officer, and any other person who participates or has authority to participate in major policymaking functions of the bank or controlling person.

(c)(1) “License” means a license issued under this article, authorizing an uninsured foreign (other state) bank to maintain a facility.

(2)“Licensed” means to be issued or to hold a license.

§ 1711

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

(a)In this section, “act” includes (without limitation) omission.

(b)For purposes of making findings on an application by an uninsured foreign (other state) bank for approval to establish a facility:

(1)The commissioner may, in the absence of credible evidence to the contrary, presume that the directors, executive officers, and any

controlling person of the bank, the directors and executive officers of any controlling person of the bank, and the members of the proposed management of the facility are each of good character and sound financial standing.

(2)The commissioner may find that the bank, a director, executive officer, or controlling person of the bank, a director or executive officer of a controlling person of the bank, or any member of the proposed management of the facility is not of good character if the person has done any of the following:

(A)Has been convicted of, or has pleaded nolo contendere to, any crime involving an act of fraud or dishonesty.

(B)Has consented to or suffered a judgment in any civil action based upon conduct involving an act of fraud or dishonesty.

(C)Has consented to or suffered the suspension or revocation of any professional, occupational, or vocational license based upon conduct involving an act of fraud or dishonesty.

(D)Has willfully made or caused to be made in any application or report filed with the commissioner or in any proceeding before the commissioner any statement that was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or has willfully omitted to state in any such application or report any material fact that was required to be stated in the application or report.

(E)Has willfully committed any violation of, or has willfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person of, any provision of this division or of any regulation or order issued under this division.

(c)Paragraph (2) of subdivision (b) is not an exclusive list of the grounds upon which the commissioner may find, for purposes of making findings on an application by an uninsured foreign (other state) bank for approval to establish a facility, that the bank, a director, executive officer, or controlling person of the bank, a director or executive officer of a controlling person of the bank, or any member of the proposed management of the facility is not of good character.

§ 1712

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

(a)No uninsured foreign (other state) bank may establish or maintain an office in this state at which it engages in noncore banking business unless the uninsured foreign (other state) bank is licensed to maintain the office as a facility.

(b)(1) No person may establish or maintain an office in this state as representative of an uninsured foreign (other state) bank unless the

uninsured foreign (other state) bank is licensed to maintain the office as a facility.

(2)For purposes of this article, if any person establishes or maintains an office in this state as representative of an uninsured foreign (other state) bank, the uninsured foreign (other state) bank is deemed to establish and maintain the office as a facility.

§ 1713

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

(a)No uninsured foreign (other state) bank may establish or maintain a facility unless the commissioner has first approved the establishment of the office and issued a license authorizing the bank to maintain the office.

(b)If the commissioner finds all the following with respect to an application by an uninsured foreign (other state) bank for approval to establish a facility, the commissioner shall

approve the application:

(1)The bank, any controlling person of the bank, the directors and executive officers of the bank or of any controlling person of the bank, and the proposed management of the office are each of good character and sound financial standing.

(2)The financial history and condition of the bank are satisfactory.

(3)The management of the bank and the proposed management of the office are adequate.

(4)It is reasonable to believe that, if licensed to maintain the office, the bank will operate the office in compliance with all applicable laws, regulations, and orders.

(5)The bank’s establishment and maintenance of the office will promote the public convenience and

advantage.

(6)The activities in which the bank proposes to engage at the office are noncore banking business and do not constitute core banking business.

If the commissioner finds otherwise, the commissioner shall deny the application.

(c)Whenever an application by an uninsured foreign (other state) bank for approval to establish a facility has been approved and all conditions precedent to the issuance of a license authorizing the bank to maintain the office have been fulfilled, the commissioner shall issue the license.

§ 1714

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

(a)No uninsured foreign (other state) bank that is licensed to maintain a facility may relocate the office unless the commissioner has first approved the relocation and issued a license authorizing the bank to maintain the office at the new site.

(b)If the commissioner finds the following with respect to an application by an uninsured foreign (other state) bank for approval to relocate a facility,

the commissioner shall approve the application:

(1)In case the new site of the office is in the same vicinity as the old site, that the relocation of the office will not be substantially detrimental to the public convenience.

(2)In case the new site of the office is not in the same vicinity as the old site, both of the following:

(A)The relocation of the office from the old site will not be substantially detrimental to the public convenience and advantage in the area that is primarily served by the office at the old site.

