BILL NUMBER: SB 664	INTRODUCED
	BILL TEXT


INTRODUCED BY   Committee on Banking and Financial Institutions
(Senators Vargas (Chair), Blakeslee, Evans, Kehoe, Liu, Padilla, and
Walters)

                        FEBRUARY 18, 2011

   An act to amend the heading of Chapter 1 (commencing with Section
99) of Division 1 of, and to amend the heading of Division 1
(commencing with Section 99) of, and to amend and renumber Sections
100.5, 102, 103, 105, 105.2, 105.5, 105.7, 106, 107, 109, 110, 111,
112, 113, 115, 119, 120, 121, 122, 123, 124, 125, 126, 126.5, 126.7,
127, 128, 129, 130, 131, 132, 134, 134.5, 135, 137, 139, 139.2,
139.3, 139.4, 139.5, 139.7, 139.9, 139.95, 140, 140.3, 140.5, 142,
142.5, 143, 144, 145, 146, 146.3, 146.7, 148, 148.5, 149.3, 150, 151,
180, 181, 182, 184, 185, 200, 201, 210, 210.5, 211, 212, 213, 214,
215, 215.5, 216, 216.3, 217, 218, 219, 220, 221, 222, 223, 230,
230.5, 231, 232, 233, 234, 235, 236, 250, 250.5, 251, 252, 253, 255,
258, 259, 260, 261, 262, 263, 265, 270, 271, 271.5, 272, 273, 273.5,
274, 275, 276, 277, 280, 281, 282, 283, 284, 285, 286, 287, 288, 289,
290, 291, 292, 292.5, 293, 295, 295.1, 295.2, 295.3, 295.4, 298,
298.1, 299, 300, 300.1, 300.2, 300.3, 300.4, 301, 301.1, 302, 302.1,
302.2, 302.3, 305, 305.1, 305.2, 305.3, 305.4, 305.5, 305.6, 305.7,
305.8, 305.9, 310, 310.1, 310.2, 310.3, 310.4, 315, 315.1, 315.2,
315.3, 315.4, 315.5, 315.6, 315.7, 315.8, 315.9, 315.10, 315.11,
315.12, 320, 320.1, 320.2, 320.3, 320.4, 320.5, 320.6, 320.7, 320.8,
320.9, 320.10, 320.11, 320.12, 320.13, 320.14, 320.15, 320.16,
320.17, 320.18, 320.19, 320.20, 320.21, 320.22, 325, 325.1, 325.2,
330, 335, 335.1, 350, 351, 352, 353, 354, 355, 356, 357, 360, 360.5,
361, 362, 363, 364, 365, 399, 400, 401, 402, 403, 404, 405, 406, 407,
500, 501, 502, 503, 504, 505, 506, 507, 508, 509, 510, 511, 550,
551, 600, 600.3, 600.4, 600.6, 600.8, 600.10, 600.12, 602, 620, 621,
and 622 of, to add the headings of Article 1 (commencing with Section
300), Article 2 (commencing with Section 320), Article 3 (commencing
with Section 350), Article 4 (commencing with Section 370), Article
5 (commencing with Section 400), and Article 6 (commencing with
Section 405) to, Chapter 3 of Division 1 of, to add the headings of
Article 1 (commencing with Section 600) and Article 2 (commencing
with Section 620) to, Chapter 6 of Division 1 of, to add the headings
of Chapter 2 (commencing with Section 250), Chapter 3 (commencing
with Section 300), Chapter 4 (commencing with Section 450), Chapter 5
(commencing with Section 550), and Chapter 6 (commencing with
Section 600) to, Division 1 of, to repeal the headings of Article 1
(commencing with Section 200), Article 2 (commencing with Section
210), Article 3 (commencing with Section 230), Article 4 (commencing
with Section 250), Article 4.5 (commencing with Section 265), Article
5 (commencing with Section 270), Article 6 (commencing with Section
280), Article 7 (commencing with Section 295), Article 8 (commencing
with Section 305), and Article 9 (commencing with Section 335) of,
Chapter 2 of, to repeal the headings of Article 1 (commencing with
Section 350), Article 2 (commencing with Section 360), and Article 4
(commencing with Section 399) of, Chapter 3 of, to repeal the
headings of Article 1 (commencing with Section 600) and Article 2
(commencing with Section 620) of, Chapter 5 of, and to repeal the
headings of Chapter 1.5 (commencing with Section 180), Chapter 2
(commencing with Section 200), Chapter 3 (commencing with Section
350), Chapter 4 (commencing with Section 500), Chapter 4.5
(commencing with Section 550), and Chapter 5 (commencing with Section
600) of, Division 1 of, the Financial Code, relating to financial
institutions.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 664, as introduced, Committee on Banking and Financial
Institutions. Financial institutions.
   Existing law establishes the Department of Financial Institutions
in the Business, Transportation and Housing Agency and provides that
the department is in charge of the execution of specified laws
relating to various financial institutions and financial services.
   This bill would amend and renumber various provisions of the
Financial Code applicable to financial institutions and financial
services regulated by the department and would make other conforming
changes.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The heading of Division 1 (commencing with Section 99)
of the Financial Code is amended to read:

      DIVISION 1.   BANKS   FINANCIAL
INSTITUTIONS 


  SEC. 2.  The heading of Chapter 1 (commencing with Section 99) of
Division 1 of the Financial Code is amended to read:
      CHAPTER 1.   SCOPE AND DEFINITIONS  
DEFINITIONS 


  SEC. 3.  Section 100.5 of the Financial Code is amended and
renumbered to read:
    100.5.   101.   If and to the extent
that any provision of this division is preempted by federal law, the
provision does not apply and shall not be enforced.
  SEC. 4.  Section 102 of the Financial Code is amended and
renumbered to read:
    102.   103.   The word "bank" as used
in this division means any incorporated banking institution that
shall have been incorporated to engage in commercial banking
business, industrial banking, or trust business.
  SEC. 5.  Section 103 of the Financial Code is amended and
renumbered to read:
    103.   105.   Banks are divided into
the following classes:
   (a) Commercial banks.
   (b) Industrial banks.
   (c) Trust companies.
  SEC. 6.  Section 105 of the Financial Code is amended and
renumbered to read:
    105.   107.   "Commercial bank" means a
corporation organized for the purpose of engaging in the commercial
banking business.
  SEC. 7.  Section 105.2 of the Financial Code is amended and
renumbered to read:
    105.2.   109.   "Commercial banking
business" includes, but is not limited to, the business of
soliciting, receiving, or accepting of money or its equivalent on
deposit as a regular business whether the deposit is made subject to
check or is evidenced by a certificate of deposit, a passbook, a
note, a receipt, or other writing, provided that nothing herein shall
apply to or include money or its equivalent left in escrow, or left
with an agent pending investment in real estate or securities for, or
on account of, his or her principal. In addition, "commercial
banking business" means to lend money on the security of real or
personal property or without security; to discount or deal in bills,
notes, or other commercial paper; to buy and sell for the account of
customers, and, if eligible for investment, for its own account,
securities, gold and silver bullion, foreign coins, and bills of
exchange; and generally to transact a commercial banking business.
  SEC. 8.  Section 105.5 of the Financial Code is amended and
renumbered to read:
    105.5.  111.   "Industrial bank" means
a corporation organized for the purpose of engaging in the industrial
banking business.
  SEC. 9.  Section 105.7 of the Financial Code is amended and
renumbered to read:
    105.7.   113.   "Industrial banking
business" includes the making of loans and acceptance of deposits,
including deposits evidenced by investment or thrift certificates,
but excluding demand deposits.
  SEC. 10.  Section 106 of the Financial Code is amended and
renumbered to read:
    106.   115.   "Trust business" means
the business of acting as executor, administrator, guardian or
conservator of estates, assignee, receiver, depositary or trustee
under the appointment of any court, or by authority of any law of
this or any other state or of the United States, or as trustee for
any purpose permitted by law.
  SEC. 11.  Section 107 of the Financial Code is amended and
renumbered to read:
    107.   117.   "Trust company" means a
corporation, industrial bank, or a commercial bank that is authorized
to engage in the trust business.
  SEC. 12.  Section 109 of the Financial Code is amended and
renumbered to read:
    109.   119.   "Bank" or "banks"
includes commercial banks, industrial banks, and trust companies
unless the context otherwise requires. However, "bank" does not
include a savings association or a credit union.
  SEC. 13.  Section 110 of the Financial Code is amended and
renumbered to read:
    110.  121.   "Office" includes head
office, branch office, and any other authorized place of business of
a licensee.
   "Head office" means the principal place of business of a licensee.

