BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  AB 1268|
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                                 THIRD READING


          Bill No:  AB 1268
          Author:   Gaines (R) and Nava (D)
          Amended:  5/11/09 in Assembly
          Vote:     21

           
           SENATE BANKING, FINANCE, AND INS. COMMITTEE  :  11-0, 6/22/09
          AYES:  Calderon, Correa, Cox, Florez, Harman, Kehoe, Liu,  
            Lowenthal, Padilla, Runner, Wolk
          NO VOTE RECORDED:  Cogdill
           
          SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  76-0, 5/28/09 (Consent) - See last page  
            for vote


           SUBJECT  :    Financial institutions

           SOURCE  :     Department of Financial Institutions


           DIGEST  :    This bill reorganizes and consolidates  
          provisions of the Financial Code administered by the  
          Department of Financial Institutions (DFI), by moving the  
          powers and authority of the Commissioner of Financial  
          Institutions (Commissioner) into one chapter of the  
          Financial Code and consolidating other laws that are  
          applicable to all of DFI's licensees into one body of law.

           ANALYSIS  :    

          Existing law:
                                                           CONTINUED





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          1. Establishes Divisions 1, 2, 5, 7, 15, and 16 of the  
             Financial Code, and gives the Commissioner jurisdiction  
             over banks, industrial banks, trust companies,  
             transmitters of money abroad, traveler's check issuers,  
             savings associations, credit unions, industrial loan  
             companies, business and development corporations, and  
             sellers of payment instruments (money orders).

          2. Contains numerous code sections that specify the powers  
             of the Commissioner in relation to his/her regulatory  
             oversight over state licensees.

          This bill enacts numerous technical and nonsubstantive  
          changes to the provisions of the Financial Code  
          administered by DFI, by consolidating all of the powers of  
          the Commissioner into one portion of the Financial Code  
          (Section 220 et seq.); creating single articles within the  
          Financial Code providing the rules for enforcement (Article  
          7), liquidation and conservation (Article 8), and voluntary  
          liquidation (Article 9); and deleting provisions of  
          individual licensing laws rendered obsolete by the  
          aforementioned changes. 

           Background  

          The need for this bill, and the two modernization bills  
          that came before it during the prior legislative session  
          [AB 1301 (Gaines) and AB 2749 (Gaines)] stems from the age  
          of the laws over which the Commissioner has jurisdiction  
          and the fractured way in which they were enacted and  
          changed over the years.  The Commissioner's powers over  
          each of his/her licensees are similar in nature, yet each  
          of the six divisions of the Financial Code administered by  
          the Commissioner has slightly different provisions, which  
          were added at different times by different authors.  The  
          net result is a group of laws with similar intent, yet with  
          different wording and uneven requirements.  The powers of  
          the Commissioner are express in some divisions and implied  
          in others.  

          DFI notes that, common to all of its licensees, the  
          commissioner may approve or deny an application for  
          licensure, suspend or revoke a license, examine the books  







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          and records of a licensee, collect assessments and fees,  
          compel corrective action by a licensee that has been  
          determined by the Commissioner to be operating in violation  
          of applicable law(s) or to be in an unsafe and unsound  
          condition, and take possession of and provide for the  
          orderly liquidation or conservation of a licensee.

          This bill streamlines the Financial Code and provides more  
          efficient and effective regulatory oversight by  
          consolidating similar provisions found in licensee laws  
          into one chapter of the Financial Code and making the  
          provisions in the chapter applicable to all of the DFI's  
          licensees.  This proposal repeals duplicative language  
          currently contained in Division 1, Banks; Division 5,  
          Credit Unions; Division 15, Business and Industrial Loan  
          Corporations; and Division 16, Payment Instruments.

           Prior Legislation  

           AB 1301 (Gaines), Chapter 125, Statutes of 2008, was one of  
          the two prior DFI-sponsored bills to update and modernize  
          sections of the Financial Code administered by DFI.

          AB 2749 (Gaines), Chapter 501, Statutes of 2008, was the  
          second of two prior DFI-sponsored bills to update and  
          modernize sections of the Financial Code administered by  
          DFI.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  7/7/09)

          Department of Financial Institutions (source)


           ASSEMBLY FLOOR : 
          AYES:  Adams, Ammiano, Anderson, Arambula, Beall, Bill  
            Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,  
            Brownley, Buchanan, Caballero, Charles Calderon, Carter,  
            Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,  
            DeVore, Emmerson, Eng, Feuer, Fletcher, Fong, Fuentes,  
            Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore,  
            Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,  







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            Huffman, Jeffries, Jones, Knight, Krekorian, Lieu, Logue,  
            Bonnie Lowenthal, Ma, Miller, Monning, Nava, Niello,  
            Nielsen, John A. Perez, V. Manuel Perez, Portantino,  
            Price, Ruskin, Salas, Saldana, Silva, Skinner, Smyth,  
            Solorio, Audra Strickland, Swanson, Torlakson, Torres,  
            Torrico, Tran, Villines, Yamada, Bass
          NO VOTE RECORDED:  Duvall, Evans, Mendoza, Nestande


          JJA:mw  7/7/09   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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