BILL ANALYSIS AB 1268 Page 1 Date of Hearing: May 20, 2009 ASSEMBLY COMMITTEE ON APPROPRIATIONS Kevin De Leon, Chair AB 1268 (Gaines) - As Amended: May 11, 2009 Policy Committee: Banking and Finance Vote: 11-0 Judiciary 10-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill revises and reorganizes provisions of the Financial Code relating to depository institutions, updating definitions, the powers of the Commissioner of Financial Institutions, the Division of Credit Unions in the Department of Financial Institutions, the Credit Union Advisory Committee, processes for prosecuting violators, and reorganizations of seized banks. FISCAL EFFECT Negligible state costs. COMMENTS 1)Background . Existing law provides for the regulation and licensure by the Department of Financial Institutions (DFI) of state-chartered savings banks, credit unions, and other financial institutions doing business in this state. It also specifies various penalties and procedures for the enforcement of these laws and regulations. 2)Rationale . According to the author, this bill is part of on-going efforts to streamline and consolidate provisions of the California Financial Code so as to improve regulatory oversight of financial institutions and make the law more understandable to the licensed and regulated institutions. Last year, AB 1301 (Gaines, Chapter 125, Stats. of 2008) and AB 2749 (Gaines, Chapter 501, Stat. of 2008) clarified a number of existing provisions in the Financial Code, updated certain definitions to reflect changes in other provisions of AB 1268 Page 2 law, and modernized procedures in certain ways, such as authorizing banks to receive electronic filings. This measure focuses on streamlining the process of prosecuting violators, clarifying the powers of the Commissioner of Financial Institutions, and reorganizing seized banks. Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081