  SEC. 14.  Section 111 of the Financial Code is amended and
renumbered to read:
    111.   123.   "Real property" and
"personal property" have the meanings defined in and shall be
construed in accordance with Title 1, Part 1, Division 2, Civil Code
of California.
  SEC. 15.  Section 112 of the Financial Code is amended and
renumbered to read:
    112.   125.   "Commissioner" means the
Commissioner of Financial Institutions and "department" means the
Department of Financial Institutions.
  SEC. 16.  Section 113 of the Financial Code is amended and
renumbered to read:
    113.   127.   "Person" means an
individual, sole proprietorship, partnership, joint venture,
association, trust, estate, business trust, corporation, joint stock
company, limited liability company, unincorporated association,
sovereign government or agency, instrumentality, or political
subdivision thereof, or any similar entity or organization.
  SEC. 17.  Section 115 of the Financial Code is amended and
renumbered to read:
    115.   129.   Unless the provision or
the context otherwise requires, the definitions set forth in this
chapter govern the construction of this division.
  SEC. 18.  Section 119 of the Financial Code is amended and
renumbered to read:
    119.   131.   References in this
division to the voting of shares shall be construed in accordance
with Section 111 of the Corporations Code.
  SEC. 19.  Section 120 of the Financial Code is amended and
renumbered to read:
    120.   133.   If the articles of a bank
provide for more or less than one vote for any share on any matter,
the references in Sections  123   139  and
 124   141  to a majority or other
proportion of shares means, as to such matter, a majority or other
proportion of the votes entitled to be cast. Whenever, under Division
1 (commencing with Section 100), Title 1 of the Corporations Code or
this division, shares are disqualified from voting on any matter,
they shall not be considered outstanding for the determination of a
quorum at any meeting to act upon, or the required vote to approve
action upon, such matter under any provision of Division 1
(commencing with Section 100), Title 1 of the Corporations Code, of
this division, or of the articles or bylaws.
  SEC. 20.  Section 121 of the Financial Code is amended and
renumbered to read:
    121.   135.   Any requirement in this
division for a vote of each class of outstanding shares shall be
construed in accordance with Section 117 of the Corporations Code.
  SEC. 21.  Section 122 of the Financial Code is amended and
renumbered to read:
    122.   137.   "Approved by (or approval
of) the board" means approved or ratified by the vote of the board
or by the vote of a committee authorized to exercise the powers of
the board, except as to any matter not within the competence of the
committee under Section 311 of the Corporations Code or any matter
for which this division also requires approval of the shareholders or
approval of the outstanding shares.
  SEC. 22.  Section 123 of the Financial Code is amended and
renumbered to read:
    123.   139.   "Approved by (or approval
of) the outstanding shares" has the meaning set forth in Section 152
of the Corporations Code and shall include approval by the
affirmative vote of a majority of the outstanding shares of each
class or series entitled, by any provision of the articles, of this
division, or of Division 1 (commencing with Section 100), Title 1 of
the Corporations Code, to vote as a class or series on the subject
matter being voted upon, and shall also include approval by the
affirmative vote of such greater proportion (including all) of the
outstanding shares of any class or series if such greater proportion
is required by the articles, by this division, or by Division 1
(commencing with Section 100), Title 1 of the Corporations Code.
  SEC. 23.  Section 124 of the Financial Code is amended and
renumbered to read:
    124.   141.   "Approved by (or approval
of) the shareholders" has the meaning set forth in Section 153 of
the Corporations Code and shall include approval or ratification by
the affirmative vote or written consent of such proportion (including
all) greater than a majority of the shares of any class or series as
may be provided in the articles, in this division, or in Division 1
(commencing with Section 100), Title 1 of the Corporations Code for
all or any specified shareholder action.
  SEC. 24.  Section 125 of the Financial Code is amended and
renumbered to read:
    125.   143.   "Articles" has the
meaning set forth in Section 154 of the Corporations Code.
  SEC. 25.  Section 126 of the Financial Code is amended and
renumbered to read:
    126.   145.   "Board" has the meaning
set forth in Section 155 of the Corporations Code.
  SEC. 26.  Section 126.5 of the Financial Code is amended and
renumbered to read:
    126.5.   147.   "California" means:
   (a) When used with respect to a bank, in the case of a state bank,
a bank that is organized under the laws of this state and, in the
case of a national bank, a national bank that maintains its main
office in this state.
   (b) When used with respect to an office of a bank, an office which
is located in this state.
   (c) When used with respect to any corporation other than a bank, a
corporation that is organized under the laws of this state.
  SEC. 27.  Section 126.7 of the Financial Code is amended and
renumbered to read:
    126.7.   149.   "CAMELS composite
rating" shall have the meaning set forth in Section 327.8(j) of Title
12 of the Code of Federal Regulations.
  SEC. 28.  Section 127 of the Financial Code is amended and
renumbered to read:
    127.   151.   "Certificate of
correction" means a certificate executed and filed with the Secretary
of State pursuant to Section 109 of the Corporations Code, subject,
however, to the provisions of Section  600.10 
1105  .
  SEC. 29.  Section 128 of the Financial Code is amended and
renumbered to read:
    128.   153.   "Certificate of
determination" has the meaning set forth in Section 156 of the
Corporations Code, subject, however, to the provisions of Section
600.8.
  SEC. 30.  Section 129 of the Financial Code is amended and
renumbered to read:
    129.   155.   "Certificate of
revocation" means a certificate executed and filed with the Secretary
of State pursuant to the second and third sentences of subdivision
(c) of Section 110 of the Corporations Code, subject, however, to the
provisions of Section  600.12   1106  .
  SEC. 31.  Section 130 of the Financial Code is amended and
renumbered to read:
    130.   157.   "Common shares" has the
meaning set forth in Section 159 of the Corporations Code.
  SEC. 32.  Section 131 of the Financial Code is amended and
renumbered to read:
    131.   159.   (a) "Confidential
information" means any information regarding a licensee contained in,
or related to, any of the following:
   (1) Applications filed with the commissioner.
   (2) Examination, operating, condition, or any other reports
prepared by, on behalf of, or for the use of, the commissioner.
   (3) Information received in confidence by the commissioner.
   (b) Confidential information is the property of the commissioner.
  SEC. 33.  Section 132 of the Financial Code is amended and
renumbered to read:
    132.   161.   "Constituent corporation,"
when used with respect to a corporation:
   (a) In the case of a merger, has the meaning set forth in Section
161 of the Corporations Code.
   (b) In the case of a consolidation, means a corporation that is
consolidated with one or more other corporations.
  SEC. 34.  Section 134 of the Financial Code is amended and
renumbered to read:
    134.   163.   "Contributed capital"
means all of shareholders' equity other than retained earnings.
However, nothing in this section shall prohibit a bank from
transferring amounts from time to time from its retained earnings to
its contributed capital, subject to any applicable statutes,
regulations, and generally accepted accounting principles.
  SEC. 35.  Section 134.5 of the Financial Code is amended and
renumbered to read:
    134.5.   165.   "Credit union" means a
corporation of the type described in Section 14002 organized under
the laws of this state or a corporation of similar type organized
under the laws of the United States or of any state of the United
States other than this state.
  SEC. 36.  Section 135 of the Financial Code is amended and
renumbered to read:
    135.   167.   "Directors" has the
meaning set forth in Section 164 of the Corporations Code.
  SEC. 37.  Section 137 of the Financial Code is amended and
renumbered to read:
    137.   169.   "Disappearing," when used
with respect to a corporation, means a constituent corporation that
is not the surviving corporation.
  SEC. 38.  Section 139 of the Financial Code is amended and
renumbered to read:
    139.   171.   "Distribution to its
shareholders" has the meaning set forth in Section 166 of the
Corporations Code. However, in Division 1 (commencing with Section
100), Title 1 of the Corporations Code and in this division,
"distribution to its shareholders" does not include any purchase of
shares by a bank or by a majority-owned subsidiary of a bank which is
necessary to reduce or avoid loss to such bank or to such subsidiary
on an extension of credit previously made in good faith. Also, in
this division, "distribution to its shareholders" includes any
distribution made by a bank or by a majority-owned subsidiary of a
bank to the shareholders of any corporation of which such bank is a
majority-owned subsidiary.
  SEC. 39.  Section 139.2 of the Financial Code is amended and
renumbered to read:
    139.2.   173.   (a) "Foreign," when
used with respect to a bank, an office of a bank, or any corporation
other than a bank, means foreign (other nation) or foreign (other
state).
   (b) "Foreign banking corporation" means a foreign bank.
  SEC. 40.  Section 139.3 of the Financial Code is amended and
renumbered to read:
    139.3.  175.   "Foreign nation" means
any nation other than the United States, including, without
limitation, any subdivision, territory, trust territory, dependency,
colony, or possession of any nation other than the United States.
"Foreign nation" includes Puerto Rico, Guam, American Samoa, the
Virgin Islands, and any territory, trust territory, dependency, or
insular possession of the United States.
  SEC. 41.  Section 139.4 of the Financial Code is amended and
renumbered to read:
    139.4.   177.   (a) The definition of
"state of the United States" in Section  146.7  
207  does not apply to this section. In this section, "state of
the United States" means any state of the United States or the
District of Columbia.
   (b) "Foreign (other nation):"
   (1) When used with respect to a bank, means any bank (including,
without limitation, any commercial bank, merchant bank, or other
institution that engages in banking activities that are usual in
connection with the business of banking in the nation in which the
institution is organized or operating) other than (A) a bank that is
organized under the laws of a state of the United States or (B) a
national bank that maintains its main office in a state of the United
States.
   (2) When used with respect to an office of a bank, means an office
that is located in a place other than a state of the United States.
   (3) When used with respect to any corporation other than a bank,
means a corporation that is organized under the laws of a foreign
nation.
  SEC. 42.  Section 139.5 of the Financial Code is amended and
renumbered to read:
    139.5.   179.   "Foreign (other state)"
:
   (a) When used with respect to a bank, means a bank that is
organized under the laws of any state of the United States other than
this state, or a national bank that maintains its main office in any
state of the United States other than this state, and includes any
savings bank, as defined in Section 3(g) of the Federal Deposit
Insurance Act (12 U.S.C. Sec. 1813(g)), that is organized under the
laws of a state other than this state.
   (b) When used with respect to an office of a bank, means an office
that is located in a state other than this state.
   (c) When used with respect to a corporation other than a bank,
means a corporation that is organized under the laws of any state of
the United States other than this state or under the laws of the
United States.
  SEC. 43.  Section 139.7 of the Financial Code is amended and
renumbered to read:
    139.7.   181.   "Insured:"
   (a) When used with respect to a bank or an office of a bank, means
a bank or office the deposits of which are insured by the Federal
Deposit Insurance Corporation under the Federal Deposit Insurance Act
(12 U.S.C. Sec. 1811 et seq.).
   (b) When used with respect to a deposit, means a deposit that is
insured by the Federal Deposit Insurance Corporation under the
Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.).
  SEC. 44.  Section 139.9 of the Financial Code is amended and
renumbered to read:
    139.9.   183.   "Law of the domicile"
means:
   (a) When used with respect to a national bank, the law of the
United States.
   (b) When used with respect to a state bank, the law of the state
of the United States under which the bank is organized.
   (c) When used with respect to a foreign (other nation) bank, the
law of the foreign nation under which the bank is organized.
  SEC. 45.  Section 139.95 of the Financial Code is amended and
renumbered to read:
    139.95.   185.   "Licensee" has the
following meanings:
   (a) Any bank authorized by the commissioner pursuant to 
Section 401   Chapter 3 (commencing with Section 1040)
of Division 1.1  to transact banking or trust business.
   (b) Any industrial bank authorized by the commissioner pursuant to
 Section 401   Chapter 3 (commencing with
Section 1040) of Division 1.1  to transact industrial banking
business.
   (c) Any trust company authorized by the commissioner pursuant to
Section 401 to transact trust business.
   (d) Any foreign (other nation) bank that is licensed under Article
2 (commencing with Section  1725)   1780) 
of Chapter  13.5   20 of Division 1.1  or
under Article 3 (commencing with Section  1750) 
 1800)  of Chapter  13.5   20 of
Division 1.1  .
   (e) Any corporation licensed by the commissioner to transmit money
pursuant to  Section 1802.7   Chapter 3 (co
  mmencing with Section 2030) of Division 1.2  .