(B)The relocation of the office to the new site will promote the public convenience and advantage.

If the commissioner finds otherwise, the commissioner shall deny the application.

(c)Whenever an application by an uninsured foreign (other state) bank for approval to relocate a facility has been approved and all conditions precedent to the issuance of a license authorizing the bank to maintain the office at the new site have been fulfilled, the commissioner shall issue the license.

(d)Promptly after an uninsured foreign (other state) bank that is licensed to maintain a facility relocates the office, the bank shall surrender to the commissioner the license that authorized it to maintain the office at the old site.

§ 1715

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

An uninsured foreign (other state) bank that is licensed to maintain a facility may, subject to any regulations that the commissioner may prescribe, engage in any noncore banking business at the office but may not solicit deposits, receive deposits, pay checks, make loans, or otherwise conduct core banking business at the office.

§ 1716

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

(a)(1) No uninsured foreign (other state) bank that is licensed to maintain a facility may close the office unless the commissioner has first approved the closing.

(2)Paragraph (1) does not prohibit an uninsured foreign (other state) bank that is licensed to maintain a facility from closing the office in accordance with Section 1717.

(b)If the commissioner finds, with respect to an application by an uninsured foreign (other state) bank for approval to close a facility, that the closing of the office will not be substantially detrimental to the public convenience and advantage, the commissioner shall approve the application. If the commissioner finds otherwise, the commissioner shall deny the application.

(c)Whenever an application by an uninsured foreign (other state) bank for approval to close a facility has been approved and all conditions precedent to the closing have been fulfilled, the bank may close the office and shall promptly thereafter surrender to the commissioner the license that authorized it to maintain the office.

§ 1717

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

(a)Any uninsured foreign (other state) bank that holds a license to maintain a facility may voluntarily surrender the license by filing the license and a report with the commissioner. However, any uninsured foreign (other state) bank that holds licenses to maintain two or more facilities may not voluntarily surrender fewer than all of the licenses.

(b)(1) Except as provided in

paragraph (2), a voluntary surrender of a license is effective on the 30th day after the license and the report called for in subdivision (a) are filed with the commissioner, or on any earlier date that the commissioner may by order specify.

(2)If a proceeding to revoke or suspend a license is pending when the license and the report called for in subdivision (a) are filed with the commissioner, or if a proceeding to revoke or suspend a license or to impose conditions upon the surrender of a license is instituted before the 30th day after the license and the report called for in subdivision (a) are filed with the commissioner, the voluntary surrender of the license is effective at the time and upon the conditions that the commissioner may by order specify.

§ 1718

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

(a)(1) No uninsured foreign (other state) bank may be issued a license to maintain a facility unless it has first filed with the commissioner, in the form that the commissioner may by regulation or order require, an appointment irrevocably appointing the commissioner and the commissioner’s successor from time to time in office as the bank’s attorney to receive service of process in any noncriminal judicial or administrative proceeding against

the bank or any of its successors that arises out of the activities in this state of the facility after the appointment has been filed, with the same force and validity as if served personally on the bank or its successors, as the case may be.

(2)Any uninsured foreign (other state) bank that maintains a facility and that has not filed with the commissioner an appointment pursuant to paragraph (1) is deemed by the maintenance of the facility to have appointed the commissioner and the commissioner’s successor from time to time in office as its attorney to receive service of any lawful process in a noncriminal judicial or administrative proceeding against the bank or any of its successors that arises out of the activities in this state of the facility with the same force and validity as if served personally on the bank or its successors, as the case may be.

(b)Service may be made

on an uninsured foreign (other state) bank that has appointed or is deemed to have appointed the commissioner as its attorney for service of process by leaving a copy of the process at an office of the commissioner. However, the service is not effective unless (1) the party making the service, who may be the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the bank served at the last address on file with the commissioner for any of its offices in this state or at its head office, and (2) an affidavit of compliance with this subdivision by the party making the service is filed in the case on or before the return date, if any, or within any further time that the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allows.

§ 1719

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

Each uninsured foreign (other state) bank that is licensed to maintain a facility shall assign to the office a popular name that includes the term “facility” and that consists of a specific designation by name or number. The bank shall post the popular name and the name of the bank in a conspicuous place at the office.

§ 1720

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

Each uninsured foreign (other state) bank that is licensed to maintain a facility shall post its license in a conspicuous place at the office.

§ 1721

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.

No license is transferable or assignable.