BILL NUMBER: AB 33 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY FEBRUARY 10, 2009
INTRODUCED BY Assembly Member Nava
DECEMBER 1, 2008
An act relating to financial transactions
services .
LEGISLATIVE COUNSEL'S DIGEST
AB 33, as amended, Nava. Financial transactions.
services.
Existing law establishes the Department of Financial Institutions,
the Department of Corporations, the Department of Real Estate, and
the Office of Real Estate Appraisers in the Business, Transportation
and Housing Agency.
Existing law provides for the licensing and regulation of ,
among others, banks, credit unions, and other financial
institutions by the Commissioner of Financial Institutions. Existing
law provides for the licensing and regulation of , among others,
residential mortgage lenders and finance lenders by the
Commissioner of Corporations. Existing law provides for the licensing
and regulation of , among others, real estate
brokers by the Real Estate Commissioner. Existing law provides
for the licensure and regulation of real estate appraisers by the
Director of the Office of Real Estate Appraisers.
This bill would require the Secretary of Business,
Transportation and Housing, in conjunction with the Commissioner of
Financial Institutions, the Commissioner of Corporations, and the
Real Estate Commissioner, to develop a plan to consolidate the
operations and licensing frameworks of the 3 departments into a
single department by January 1, 2015. The plan would be submitted to
the Legislature by January 1, 2012 declare the intent
of the Legislature to do the following: (1) abolish the
Department of Corporations (DOC), the Department of Financial
Institutions (DFI), the Department of Real Estate (DRE), and the
Office of Real Estate Appraisers (OREA), (2) create a new Department
of Financial Services (DFS), (3) designate the chief officer of DFS
as the Commissioner of Financial Services, (4) arrange for the
consolidation and transfer of various operations and procedures of
those departments and that office to DFS, and (5) require DFS to
regulate those persons, entities, and transactions subject to
regulation by, or subject to the jurisdiction of, DOC, DFI, DRE, and
OREA . The bill would make legislative findings and
declarations in that regard.
Vote: majority. Appropriation: no. Fiscal committee: yes
no . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) The regulation and oversight of financial services in
California are divided among three regulators, the Department of
Financial Institutions, the Department of Real Estate, and the
Department of Corporations.
(b) California is one of only a few states that separates the
regulation of financial services among different licensing agencies.
(c) This division of oversight is most apparent in the regulation
of home mortgage lending that is split among several licensing
schemes, including the California Finance Lenders Law, the California
Residential Mortgage Lending Act, the Real Estate Law, and laws
governing the operation of state and federally chartered banks or
credit unions.
(d) This partition of regulation dilutes consumer protection and
creates confusion and unnecessary administrative difficulties for
financial services entities.
(e) The current regulatory system creates licensing arbitrage,
with entities seeking out licenses from various regulators in order
to obtain an advantage.
SEC. 2. The Secretary of Business,
Transportation and Housing, in consultation with the Commissioner of
Financial Institutions, the Real Estate Commissioner, and the
Commissioner of Corporations, shall design and develop a
consolidation plan to be submitted to the Legislature on or before
January 1, 2012, that does both of the following:
(a) Consolidates the operations and licensing frameworks of the
Department of Financial Institutions, the Department of Real Estate,
and the Department of Corporations into a single department.
(b) Identifies necessary statutory changes required to achieve
that consolidation by January 1, 2015.
SEC. 2. It is the intent of the Legislature to do
all of the following:
(a) Abolish the Department of Corporations (DOC), the Department
of Financial Institutions (DFI), the Department of Real Estate (DRE),
and the Office of Real Estate Appraisers (OREA) in the Business,
Transportation and Housing Agency.
(b) Create a new Department of Financial Services (DFS) in the
Business, Transportation and Housing Agency.
(c) Designate the chief officer of DFS as the Commissioner of
Financial Services.
(d) Cause DFS and the Commissioner of Financial Services to
succeed to and be vested with all the duties, powers, purposes,
responsibilities, and jurisdiction currently vested in DOC, DFI, DRE,
and OREA, and the Commissioner of Corporations, the Commissioner of
Financial Institutions, the Commissioner of Real Estate, and the
Director of Real Estate Appraisers.
(e) Authorize the Controller to transfer funds from DOC, DFI, DRE,
and OREA to DFS.
(f) Consolidate the operations and licensing frameworks of DOC,
DFI, DRE, and OREA and transfer them to DFS and, specifically,
require DFS to regulate the following persons, entities, and
transactions currently subject to regulation and oversight by, or
subject to the jurisdiction of, DOC, DFI, DRE, and OREA:
(1) Broker-dealers and the agents or registered representatives of
broker-dealers (Chapter 2 (commencing with Section 25210) of Part 3
of Division 1 of Title 4 of the Corporations Code).
(2) Investment advisers and investment adviser representatives or
associated persons (Chapter 3 (commencing with Section 25230) of Part
3 of Division 1 of Title 4 of the Corporations Code).
(3) Capital access companies (Division 3 (commencing with Section
28000) of Title 4 of the Corporations Code).
(4) The Franchise Investment Law (Division 5 (commencing with
Section 31000) of Title 4 of the Corporations Code).
(5) Banks and trust companies (Division 1 (commencing with Section
99) of the Financial Code).
(6) Foreign banks (Chapter 13.5 (commencing with Section 1700) of
Division 1 of the Financial Code).
(7) Money transmitters (Chapter 14 (commencing with Section 1800)
of Division 1 of the Financial Code).
(8) Issuers of travelers checks (Chapter 14A (commencing with
Section 1851) of Division 1 of the Financial Code).
(9) Bank holding companies (Chapter 21 (commencing with Section
3700) of Division 1 of the Financial Code).
(10) Checksellers, billpayers, and proraters (Division 3
(commencing with Section 12000) of the Financial Code).
(11) Credit unions (Division 5 (commencing with Section 14000) of
the Financial Code).
(12) Escrow agents (Division 6 (commencing with Section 17000) of
the Financial Code).
(13) Industrial loan companies (Division 7 (commencing with
Section 18000) of the Financial Code).
(14) The Finance Lenders Law (Division 9 (commencing with Section
22000) of the Financial Code).
(15) Deferred deposit originators (Division 10 (commencing with
Section 23000) of the Financial Code).
(16) Securities depositories (Division 14 (commencing with Section
30000) of the Financial Code).
(17) Business and industrial development corporations (Division 15
(commencing with Section 31000) of the Financial Code).
(18) Sellers of payment instruments (Division 16 (commencing with
Section 33000) of the Financial Code).
(19) The California Residential Mortgage Lending Act (Division 20
(commencing with Section 50000) of the Financial Code).
(20) The Real Estate Law (Part 1 (commencing with Section 10000)
of Division 4 of the Business and Professions Code).
(21) The Subdivided Lands Law (Chapter 1 (commencing with Section
11000) of Part 2 of Division 4 of the Business and Professions Code).
(22) The Vacation Ownership and Time-Share Act of 2004 (Chapter 2
(commencing with Section 11210) of Part 2 of Division 4 of the
Business and Professions Code).
(23) The Real Estate Appraisers' Licensing and Certification Law
(Part 3 (commencing with Section 11302) of Division 4 of the Business
and Professions Code).
(24) Any other persons, entities, or transactions subject to
regulation and oversight by, or subject to the jurisdiction of, DOC,
DFI, DRE, or OREA.