   (f) Any person licensed by the commissioner to issue traveler's
checks pursuant to Section 1860.  
   (g) 
    (f)  Any person authorized by the commissioner to
conduct the business of a savings association pursuant to Division 2
(commencing with Section 5000). 
   (h) 
    (g)  Any credit union authorized by the commissioner to
conduct business pursuant to Section 14154. 
   (i) 
    (h)  Any foreign (other state) credit union licensed by
the commissioner to conduct business pursuant to Chapter 11
(commencing with Section 16000) of Division 5. 
   (j) 
    (i)  Any foreign (other nation) credit union licensed by
the commissioner to conduct business pursuant to Chapter 12
(commencing with Section 16500) of Division 5. 
   (k) 
    (j)  Any industrial loan company authorized by the
commissioner to conduct insurance premium finance business pursuant
to Division 7 (commencing with Section 18000). 
   (l) 
    (k)  Any corporation licensed by the commissioner as a
business and industrial development corporation pursuant to Section
31154. 
   (m) Any corporation licensed by the commissioner pursuant to
Section 33406 to engage in the business of selling payment
instruments. 
  SEC. 46.  Section 140 of the Financial Code is amended and
renumbered to read:
    140.   187.   "Majority-owned
subsidiary" has the meaning set forth for "subsidiary" in subdivision
(a) of Section 189 of the Corporations Code.
  SEC. 47.  Section 140.3 of the Financial Code is amended and
renumbered to read:
    140.3.   189.   (a) "National bank" or
"national banking association" means a national banking association
organized under the National Bank Act.
   (b) For purposes of this division, a national bank is deemed to be
a corporation.
  SEC. 48.  Section 140.5 of the Financial Code is amended and
renumbered to read:
    140.5.   191.   "Officers' certificate"
has the meaning set forth in Section 173 of the Corporations Code.
  SEC. 49.  Section 142 of the Financial Code is amended and
renumbered to read:
    142.   193.   "Resulting," when used
with respect to a corporation, means:
   (a) In the case of a consolidation, the corporation into which the
constituent corporations are consolidated.
   (b) In the case of a conversion, the corporation into which the
converting corporation is converted.
  SEC. 50.  Section 142.5 of the Financial Code is amended and
renumbered to read:
    142.5.   195.   "ROCA supervisory
rating" shall have the meaning set forth in Section 327.8(k) of Title
12 of the Code of Federal Regulations.
  SEC. 51.  Section 143 of the Financial Code is amended and
renumbered to read:
    143.   197.   "Savings association"
includes a savings association, a savings and loan association, and a
savings bank. However, "savings association" does not include any
savings bank of the type defined in Section 3(g) of the Federal
Deposit Insurance Act (12 U.S.C. Section 1813(g)).
  SEC. 52.  Section 144 of the Financial Code is amended and
renumbered to read:
    144.   199.   "Series," when used with
respect to shares, has the meaning set forth in Section 183 of the
Corporations Code.
  SEC. 53.  Section 145 of the Financial Code is amended and
renumbered to read:
    145.   201.   "Shares" has the meaning
set forth in Section 184 of the Corporations Code.
  SEC. 54.  Section 146 of the Financial Code is amended and
renumbered to read:
    146.   203.   "Shareholder" has the
meaning set forth in Section 185 of the Corporations Code.
  SEC. 55.  Section 146.3 of the Financial Code is amended and
renumbered to read:
    146.3.  205.   "State":
   (a) When used with respect to a corporation, means a corporation
that is organized under the laws of a state of the United States.
   (b) When used with respect to an office of a foreign (other
nation) bank, means an office that the bank is authorized to maintain
under the laws of a state of the United States.
  SEC. 56.  Section 146.7 of the Financial Code is amended and
renumbered to read:
    146.7.   207.   "State of the United
States" means any state of the United States, the District of
Columbia, any territory of the United States, Puerto Rico, Guam,
American Samoa, the Trust Territory of the Pacific Islands, the
Virgin Islands, and the Northern Mariana Islands.
  SEC. 57.  Section 148 of the Financial Code is amended and
renumbered to read:
    148.   209.   "Surviving," when used
with respect to a corporation, means a corporation in which one or
more other corporations are merged.
  SEC. 58.  Section 148.5 of the Financial Code is amended and
renumbered to read:
    148.5.   211.   "Uniform Interagency
Trust Rating System (UITRS)" shall have the meaning set forth in the
policy statement regarding the uniform interagency trust rating
system published by the Federal Financial Institutions Examination
Council on October 13, 1998 (63 Fed. Reg. 54704).
  SEC. 59.  Section 149.3 of the Financial Code is amended and
renumbered to read:
    149.3.   213.   "Uniform Rating System
for Informational Technology (URSIT)" shall have the meaning set
forth in the policy statement regarding the uniform rating system for
information technology published by the Federal Financial
Institutions Examination Council on January 20, 1999, and implemented
on or before April 1, 1999 (64 Fed. Reg. 3109).
  SEC. 60.  Section 150 of the Financial Code is amended and
renumbered to read:
    150.   215.   "Vote" has the meaning
set forth in Section 194 of the Corporations Code.
  SEC. 61.  Section 151 of the Financial Code is amended and
renumbered to read:
    151.   217.   "Voting power" has the
meaning set forth in Section 194.5 of the Corporations Code.
  SEC. 62.  The heading of Chapter 1.5 (commencing with Section 180)
of Division 1 of the Financial Code is repealed. 
      CHAPTER 1.5.  TRANSITION PROVISIONS


  SEC. 63.  Section 180 of the Financial Code is amended and
renumbered to read:
    180.   250.   In this chapter, unless
the provision or context requires otherwise:
   (a) "New General Corporation Law" means Division 1 (commencing
with Section 100), Title 1 of the Corporations Code, as in effect on
and after January 1, 1977.
   (b) "Prior Banking Law" means this division, as in effect on
December 31, 1978.
   (c) "Prior General Corporation Law" means Division 1 (commencing
with Section 100), Title 1 of the Corporations Code, as in effect on
December 31, 1976.
   (d) "Revised Banking Law" means this division, as in effect on and
after January 1, 1979.
   (e) "Subject institution" means:
   (1) Any corporation incorporated under the laws of this state
which is, with the approval of the commissioner, incorporated for the
purpose of engaging in, or which is authorized by the commissioner
to engage in, the commercial banking business under Division 1
(commencing with Section 99) of the Financial Code.
   (2) Any corporation incorporated under the laws of this state
which is, with the approval of the commissioner, incorporated for the
purpose of engaging in, or which is authorized by the commissioner
to engage in, the trust business under Division 1 (commencing with
Section 99) of the Financial Code.
   (3) Any corporation incorporated under the laws of this state
which is, with the approval of the commissioner, incorporated for the
purpose of engaging in, or which is authorized by the commissioner
to engage in, business under Article 1 (commencing with Section
3500), Chapter 19 of this division.
  SEC. 64.  Section 181 of the Financial Code is amended and
renumbered to read:
    181.   251.   For purposes of Chapter
23 (commencing with Section 2300) of the new General Corporation Law,
in the case of any subject institution existing on January 1, 1979:
   (a) The term "new law" shall mean the new General Corporation Law,
subject, however, to the provisions of Section 101 of the revised
banking law.
   (b) The term "prior law" shall mean the prior General Corporation
Law, subject, however, to the provisions of Section 101 of the prior
Banking Law.
   (c) The term "effective date" shall mean January 1, 1979.
  SEC. 65.  Section 182 of the Financial Code is amended and
renumbered to read:
                                       182.  
252.   (a)  Sections 600 and 600.2 of the revised
Banking Law   Section 1100  shall not apply to any
subject institution existing on January 1, 1979, unless and until an
amendment of the articles of  such   the 
subject institution is filed with the Secretary of State pursuant to
Section 2302 of the new General Corporation Law.
   (b) An amendment of the articles of a subject institution existing
on January 1, 1979, which is filed with the Secretary of State
pursuant to Section 2302 of the new General Corporation Law may be
adopted by approval of the board alone in accordance with the second
sentence of Section 2302 of the new General Corporation Law,
notwithstanding the fact that  such  the 
amendment changes  such   the  articles to
conform to the provisions of  Sections 600 and 600.2 of the
revised Banking Law   Section 1100  .
   (c) Neither  Article 6 (commencing with Section 690),
Chapter 5 of the revised Banking Law   Chapter 6
(commencing with Section 1200) of Division 1.1  nor Section 904
of the new General Corporation Law shall apply to an amendment of the
articles of a subject institution existing on January 1, 1979, which
is filed with the Secretary of State pursuant to Section 2302 of the
new General Corporation Law on account of the fact that 
such   the  amendment conforms  such
  the  articles to the  applicable 
provisions of  Section 600.2 of the revised Banking Law
  Division 1.1 (commencing with Section 1000)  .
  SEC. 66.  Section 184 of the Financial Code is amended and
renumbered to read:
    184.   253.   In case the board of a
subject institution has, prior to January 1, 1979, adopted a
resolution levying an assessment on the common shares of 
such   the  subject institution in accordance with
an order issued by the commissioner pursuant to Section  661
  1151  of the prior Banking Law:
   (a) If the assessment has, prior to January 1, 1979, become a lien
on the common shares in accordance with Section 2704 of the prior
General Corporation Law, the assessment shall be collected pursuant
to the prior General Corporation Law:
   (b) Otherwise, the resolution shall be deemed to be rescinded on
January 1, 1979.
  SEC. 67.  Section 185 of the Financial Code is amended and
renumbered to read:
    185.   254.   Article 3 (commencing
with Section 640)  ,   of  Chapter 5 
of Division 1.1  of the revised Banking Law applies to any
distribution to its shareholders made after January 1, 1979, by a
subject institution existing on January 1, 1979, except that any such
distribution effected pursuant to a contract for the purchase or
redemption of shares entered into by such subject institution prior
to January 1, 1979, may be made if permissible under the applicable
provisions of the revised Banking Law and the new General Corporation
Law or under the applicable provisions of the prior Banking Law and
the prior General Corporation Law in effect at the time such contract
was entered into.
  SEC. 68.  The heading of Chapter 2 (commencing with Section 200) of
Division 1 of the Financial Code is repealed. 
      CHAPTER 2.  DEPARTMENT OF FINANCIAL INSTITUTIONS


  SEC. 69.  The heading of Article 1 (commencing with Section 200) of
Chapter 2 of Division 1 of the Financial Code is repealed. 

      Article 1.  General


  SEC. 70.  Section 200 of the Financial Code is amended and
renumbered to read:
    200.   300.   (a) In this section:
   (1) "Business and industrial development corporation" means a
corporation licensed under Division 15 (commencing with Section
31000).
   (2) "Payment instrument" has the same meaning as set forth in
Section  33059   1803  .
   (3) "Traveler's check" has the same meaning as set forth in
Section  1852   1803  .
   (b) There is in the state government, in the Business,
Transportation and Housing Agency, a Department of Financial
Institutions which has charge of the execution of, among other laws,
the laws of this state relating to any of the following: (1) banks or
trust companies or the banking or trust business; (2) savings
associations or the savings association business; (3) credit unions
or the credit union business; (4) persons who engage in the business
of receiving money for transmission to foreign nations or such
business; (5) issuers of traveler's checks or the traveler's check
business; (6) issuers of payment instruments or the payment
instrument business; (7) business and industrial development
corporations or the business and industrial development corporation
business, or (8) insurance premium finance agencies or the insurance
premium finance business.
  SEC. 71.  Section 201 of the Financial Code is amended and
renumbered to read:
    201.   301.   This chapter is
applicable to this division, Division  1 (commencing with
Section 99)   1.1 (commencing with Section 1000),
Division 1.2 (commencing with Section 2000)  , Division 1.5
(commencing with Section 4800), Division 5 (commencing with Section
14000), Division 7 (commencing with Section 18000),  and 
Division 15 (commencing with Section 31000)  , and Division
16 (commencing with Section 33000)  .
  SEC. 72.  The heading of Article 2 (commencing with Section 210) of
Chapter 2 of Division 1 of the Financial Code is repealed. 

      Article 2.  Commissioner of Financial Institutions


  SEC. 73.  Section 210 of the Financial Code is amended and
renumbered to read:
    210.   320.   The chief officer of the
Department of Financial Institutions is the Commissioner of Financial
Institutions. The Commissioner of Financial Institutions is the head
of the department and, except as otherwise provided in this code, is
subject to the provisions of the Government Code relating to
department heads, but need not reside in Sacramento.
  SEC. 74.  Section 210.5 of the Financial Code is amended and
renumbered to read:
    210.5.   321.   As of the operative
date of this section:
   (a) In this section, "order" means any approval, consent,
authorization, exemption, denial, prohibition, requirement, or other
administrative action, applicable to a specific case.
   (b) The office of the Superintendent of Banks and the State
Banking Department are abolished. All powers, duties,
responsibilities, and functions of the Superintendent of Banks and
the State Banking Department are transferred to the Commissioner of
Financial Institutions and the Department of Financial Institutions,
respectively. The Commissioner of Financial Institutions and the
Department of Financial Institutions succeed to all the rights and
property of the Superintendent of Banks and the State Banking
Department, respectively; the Commissioner of Financial Institutions
and the Department of Financial Institutions are subject to all the
debts and liabilities of the Superintendent of Banks and the State
Banking Department, respectively, as if the Commissioner of Financial
Institutions and the Department of Financial Institutions had
incurred them. Any action or proceeding by or against the
Superintendent of Banks or the State Banking Department may be
prosecuted to judgment, which shall bind the Commissioner of
Financial Institutions or the Department of Financial Institutions,
respectively, or the Commissioner of Financial Institutions or the
Department of Financial Institutions may be proceeded against or
substituted in place of the Superintendent of Banks or the State
Banking Department, respectively. References in the Constitution of
the State of California or in any statute or regulation to the
Superintendent of Banks or to the State Banking Department mean the
Commissioner of Financial Institutions or the Department of Financial
Institutions, respectively. All agreements entered into with, and
orders and regulations issued by, the Superintendent of Banks or the
State Banking Department shall continue in effect as if the
agreements were entered into with, and the orders and regulations
were issued by, the Commissioner of Financial Institutions or the
Department of Financial Institutions, respectively.
   (c) The office of the Savings and Loan Commissioner and the
Department of Savings and Loan are abolished. All powers, duties,
responsibilities, and functions of the Savings and Loan Commissioner
and the Department of Savings and Loan are transferred to the
Commissioner of Financial Institutions and the Department of
Financial Institutions, respectively. The Commissioner of Financial
Institutions and the Department of Financial Institutions succeed to
all the rights and property of the Savings and Loan Commissioner and
the Department of Savings and Loan, respectively; the Commissioner of
Financial Institutions and the Department of Financial Institutions
are subject to all the debts and liabilities of the Savings and Loan
Commissioner and the Department of Savings and Loan, respectively, as
if the Commissioner of Financial Institutions and the Department of
Financial Institutions had incurred them. Any action or proceeding by
or against the Savings and Loan Commissioner or the Department of
Savings and Loan may be prosecuted to judgment, which shall bind the
Commissioner of Financial Institutions or the Department of Financial
Institutions, respectively, or the Commissioner of Financial
Institutions or the Department of Financial Institutions may be
proceeded against or substituted in place of the Savings and Loan
Commissioner or the Department of Savings and Loan, respectively.
References in the Constitution of the State of California or in any
statute or regulation to the Savings and Loan Commissioner or to the
Department of Savings and Loan mean the Commissioner of Financial
Institutions or the Department of Financial Institutions,
respectively. All agreements entered into with, and orders and
regulations issued by, the Savings and Loan Commissioner or the
Department of Savings and Loan shall continue in effect as if the
agreements were entered into with, and the orders and regulations
were issued by, the Commissioner of Financial Institutions or the
Department of Financial Institutions.
   (d) All powers, duties, responsibilities, and functions of the
Commissioner of Corporations and the Department of Corporations with
respect to credit unions, the credit union business, industrial loan
companies, or the industrial loan business are transferred to the
Commissioner of Financial Institutions and the Department of
Financial Institutions, respectively. The Commissioner of Financial
Institutions and the Department of Financial Institutions succeed to
all the rights and property of the Commissioner of Corporations and
the Department of Corporations, respectively, with respect to credit
unions, the credit union business, industrial loan companies, or the
industrial loan business; the Commissioner of Financial Institutions
and the Department of Financial Institutions are subject to all the
debts and liabilities of the Commissioner of Corporations and the
Department of Corporations, respectively, with respect to credit
unions, the credit union business, industrial loan companies, or the
industrial loan business, as if the Commissioner of Financial
Institutions and the Department of Financial Institutions had
incurred them. Any action or proceeding by or against the
Commissioner of Corporations or the Department of Corporations with
respect to credit unions, the credit union business, industrial loan
companies, or the industrial loan business may be prosecuted to
judgment, which shall bind the Commissioner of Financial Institutions
or the Department of Financial Institutions, respectively, or the
Commissioner of Financial Institutions or the Department of Financial
Institutions may be proceeded against or substituted in place of the
Commissioner of Corporations or the Department of Corporations,
respectively. References in the Constitution of the State of
California or any statute or regulation to the Commissioner of
Corporations or to the Department of Corporations with respect to
credit unions, the credit union business, industrial loan companies,
or the industrial loan business mean the Commissioner of Financial
Institutions or the Department of Financial Institutions,
respectively. All agreements entered into with, and orders and
regulations issued by, the Commissioner of Corporations or the
Department of Corporations in the exercise of authority under any law
relating to credit unions, the credit union business, industrial
loan companies, or the industrial loan business, shall continue in
effect as if the agreements were entered into with, and the orders
and regulations were issued by, the Commissioner of Financial
Institutions or the Department of Financial Institutions.
  SEC. 75.  Section 211 of the Financial Code is amended and
renumbered to read:
    211.   322.   The commissioner is
appointed by the Governor, and holds office at the pleasure of the
Governor. The appointment of the commissioner is subject to
confirmation by the Senate.
  SEC. 76.  Section 212 of the Financial Code is amended and
renumbered to read:
    212.   323.   The commissioner shall be
a citizen of the United States and a resident of the state for at
least three years prior to his or her appointment. The commissioner
shall be chosen solely for his or her qualifications and fitness to
perform the duties of his or her office.
  SEC. 77.  Section 213 of the Financial Code is amended and
renumbered to read:
    213.   324.   The annual salary of the
commissioner is provided for by Chapter 6 (commencing with Section
11550) of Part 1 of Division 3 of Title 2 of the Government Code.
  SEC. 78.  Section 214 of the Financial Code is amended and
renumbered to read:
    214.   325.   Before entering upon the
duties of his or her office, the commissioner shall take and
subscribe to the constitutional oath of office and file the same with
the Secretary of State.
  SEC. 79.  Section 215 of the Financial Code is amended and
renumbered to read:
    215.   326.   The commissioner is
responsible for the performance of all duties, the exercise of all
powers and jurisdiction, and the assumption and discharge of all
responsibilities vested by law in the department. The commissioner
has and may exercise all the powers necessary or convenient for the
administration and enforcement of, among other laws, the laws
described in Section  200   300  . The
commissioner may issue such rules and regulations consistent with law
as he or she may deem necessary or advisable in executing the
powers, duties, and responsibilities of the department.
  SEC. 80.  Section 215.5 of the Financial Code is amended and
renumbered to read:
    215.5.   327.   (a) The commissioner
shall apply the Interagency Guidance on Nontraditional Mortgage
Product Risks issued in September 2006 and the Statement on Subprime
Mortgage Lending issued in June 2007 by the Office of the Comptroller
of the Currency, the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, the Office of
Thrift Supervision, and the National Credit Union Administration to
state-regulated financial institutions, including, but not limited
to, privately insured, state-chartered credit unions.
   (b) The commissioner may issue emergency and final regulations to
clarify the application of this section as soon as possible.
   (c) A bank or credit union to which the commissioner applies the
documents described in subdivision (a) shall adopt and adhere to
policies and procedures that are reasonably intended to achieve the
objectives set forth in those documents.
  SEC. 81.  Section 216 of the Financial Code is amended and
renumbered to read:
    216.   328.   (a) The commissioner may
make the agreements that he or she deems necessary or appropriate in
exercising his or her powers.
   (b) (1) The agreements authorized under subdivision (a) may
include, but are not limited to, agreements with agencies of this
state, of other states of the United States, of the United States, or
of foreign nations that regulate financial institutions, relating to
examinations of banks, savings associations, credit unions,
industrial loan companies, and other matters.
   (2) Any agreement with a government agency that regulates
financial institutions is exempt from the advertising and competitive
bidding requirements of the Public Contract Code.
  SEC. 82.  Section 216.3 of the Financial Code is amended and
renumbered to read:
    216.3.   329.   (a) For purposes of
this section, the following definitions apply:
   (1) "Applicable law" means:
   (A) With respect to any bank, Division 1.5 (commencing with
Section 4800), and any of the following provisions of Division 1
(commencing with Section 99) of the Financial Code:
   (i) Article  5 (commencing with Section 270) of Chapter 2
  6 (commencing with Section 405) of Chapter 3  .
   (ii) Article 3 (commencing with Section  640) 
 1130)  of Chapter 5  of Division 1.1  . 
   (iii) Article 4.5 (commencing with Section 670) of Chapter 5.
 
   (iv) 
    (iii)   Article 6 (commencing with Section 690)
of Chapter 5   Chapter 6 (commencing with Section 1200)
of Division 1.1  . 
   (v) 
    (iv   )   Chapter 6 (commencing with
Section 750)   Chapter 10 (commencing with Section
1320)of Division 1.1  . 
   (vi) 
    (v)  Chapter  10 (commencing with Section 1200)
  14 (commencing with Section 1460) of Division 1.1
 . 
   (vii) 
    (vi)  Article 1 (commencing with Section  1400)
of Chapter 11   1530) of Chapter 15 of Division 1.1
 . 
   (viii) 
    (vii)  Chapter  12 (commencing with Section
1500)   16 (commencing with Section 1550) of Division
1.1  . 
   (ix) 
    (viii)  Chapter  13.5 (commencing with Section
1700)   20 (commencing with Section 1750) of Division
1.1  . 
   (x) 
    (ix)  Section  286   456  .

   (xi) 
    (x)  Section  287   457  .

   (xii) 
    (xi)  Section  289   459  .

   (xiii) 
    (xii)  Section  290   460  .

   (xiv) Section 1951.  
   (xv) Section 3359.  
   (xvi) 
    (xii)  Chapter  19 (commencing with Section
3500)   21 (commencing with Section 1850) of Division
1.1  .
   (xvii) Chapter  21.5 (commencing with Section 3750)
  18 (commencing with section 1660) of Division 1.1
 .
   (xviii) Chapter  22 (commencing with Section 3800)
  19 (commencing with Section 1670) of Division 1.1
 .
   (B) With respect to any savings association, any provision of
Division 1.5 (commencing with Section 4800) and Division 2
(commencing with Section 5000).
   (C) With respect to any issuer of traveler's checks, any provision
of  Chapter 14A (commencing with Section 1851) of Division 1
  Division 1.2 (commencing with Section 2000)  .
   (D) With respect to any insurance premium finance company, any
provision of Division 7 (commencing with Section 18000).
   (E) With respect to any business and development corporation, any
provision of Division 15 (commencing with Section 31000).
   (F) With respect to any credit union, any of the following
provisions:
   (i) Section 14252.
   (ii) Section 14253.
   (iii) Section 14255.
   (iv) Article 4 (commencing with Section 14350) of Chapter 3 of
Division 5.
   (v) Section 14401.
   (vi) Section 14404.
   (vii) Section 14408, only as that section applies to gifts to
directors, volunteers, and employees, and the related family or
business interests of the directors, volunteers, and employees.
   (viii) Section 14409.
   (ix) Section 14410.
   (x) Article 5 (commencing with Section 14600) of Chapter 4 of
Division 5.
   (xi) Article 6 (commencing with Section 14650) of Chapter 4 of
Division 5, excluding subdivision (a) of Section 14651.
   (xii) Section 14803.
   (xiii) Section 14851.
   (xiv) Section 14858.
   (xv) Section 14860.
   (xvi) Section 14861.
   (xvii) Section 14863.
   (G) With respect to any person licensed to transmit money abroad,
any provision of Chapter 14 (commencing with Section 1800). 
   (H) With respect to any person licensed to sell payment
instruments, any provision of Division 16 (commencing with Section
33000). 
   (2) "Licensee" means any bank, savings association, credit union,
transmitter of money abroad, issuer of payment instruments, issuer of
traveler's checks, insurance premium finance agency, or business and
industrial development corporation that is authorized by the
commissioner to conduct business in this state.
   (b) Notwithstanding any other provision of this code that applies
to a licensee or a subsidiary of a licensee, after notice and an
opportunity to be heard, the commissioner may, by order that shall
include findings of fact which incorporates a determination made in
accordance with subdivision (e), levy civil penalties against any
licensee or any subsidiary of a licensee who has violated any
provision of applicable law, any order issued by the commissioner,
any written agreement between the commissioner and the licensee or
subsidiary of the licensee, or any condition of any approval issued
by the commissioner. Notwithstanding any other provision of law,
neither the commissioner nor any employee of the department shall
disclose or permit the disclosure of any record, record of any
action, or information contained in a record of any action, taken by
the commissioner under the provisions of this section, unless the
action was taken pursuant to paragraph (2) of subdivision (b), to
persons other than federal or state government employees who are
authorized by statute to obtain the records in the performance of
their official duties, unless the disclosure is authorized or
requested by the affected licensee or the affected subsidiary of the
licensee. The commissioner shall have the sole authority to bring any
action with respect to a violation of applicable law subject to a
penalty imposed under this section.
   Except as provided in paragraphs (1) and (2), any penalty imposed
by the commissioner may not exceed one thousand dollars ($1,000) a
day, provided that the aggregate penalty of all offenses in any one
action against any licensee or subsidiary of a licensee shall not
exceed fifty thousand dollars ($50,000).
   (1) If the commissioner determines that any licensee or subsidiary
of the licensee has recklessly violated any applicable law, any
order issued by the commissioner, any provision of any written
agreement between the commissioner and the licensee or subsidiary, or
any condition of any approval issued by the commissioner, the
commissioner may impose a penalty not to exceed five thousand dollars
($5,000) per day, provided that the aggregate penalty of all
offenses in an action against any licensee or subsidiary of a
licensee shall not exceed seventy-five thousand dollars ($75,000).
   (2) If the commissioner determines that any licensee or subsidiary
of the licensee has knowingly violated any applicable law, any order
issued by the commissioner, any provision of any written agreement
between the commissioner and the licensee or subsidiary, or any
condition of any approval issued by the commissioner, the
commissioner may impose a penalty not to exceed ten thousand dollars
($10,000) per day, provided that the aggregate penalty of all
offenses in an action against any licensee or subsidiary of a
licensee shall not exceed 1 percent of the total assets of the
licensee or subsidiary of a licensee subject to the penalty.
   (c) Nothing in this section shall be construed to impair or impede
the commissioner from pursuing any other administrative action
allowed by law.
   (d) Nothing in this section shall be construed to impair or impede
the commissioner from bringing an action in court to enforce any law
or order he or she has issued, including orders issued under this
section. Nothing in this section shall be construed to impair or
impede the commissioner from seeking any other damages or injunction
allowed by law.
   (e) In determining the amount and the appropriateness of
initiating a civil money penalty under subdivision (b), the
commissioner shall consider all of the following:
   (1) Evidence that the violation or practice or breach of duty was
intentional or was committed with a disregard of the law or with a
disregard of the consequences to the institution.
   (2) The duration and frequency of the violations, practices, or
breaches of duties.
   (3) The continuation of the violations, practices, or breaches of
duty after the licensee or subsidiary of the licensee was notified,
or, alternatively, its immediate cessation and correction.
   (4) The failure to cooperate with the commissioner in effecting
early resolution of the problem.
   (5) Evidence of concealment of the violation, practice, or breach
of duty or, alternatively, voluntary disclosure of the violation,
practice, or breach of duty.
   (6) Any threat of loss, actual loss, or other harm to the
institution, including harm to the public confidence in the
institution, and the degree of that harm.
   (7) Evidence that a licensee or subsidiary of a licensee received
financial gain or other benefit as a result of the violation,
practice, or breach of duty.
   (8) Evidence of any restitution paid by a licensee or subsidiary
of a licensee of losses resulting from the violation, practice, or
breach of duty.
   (9) History of prior violations, practices, or breaches of duty,
particularly where they are similar to the actions under
consideration.
   (10) Previous criticism of the institution for similar actions.
   (11) Presence or absence of a compliance program and its
effectiveness.
   (12) Tendency to engage in violations of law, unsafe or unsound
banking practices, or breaches of duties.
   (13) The existence of agreements, commitments, orders, or
conditions imposed in writing intended to prevent the violation,
practice, or breach of duty.
   (14) Whether the violation, practice, or breach of duty causes
quantifiable, economic benefit or loss to the licensee or the
subsidiary of the licensee. In those cases, removal of the benefit or
recompense of the loss usually will be insufficient, by itself, to
promote compliance with the applicable law, order, or written
agreement. The penalty amount should reflect a remedial purpose and
should provide a deterrent to future misconduct.
   (15) Other factors as the commissioner may, in his or her opinion,
consider relevant to assessing the penalty or establishing the
amount of the penalty.
   (f) The amounts collected under this section shall be deposited in
the appropriate fund of the department. For purposes of this
subdivision, the term "appropriate fund" means the fund to which the
annual assessments of fined licensees, or the parent licensee of the
fined                                              subsidiary, are
credited.
  SEC. 83.  Section 217 of the Financial Code is amended and
renumbered to read:
    217.   330.   The authority vested in
the Superintendent of Banks under subdivision (2) of Section 1 of
Article XV of the California Constitution is delegated to the
commissioner.
  SEC. 84.  Section 218 of the Financial Code is amended and
renumbered to read:
    218.   331.   Notwithstanding any other
provision of law, the commissioner may adopt and implement any
method of accepting electronic filings of applications, reports, or
other matters, which, in the opinion of the commissioner, is secure.
Any method of electronic filing chosen by the commissioner shall
include a method to verify the identity of the person making the
filing. The verification shall be deemed to satisfy all other
verifications required by this division, and shall have the same
force and effect as the use of manual signatures.
  SEC. 85.  Section 219 of the Financial Code is amended and
renumbered to read:
    219.   332.   (a) (1) In this section,
"federal law" includes, but is not limited to, the United States
Constitution, any federal statute, any federal court decision, and
any regulation, circular, bulletin, interpretation, decision, order,
and waiver issued by a federal agency.
   (2) The definitions set forth in Section 1700 apply to this
section.
   (b) (1) Notwithstanding any other provision of law, except as
provided in subdivision (c), if the commissioner finds that any
provision of federal law applicable to national banking associations
doing business in this state is substantively different from the
provisions of this code applicable to banks organized under the laws
of this state, the commissioner may by regulation make that provision
of federal law applicable to banks organized under the laws of this
state.
   (2) If the commissioner finds that any provision of federal law
applicable to foreign (other nation) banks with respect to federal
agencies or federal branches in this state is substantively different
from the provisions of this code applicable to foreign (other
nation) banks with respect to agencies or branch offices licensed by
the commissioner under Chapter 13.5 (commencing with Section 1700),
the commissioner may by regulation make that provision of federal law
applicable to foreign (other nation) banks with respect to agencies
or branch offices licensed by the commissioner under Chapter 13.5.
   (c) (1) Section 11343.4 and Article 5 (commencing with Section
11346) and Article 6 (commencing with Section 11349) of Chapter 3.5
of Part 1 of Division 3 of Title 2 of the Government Code do not
apply to any regulation adopted under subdivision (b).
   (2) The commissioner shall file any regulation adopted pursuant to
subdivision (b), together with a citation to this section as
authority for the adoption and a citation to the provisions of
federal law made applicable by the regulation, with the Office of
Administrative Law for filing with the Secretary of State and
publication in the California Code of Regulations.
   (3) Any regulation adopted under subdivision (b) shall become
effective on the date when it is filed with the Secretary of State
unless the commissioner prescribes a later date in the regulation or
in a written instrument filed with the regulation.
   (4) Any regulation adopted under subdivision (b) shall expire at
12 p.m. on December 31 of the year following the calendar year in
which it becomes effective.
   (5) Any regulation adopted pursuant to subdivision (b) shall be
subject to the following restrictions:
   (A) The commissioner shall not renew or reinstate the regulation
adopted pursuant to subdivision (b).
   (B) The commissioner shall not adopt a new regulation pursuant to
subdivision (b), to address the same conformity issue that was
addressed by the regulation that expired pursuant to subdivision (c).

   (d) The commissioner may adopt regulations pursuant to subdivision
(b) that are exempt from the expiration and restrictions of
subdivision (c) if the regulations are adopted in compliance with all
provisions of Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of the Government Code, including those listed in
paragraph (1) of subdivision (c).
  SEC. 86.  Section 220 of the Financial Code is amended and
renumbered to read:
    220.   333.   The powers of supervision
and examination of all licensees are vested in the commissioner.
  SEC. 87.  Section 221 of the Financial Code is amended and
renumbered to read:
    221.   334.   The commissioner may
promulgate or waive such rules and regulations as may be reasonable
or necessary to carry out his or her duties and responsibilities.
  SEC. 88.  Section 222 of the Financial Code is amended and
renumbered to read:
    222.   335.   (a) The commissioner,
whenever in his or her opinion such action is necessary or
appropriate to carry out his or her duties, may call a meeting of the
board of directors of a licensee.
   (b) A meeting of the board of a licensee called by the
commissioner shall be held upon four days' notice by first class mail
or 24 hours' notice delivered personally or by telephone. The notice
shall be given by the commissioner or, if the commissioner so
orders, by an officer of the licensee.
   (c) A meeting of the board of a licensee called by the
commissioner shall be held at a place within this state as may be
designated by the commissioner and specified in the notice of the
meeting.
   (d) The expenses of a meeting of the board of a licensee called by
the commissioner shall be paid by the licensee.
  SEC. 89.  Section 223 of the Financial Code is amended and
renumbered to read:
    223.   336.   The commissioner may, at
any time, require a licensee to write down any asset held by the
licensee to a valuation that will represent the asset's then fair
market value.
  SEC. 90.  The heading of Article 3 (commencing with Section 230) of
Chapter 2 of Division 1 of the Financial Code is repealed. 

      Article 3.  Deputies and Employees


  SEC. 91.  Section 230 of the Financial Code is amended and
renumbered to read:
    230.   350.   The commissioner shall
appoint a chief deputy who holds office at the pleasure of the
commissioner. The annual salary of the chief deputy shall be fixed by
the commissioner with the approval of the Director of Finance. The
chief deputy shall have the same qualifications as the commissioner.
The commissioner shall also appoint two deputies, one to serve in the
City and County of San Francisco and one to serve in the City of Los
Angeles.
  SEC. 92.  Section 230.5 of the Financial Code is amended and
renumbered to read:
    230.5.   351.   The Chief Officer of
the Division of Credit Unions is the Deputy Commissioner of Financial
Institutions for the Division of Credit Unions. The Deputy
Commissioner of Financial Institutions for the Division of Credit
Unions shall administer the laws of this state relating to credit
unions or the credit union business under the direction of the
commissioner. The Deputy Commissioner of Financial Institutions for
the Division of Credit Unions shall be appointed by the Governor and
shall hold office at the pleasure of the Governor. The Deputy
Commissioner of Financial Institutions shall receive an annual salary
as fixed by the Governor.
  SEC. 93.  Section 231 of the Financial Code is amended and
renumbered to read:
    231.   352.   The commissioner may
employ deputies in addition to the chief deputy, and examiners,
appraisers, technical assistants, investigators, administrative
assistants, clerks, and other employees that he or she may need to
discharge in a proper manner the duties imposed upon him or her by
law. He or she shall prescribe their duties and fix their
compensation in accordance with classifications made by the State
Personnel Board. The commissioner may also, at those times and on
those terms as may be approved by the Governor, employ those
attorneys as he or she may need.
  SEC. 94.  Section 232 of the Financial Code is amended and
renumbered to read:
    232.   353.   Before entering upon the
duties of his office each deputy and examiner shall take and
subscribe to the constitutional oath of office and file the same with
the Secretary of State.
  SEC. 95.  Section 233 of the Financial Code is amended and
renumbered to read:
    233.   354.   The commissioner may
require, at any time, of any deputy, examiner, or other employee of
the department, an official bond in such amount as the commissioner
may deem necessary. The premium for bonds required by the
commissioner shall be an expense of the department.
  SEC. 96.  Section 234 of the Financial Code is amended and
renumbered to read:
    234.   355.   Neither the commissioner
nor any deputy or employee of the department shall do or be any of
the following with respect to any bank, savings association, credit
union, or industrial loan company supervised by the department:
   (a) Be indebted, directly or indirectly, as borrower, endorser,
surety, or guarantor to any such bank, savings association, credit
union, or industrial loan company.
   (b) Be an officer, director, or employee of any such bank, savings
association, credit union, or industrial loan company.
   (c) Own or deal in directly or indirectly, the shares or
obligations of any such bank, savings association, credit union, or
industrial loan company.
   (d) Be interested in or, directly or indirectly, receive from any
such bank, savings association, credit union, or industrial loan
company or any officer, director, or employee thereof, any salary,
fee, compensation, or other valuable thing by way of gift, credit,
compensation for services, or otherwise. However, this subdivision
does not prohibit any person from being interested in or directly or
indirectly receiving (1) anything which is expressly excluded from a
definition of "gift" or "honorarium" in the Political Reform Act of
1974 (Title 9 (commencing with Section 81000) of the Government Code)
or in regulations issued under the Political Reform Act of 1974 by
the Fair Political Practices Commission or (2) anything which, if
received by the commissioner, would constitute a gift or honorarium
within the meaning of the Political Reform Act of 1974 or regulations
issued under the Political Reform Act of 1974 by the Fair Political
Practices Commission but which the commissioner would not be
prohibited from receiving under the Political Reform Act of 1974 or
regulations issued under the Political Reform Act of 1974 by the Fair
Political Practices Commission.
   (e) Be interested in or engage in the negotiation of any loan to,
obligation of, or accommodation for another person to or with any
such bank, savings association, credit union, or industrial loan
company.
   Notwithstanding the foregoing the commissioner and any deputy or
employee may have and maintain one or more deposit or similar
accounts in any bank, savings association, credit union, or
industrial loan company in this state and may maintain with any bank,
savings association, credit union, or industrial loan company in
this state a loan which was not obtained in violation of this section
if the person reports the loan in writing to the department within
30 days after the person commences his or her term of appointment or
employment with the department and if the loan is not renewed,
renegotiated, extended, or otherwise modified on or after July 1,
1997.
   A violation of this section by any person shall constitute
sufficient grounds for his or her removal or discharge.
  SEC. 97.  Section 235 of the Financial Code is amended and
renumbered to read:
    235.   356.   If the commissioner is
unable to perform his or her duties for more than 30 consecutive days
or if the office of the commissioner becomes vacant, the chief
deputy shall have all the powers and duties of the commissioner until
the return or recovery of the commissioner, or, in case of a
vacancy, until a new commissioner is appointed by the Governor and
qualifies to hold office.
  SEC. 98.  Section 236 of the Financial Code is amended and
renumbered to read:
    236.   357.   If a deputy commissioner
or any examiner has knowledge of the insolvency or unsafe condition
of any licensee and willfully fails to report that fact to the
commissioner in writing, he or she is guilty of a felony.
  SEC. 99.  The heading of Article 4 (commencing with Section 250) of
Chapter 2 of Division 1 of the Financial Code is repealed. 

      Article 4.  Administration of Department


  SEC. 100.  The heading of Chapter 2 (commencing with Section 250)
is added to Division 1 of the Financial Code, to read:
      CHAPTER 2.  TRANSITION PROVISIONS


  SEC. 101.  Section 250 of the Financial Code is amended and
renumbered to read:
    250.   370.   The commissioner may have
an office in the City of Sacramento, the City of Los Angeles, the
City of San Diego, the City and County of San Francisco, or any other
location in the state that he or she considers appropriate. The
commissioner shall provide at the expense of the department such
office space, furniture, and equipment as may be necessary or
convenient for the transaction of the business of the department.
  SEC. 102.  Section 250.5 of the Financial Code is amended and
renumbered to read:
    250.5.   371.   There is in the
Department of Financial Institutions, the Division of Credit Unions.
The Division of Credit Unions has charge of the execution of the laws
of this state relating to credit unions and to the credit union
business.
  SEC. 103.  Section 251 of the Financial Code is amended and
renumbered to read:
    251.   372.   The department may expend
moneys in accordance with law for the necessary travel expenses of
officers and employees of the department while traveling in the line
of their duties either within or without the State.
  SEC. 104.  Section 252 of the Financial Code is amended and
renumbered to read:
    252.   373.   The commissioner shall
adopt and keep an official seal. Papers executed by the commissioner
in his or her official capacity pursuant to law and bearing the seal,
or copies thereof certified by him or her, shall be received in
evidence in like manner as the original and may be recorded in the
same manner and with the same effect as a deed regularly
acknowledged.
  SEC. 105.  Section 253 of the Financial Code is amended and
renumbered to read:
    253.   374.   (a) Whenever it is
necessary for the commissioner to approve any instrument and to affix
his or her official seal thereto, the commissioner shall charge a
fee of twenty-five dollars ($25) therefor.
   (b) Whenever it is proper for the department to furnish a copy of
any paper that has been filed therein and to certify to the paper,
the commissioner may charge twenty-five cents ($0.25) for each page
copied.
   (c) Whenever the commissioner is required or requested to certify
copies of documents, the commissioner may charge a fee of twenty-five
dollars ($25) for certifying the copied documents and for affixing
his or her official seal.
  SEC. 106.  Section 255 of the Financial Code is amended and
renumbered to read:
    255.   375.   Official reports made by
the commissioner and verified reports of an examination made by the
commissioner, exclusively or in conjunction with or with assistance
from any agency of the United States, of a state of the United
States, or of a foreign nation are prima facie evidence of the facts
stated in the reports for all purposes.
  SEC. 107.  Section 258 of the Financial Code is amended and
renumbered to read:
   258.   376.   At least once each month,
the commissioner shall issue and disseminate as the commissioner
deems appropriate a bulletin containing the following information:
   (a) Information regarding any of the following actions taken since
issuance of the previous bulletin:
   (1) The filing, approval, or denial under Chapter 3 (commencing
with Section 350) of an application for authority to organize a
California state bank, or the issuance under Chapter 3 of a
certificate of authority to a California state bank.
   (2) The filing, approval, or denial under Article 1 (commencing
with Section 5400) of Chapter 2 of Division 2 of an application for
the issuance of an organizing permit for the organization of a
California savings association, or for the issuance under Article 2
(commencing with Section 5500) of Chapter 2 of Division 2 of a
certificate of authority to a California savings association.
   (3) The filing, approval, or denial under Article 2 (commencing
with Section 14150) of Chapter 2 of Division 5 of an application for
a certificate to act as a credit union, or the issuance of a
certificate to engage in the business of a credit union.
   (4) The filing, approval, or denial under Chapter 14 (commencing
with Section 1800),  Chapter 14A (commencing with Section
1851),  Division 7 (commencing with Section 18000),  or
 Division 15 (commencing with Section 31000)  , or
Division 16 (commencing with Section 33000)  of an
application for a license to engage in business, or the issuance
under any of those laws of a license to engage in business.
   (5) The filing, approval, or denial under Chapter 13.5 (commencing
with Section 1700) of an application by a foreign (other nation)
bank to establish its first office of any particular class (as
determined under Section 1701) in this state, or the issuance under
that chapter of a license in connection with the establishment of
such an office.
   (6) The filing, approval, or denial under Division 1.5 (commencing
with Section 4800) of an application for approval of a sale, merger,
or conversion.
   (7) The filing, approval, or denial under Article 6 (commencing
with Section 5700) of Chapter 2 of Division 2 of an application for
approval of a conversion of a federal savings association into a
state savings association, or the filing of a federal charter of a
state savings association that has converted to a federal savings
association.
   (8) The filing, approval, or denial under Article 7 (commencing
with Section 5750) of Chapter 2 of Division 2 of an application for
approval of a reorganization, merger, consolidation, or transfer of
assets of a state savings association.
   (9) The filing, approval, or denial under Chapter 9 (commencing
with Section 15200) of Division 5 of an application for approval of a
merger, dissolution, or conversion of a credit union.
   (10) The taking of possession of the property and business of a
California state bank, savings association, credit union, or person
licensed by the commissioner under any of the laws cited in paragraph
(2).
   (b) Other information as the commissioner deems appropriate.
  SEC. 108.  Section 259 of the Financial Code is amended and
renumbered to read:
    259.   377.   Notwithstanding any other
provision of this code, whenever any provision of this division
requires the pledge of securities to be deposited with the Treasurer,
to insure the performance of any act or duty, the securities after
first being approved by the commissioner and upon the written order
of the commissioner, shall be deposited with the Treasurer. The
Treasurer, with the consent of the owner of the securities deposited
or to be deposited with the Treasurer, may place the securities in
the custody of a qualified trust company or bank in the same manner
and under the same conditions provided in Article 3 (commencing with
Section 16550) of Chapter 4 of Part 2 of Division 4 of Title 2 of the
Government Code.
  SEC. 109.  Section 260 of the Financial Code is amended and
renumbered to read:
    260.   378.   Whenever the commissioner
is notified of or discovers a violation of the state law punishable
by criminal penalties, he or she shall promptly advise the Attorney
General.
  SEC. 110.  Section 261 of the Financial Code is amended and
renumbered to read:
    261.   379.   (a) For the purposes of
this section the following definitions shall apply:
   (1) "Control" has the meaning set forth in subdivision (b) of
Section 700. "Control" also means the ownership of a subject person
by means of sole proprietorship, partnership, or by any other similar
means.
   (2) "Controlling person" means a person who, directly or
indirectly, controls a subject person.
   (3) "Subject person" means any of the following:
   (A) A commercial bank, industrial bank, trust company, savings
association, or credit union incorporated under the laws of this
state.
   (B) A person licensed by the commissioner under  Chapter
14 (commencing with Section 1800)   Division 1.2
(commencing with Section 2000)  to receive money for
transmission to foreign countries.
   (C) A person authorized by the commissioner pursuant to Section
 1803   2004  to act as an agent of a
person licensed by the commissioner to receive money for transmission
to foreign countries.
   (D) A person licensed by the commissioner pursuant to Division 7
(commencing with Section 18000) to transact business as a premium
finance agency.
   (E) A person licensed by the commissioner pursuant to Division 15
(commencing with Section 31000) to transact business as a business
and industrial development corporation.
   (F) A person licensed by the commissioner pursuant to Division
 16 (commencing with Section 33000)   1.2
(commencing with Section 2000)  to engage in the business of
selling payment instruments in this state issued by the licensee.
   (G) A corporation incorporated under the laws of this state for
the purpose of engaging in, or that is authorized by the commissioner
to engage in, business pursuant to Article 1 (commencing with
Section  3500) of Chapter 19   1850) of Chapter
21 of Division 1.1  .
   (H) A foreign corporation that is licensed by the commissioner
pursuant to Article 1 (commencing with  Section 3500) of
Chapter 19   1850) of Chapter 21 of Division 1.1 
to maintain an office in this state and to transact at that office
business pursuant to Article 1 (commencing with Section 
3500) of Chapter 19   1850) of Chapter 21 of Division
1.1  .
   (b) Notwithstanding any other provision of law, and subject to
subdivision (c), the commissioner may deliver, or cause to be
delivered, to local, state, or federal law enforcement agencies
fingerprints taken of any of the following:
   (1) An applicant for employment with the department.
   (2) A person licensed, or proposed to be licensed, as a subject
person.
   (3) A director, officer, or employee of an existing or proposed
subject person.
   (4) An existing or proposed controlling person of a subject
person.
   (5) A director, officer, or employee of an existing or proposed
controlling person of a subject person.
   (6) A director, officer, or employee of an existing or proposed
affiliate of a subject person.
   (c) The authorization in subdivision (b) may only be used by the
department for the purpose of obtaining information regarding an
individual as to the existence and nature of the criminal record, if
any, of that individual relating to convictions, and to any arrest
for which the individual is released on bail or on his or her own
recognizance pending trial, for the commission or attempted
commission of a crime involving robbery, burglary, theft,
embezzlement, fraud, forgery, bookmaking, receiving stolen property,
counterfeiting, or involving checks or credit cards or using
computers.
   (d) No request shall be submitted pursuant to this section without
the written consent of the person affected.
   (e) Any criminal history information obtained pursuant to this
section shall be confidential and no recipient shall disclose its
contents other than for the purpose for which it was acquired.
  SEC. 111.  Section 262 of the Financial Code is amended and
renumbered to read:
    262.   380.   (a) The commissioner
shall inform the Commissioner of Corporations and other appropriate
state and federal officials charged with the regulation of financial
institutions or securities transactions of any enforcement actions,
including, but not limited to, civil or criminal actions, cease and
desist orders, license or authorization suspensions or revocations,
or an open investigation.
   (b) The commissioner shall inform the Commissioner of Corporations
and other appropriate state and federal officials charged with the
regulation of financial institutions or securities transactions if it
appears that any bank, bank holding company, savings association,
savings and loan holding company, credit union, industrial loan
company, industrial loan holding company, or other licensee of the
department is conducting its business in a fraudulent, unsafe,
unsound, or injurious manner, or has suffered or will suffer
substantial financial loss or damage, and it appears to the
commissioner that the information is relevant to the regulatory
activities of the other agency.
  SEC. 112.  Section 263 of the Financial Code is amended and
renumbered to read:
    263.   381.   Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code does not apply to hearings conducted by the
department.
  SEC. 113.  The heading of Article 4.5 (commencing with Section 265)
of Chapter 2 of Division 1 of the Financial Code is repealed.


      Article 4.5.  Financial Institutions Fund


  SEC. 114.  Section 265 of the Financial Code is amended and
renumbered to read:
    265.   400.   As of the operative date
of this section, there is established a Financial Institutions Fund
in the State Treasury. Except as otherwise provided in Division 5
(commencing with Section 14000), all money collected or received by
the commissioner under this code shall be deposited with the
Treasurer to the credit of the Financial Institutions Fund.
  SEC. 115.  The heading of Article 5 (commencing with Section 270)
of Chapter 2 of Division 1 of the Financial Code is repealed.


      Article 5.  State Banking Account


  SEC. 116.  Section 270 of the Financial Code is amended and
renumbered to read:
    270.  405.   (a) The commissioner shall
annually collect pro rata from the banks and trust companies under
the supervision of the department a fund in amount sufficient in the
commissioner's judgment to meet the expenses of the department in
administering laws relating to banks or trust companies or to the
banking or trust business that are not otherwise provided for and to
provide a reasonable reserve for contingencies.
   (b) The amount of the annual assessment for the fund on any bank
or trust company shall not be less than five thousand dollars
($5,000). Above that minimum amount, except as otherwise provided
subdivision (c), the annual assessment shall not exceed the sum of
the products of a base assessment rate, or percentage thereof, and
                                                segregated portions
of its total resources, according to the following table:
Segregated Total Resources    Percentage of Base
(In Millions or Fractions
Thereof)                    Assessment       Rate
  First $2                           100.0
  Next $18                            50.0
  Next $80                            12.0
  Next $100                            6.25
  Next $800                            6.0
  Next $1,000                          4.0
  Next $4,000                          3.5
  Next $14,000                         3.0
  Next $20,000                         2.5
  Excess over $40,000                  1.5


   (c) (1) For purposes of determining the annual assessment on banks
and trust companies that have one or more foreign (other state)
branch offices, the resources of foreign (other state) branch offices
shall be excluded from total resources, except that the commissioner
may order the resources of foreign (other state) branch offices to
be included in total resources if and to the extent that it is
necessary in the commissioner's judgment to meet the expenses of the
department on account of foreign (other state) branch offices and a
reasonable reserve for contingencies.
   (2) If the commissioner finds that a bank or trust company
allocated any resource to a foreign (other state) branch office for
the purpose, in whole or in part, of reducing its annual assessment,
the commissioner may, for purposes of calculating the annual
assessment on the bank or trust company, reallocate the resource to
the bank's or trust company's head office.
   (d) The base assessment rate shall be set by the commissioner from
time to time at the commissioner's discretion, not to exceed two
dollars and twenty cents ($2.20) per one thousand dollars ($1,000) of
total resources.
  SEC. 117.  Section 271 of the Financial Code is amended and
renumbered to read:
    271.   406.   The commissioner shall
annually collect from national banking associations and foreign
(other state) banks operating trust departments in this state an
annual assessment to meet expenses of the department, not exceeding
one one-hundredth of 1 percent of the amount required by law to be
deposited with the Treasurer as surety for the faithful performance
and execution of all court and private trusts accepted by them.
  SEC. 118.  Section 271.5 of the Financial Code is amended and
renumbered to read:
    271.5.   407.   Whenever the
commissioner makes an assessment pursuant to Section  270
  405  or  271   406  ,
the commissioner shall fix the date when the assessment is due and
payable and shall mail or otherwise deliver to each bank and trust
company assessed an invoice showing the amount of its assessment and
the date when the assessment is due and payable.
  SEC. 119.  Section 272 of the Financial Code is amended and
renumbered to read:
    272.   408.   The commissioner, in
addition to the annual assessment, shall collect from each bank
authorized to engage in the trust business, to defray the cost of
examination, a fee not to exceed seventy-five dollars ($75) per hour
for each examiner necessarily engaged in the examination of the trust
company, trust business, or trust department. The commissioner shall
assess the fee upon completion of the examination of the trust
company or trust business and shall mail or otherwise deliver an
invoice for the fee to the institution. The institution shall pay the
fee within 30 days after the invoice is mailed or otherwise
delivered to it.
  SEC. 120.  Section 273 of the Financial Code is amended and
renumbered to read:
    273.   409.   If any bank or trust
company fails to make timely payment of any assessment made pursuant
to Section  270, 271, or 272   405, 406, or 408
 , the commissioner may, in the commissioner's sole discretion,
(a) cancel the certificate of authority of the bank or trust company
to conduct a banking or trust business or (b) levy a civil penalty
pursuant to Section  216.3   329  .
  SEC. 121.  Section 273.5 of the Financial Code is amended and
renumbered to read:
    273.5.   410.   As of the operative
date of this section:
   (a) The State Banking Fund is converted into a separate account in
the Financial Institutions Fund and designated as the State Banking
Account.
   (b) All moneys and other assets and all liabilities of the State
Banking Fund shall be transferred to the State Banking Account.
  SEC. 122.  Section 274 of the Financial Code is amended and
renumbered to read:
    274.   411.   Except as otherwise
provided in Section 276 or 277, all salaries and other expenses of
the department, other than those incurred in administering laws
relating to savings associations or the savings association business,
credit unions or the credit union business, industrial banks, the
industrial banking business, insurance premium finance agencies, the
insurance premium finance business, or Article 2 (commencing with
Section 53630) of Chapter 4 of Part 1 of Division 2 of Title 5 of the
Government Code, shall be paid out of the State Banking Account in
the Financial Institutions Fund. Salaries and other expenses incurred
in the liquidation or conservation of any bank (other than an
industrial bank) or of any person licensed under  Chapter 14
(commencing with Section 1800), Chapter 14A (commencing with Section
1851),   Division 1.2 (commencing with Section 2000) or
 Division 15 (commencing with Section 31000),  or
Division 16 (commencing with Section 33000),  including the
compensation of employees of the department to the extent that they
are engaged in that liquidation or conservation, if possible, and if
advanced from the State Banking Account in the Financial Institutions
Fund, shall constitute a first charge against the assets of the bank
or licensee, as the case may be. Salaries and other expenses
incurred in the liquidation or conservation of any industrial bank,
including the compensation of employees of the department to the
extent that they are engaged in that liquidation or conservation, if
possible, and if advanced from the Industrial Bank Account in the
Financial Institutions Fund, shall constitute a first charge against
the assets of the industrial bank.
  SEC. 123.  Section 275 of the Financial Code is amended and
renumbered to read:
    275.   412.   The commissioner shall
deliver all moneys received or collected by the commissioner under
Section  270, 271, or 272   405, 406, or 408
 or otherwise, other than moneys received or collected by the
commissioner under laws relating to savings associations, the savings
association business, credit unions, the credit union business,
industrial banks, the industrial banking business, insurance premium
finance agencies, the insurance premium finance business, or Article
2 (commencing with Section 53630) of Chapter 4 of Part 1 of Division
2 of Title 5 of the Government Code, to the Treasurer, who shall
deposit the moneys to the credit of the State Banking Account of the
Financial Institutions Fund.
  SEC. 124.  Section 276 of the Financial Code is amended and
renumbered to read:
    276.   413.   (a) In this section,
"assessment statute" means any statute that authorizes the
commissioner to make or collect an assessment (other than a fine) on
financial institutions, including the following:
   (1) Sections  270 to 271.5   405 to 407 
, inclusive.
   (2) Section  1801.1   2042  .
   (3) Section 33302.
   (4) Article 2 (commencing with Section 8030) of Chapter 7 of
Division 2.
   (5) Article 4 (commencing with Section 14350) of Chapter 3 of
Division 5.
   (6)  Section  1402   1532  .
   (b) The commissioner may charge to and collect from the Financial
Institutions Fund, the Credit Union Fund, each of the accounts
included in the Financial Institutions Fund, and each of the programs
included in the State Banking Account an amount equal to the fund's,
account's, or program's pro rata share of those expenses of the
department which, in the opinion of the commissioner, it is not
feasible to attribute to any single one of the funds, accounts, or
programs. The fund's, account's, or program's pro rata share shall be
determined and paid in the manner and at the time ordered by the
commissioner.
   (c) The provisions of any assessment statute that authorize the
commissioner to make or collect an assessment for the purposes
specified in the assessment statute include authority for the
commissioner to make and collect an assessment for the additional
purpose of providing money in an amount that will, in the
commissioner's judgment, be sufficient to make payments that may be
required under subdivision (b).
  SEC. 125.  Section 277 of the Financial Code is amended and
renumbered to read:
   277.   414.   Notwithstanding any other
provision of this code or of Section 53667 of the Government Code,
the commissioner may, at any time during a fiscal year, pay any
expense of the department from any of the following accounts and
funds: the State Banking Account, the Savings and Loan Account, the
Industrial Bank Account, the Financial Institutions Fund, the Credit
Union Fund, and the Local Agency Deposit Security Fund. However, if
the commissioner pays an expense of the department from an account or
fund from which the expense is not, except for this section,
permitted to be paid, the commissioner shall, as of a date within
that fiscal year, reimburse the account or fund from which the
expense was paid by making a transfer from the account or fund from
which the expense would have been permitted to be paid.
  SEC. 126.  The heading of Article 6 (commencing with Section 280)
of Chapter 2 of Division 1 of the Financial Code is repealed.


      Article 6.  General Operational Provisions


  SEC. 127.  Section 280 of the Financial Code is amended and
renumbered to read:
    280.   450.   (a) In this section,
"governmental agency" includes, without limitation, any agency of
this state, of any other state of the United States, of the United
States, or of any foreign nation.
   (b) The commissioner may furnish information to a governmental
agency that regulates financial institutions.
   (c) The commissioner may furnish to a governmental agency that
administers a loan guarantee or similar program, information relating
to a person who participates in the program.
   (d) The commissioner may furnish to a governmental agency that
regulates business activities, other than the type described in
subdivision (b), information relating to any of the following:
   (1) A suspected violation of a law administered by the agency.
   (2) A person involved in an application to the agency for a
license, approval, or other authorization.
   (e) The commissioner may furnish to a governmental agency that is
a law enforcement agency information relating to a suspected crime.
   (f) The commissioner may furnish information to any person who
provides share insurance or guaranty of the shares of a credit union
in accordance with Section 14858, 16004, or 16503.
   (g) The commissioner may furnish confidential information
regarding a licensee to the directors, officers, employees,
attorneys, accountants, and consultants of that licensee in
accordance with Section  282   452  .
   (h) This section does not prescribe the only circumstances under
which the commissioner may furnish information.
  SEC. 128.  Section 281 of the Financial Code is amended and
renumbered to read:
    281.   451.   With the prior approval
of the commissioner, a foreign (other state) or foreign (other
nation) financial institutions regulatory agency may examine a
licensee and any of its offices, provided that the agency has a
regulatory interest in the licensee. Any regulatory agency approved
by the commissioner under this section shall be considered a
supervisory agency under subdivision (f) of Section 7480 of the
Government Code.
  SEC. 129.  Section 282 of the Financial Code is amended and
renumbered to read:
    282.   452.   (a) Directors, officers,
employees, attorneys, accountants, or consultants of a licensee may
not disclose in any manner to any person confidential information
regarding the licensee received from the commissioner. The
prohibition in this section shall not apply to disclosures of
confidential information by directors, officers, employees,
attorneys, accountants, or consultants of the licensee:
   (1) Made pursuant to a subpoena or other discovery proceeding.
   (2) Made to any state or federal prosecuting or investigatory
agency or authority.
   (3) Made to any state, federal, or foreign (other nation)
financial institutions regulatory agency that has a direct regulatory
interest in the licensee.
   (4) Made to any state or federal taxing agency.
   (5) Made as otherwise required by law.
   (6) Made as otherwise authorized by the commissioner in writing.
   (b) Any director, officer, employee, attorney, accountant, or
consultant that discloses confidential information in a manner other
than allowed by this section shall be liable for a civil penalty not
to exceed fifty thousand dollars ($50,000). The commissioner may
impose a penalty under this section in accordance with the procedures
set forth in Section  216.3   329  .
   (c) The prohibition set forth in subdivision (a) shall not apply
to any discussion, analysis, or other use of confidential information
provided by the commissioner that occurs between directors,
officers, employees, attorneys, accountants, or consultants of the
licensee.
  SEC. 130.  Section 283 of the Financial Code is amended and
renumbered to read:
    283.   453.  Every licensee shall make
and file with the commissioner whenever required by him or her a
report in any form as the commissioner may prescribe and verified in
any manner the commissioner prescribes, showing its financial
condition and any other information as the commissioner may require
at the close of business on any day designated by him or her. Any
verification shall state that each of the officers making the
verification has a personal knowledge of the matters in the report
and that each of them believes that each statement in the report is
true.
  SEC. 131.  Section 284 of the Financial Code is amended and
renumbered to read:
    284.   454.   The commissioner shall
call for the report specified in Section 283 from all licensees at
least four times each year upon dates selected by the commissioner.
  SEC. 132.  Section 285 of the Financial Code is amended and
renumbered to read:
    285.   455.   The commissioner may at
any time require any licensee to make and file with him or her a
special report furnishing any information as the commissioner may
specify when necessary to inform him or her fully of the actual
financial condition and all other affairs of the licensee. The
reports shall be in the form and filed on a date prescribed by the
commissioner and shall, if required by the commissioner, be verified
in any manner that he or she prescribes.
  SEC. 133.  Section 286 of the Financial Code is amended and
renumbered to read:
    286.   456.   Every licensee shall keep
its corporate records, financial records, and books of account in
words and figures of the English language and in form satisfactory to
the commissioner.
  SEC. 134.  Section 287 of the Financial Code is amended and
renumbered to read:
    287.   457.  Every licensee shall
notify the commissioner of any change in the following officers of
the licensee, to the extent that those officers exist within the
licensee: chairperson, chief executive officer, president, general
manager, managing officer, chief financial officer, or chief credit
officer.
  SEC. 135.  Section 288 of the Financial Code is amended and
renumbered to read:
    288.   458.   (a) Each report required
under this  article   chapter  , or under
any other provision of law administered by the commissioner, shall be
filed with the commissioner at the time that the commissioner may
require. If any licensee fails to make any required report at the
time specified by the commissioner or fails to include therein any
matter required by this  article   chapter 
, any provision of law administered by the commissioner, or by the
commissioner, it shall be liable to the people of this state in the
sum of not more than one hundred dollars ($100) for each day that the
report is delayed or withheld by the failure or neglect of the
licensee.
   (b) The provisions of Section  216.3   329
 shall not apply to this section.
  SEC. 136.  Section 289 of the Financial Code is amended and
renumbered to read:
    289.   459.   (a) Every licensee shall
file with the commissioner one copy of all material filed by the
licensee with any applicable federal financial institutions
regulatory agency, law enforcement agency, or other federal agency
that is required to be filed by law or order of the agency.
   (b) Each copy required to be filed pursuant to subdivision (a)
shall be filed with the commissioner on or before the date upon which
the original is filed with the federal regulatory agency and shall
be available for inspection by the public except to the extent the
information contained therein is accorded confidential treatment
under federal law or regulations. That material shall be open for
inspection by the Attorney General.
  SEC. 137.  Section 290 of the Financial Code is amended and
renumbered to read:
    290.   460.   Any person intentionally
making a false statement in any report required to be rendered under
this article or other provision of law administered by the
commissioner is guilty of perjury.
  SEC. 138.  Section 291 of the Financial Code is amended and
renumbered to read:
    291.   461.   Any debt due a licensee
on which interest is past due and unpaid for the period of one year
shall be charged off, unless the debt is well secured or is in
process of collection.
  SEC. 139.  Section 292 of the Financial Code is amended and
renumbered to read:
    292.   462.   Any person that provides
services to any licensee, at the request of the commissioner, shall
submit to an examination by the commissioner. Should the commissioner
deem it necessary or desirable that an examination be made of a
person, the examination shall be made at the expense of the person
examined. If the person refuses to permit an examination to be made,
the commissioner may order every licensee receiving services from
that person to discontinue receiving those services or otherwise
conducting business with that person, and the licensees shall comply
with that order.
  SEC. 140.  Section 292.5 of the Financial Code is amended and
renumbered to read:
    292.5.   463.   (a) All references in
this code and the Corporations Code to financial statements, balance
sheets, income statements, and statements of changes in financial
position of a licensee, and all references to assets, liabilities,
earnings, retained earnings, shareholders' equity, net worth, and
similar accounting items of a licensee, mean those financial
statements or those items prepared or determined in conformity with
generally accepted accounting principles then applicable in the
United States, fairly presenting in conformity with generally
accepted accounting principles accepted in the United States the
matters which they purport to present, subject to any specific
accounting treatment required by any applicable provision of the
Corporations Code, this code, or any regulation, order issued by the
commissioner, or agreement entered into by the commissioner and a
licensee.
   (b) The commissioner may, by regulation or order, require that any
financial statement or accounting item of a licensee be prepared or
determined in a manner other than in conformity with generally
accepted accounting principles accepted in the United States if the
commissioner finds that such other manner is necessary or appropriate
to carry out the purposes or provisions of this code.
  SEC. 141.  Section 293 of the Financial Code is amended and
renumbered to read:
    293.   464.   (a) An officer of a
financial institution, within the meaning of Section 1101(1) of the
federal Right to Financial Privacy Act of 1978 (12 U.S.C. Sec. 3401
(1)), shall furnish the State Department of Health Care Services or
its designee with information in the possession of the bank or
company regarding the assets of any person who is applying for, or is
receiving assistance or benefits from, the State Department of
Health Care Services and has provided authorization pursuant to
Section 14013.5 of the Welfare and Institutions Code.
   (b) The obtaining of financial records by the State Department of
Health Care Services, or its designee, pursuant to this section shall
be subject to the cost reimbursement requirements of Section 1115(a)
of the federal Right to Financial Privacy Act of 1978 (12 U.S.C.
Sec. 3415(a)) and shall be at no cost to the applicant, recipient, or
any other person, as defined in paragraph (3) of subdivision (c) of
Section 14013.5 of the Welfare and Institutions Code.
   (c) An authorization obtained by the State Department of Health
Care Services, or its designee, under Section 14013.5 of the Welfare
and Institutions Code shall be considered as meeting the requirements
of Section 1103(a) of the federal Right to Financial Privacy Act of
1978 (12 U.S.C. Sec. 3403(a)) and, notwithstanding Section 1104(a) of
the federal Right to Financial Privacy Act of 1978 (12 U.S.C. Sec.
3404(a)), need not be furnished to the financial institution.
   (d) The certification requirements of Section 1103(b) of the
federal Right to Financial Privacy Act of 1978 (12 U.S.C. Sec. 3403
(b)) shall not apply to requests by the State Department of Health
Care Services, or its designee, pursuant to an authorization provided
under Section 14013.5 of the Welfare and Institutions Code.
   (e) A request by the State Department of Health Care Services, or
its designee, pursuant to an authorization provided under Section
14013.5 of the Welfare and Institutions Code shall be deemed to meet
the requirements of Section 1104(a)(3) of the federal Right to
Financial Privacy Act of 1978 (12 U.S.C. Sec. 3404(a)(3)) and of
Section 1102 of the act (12 U.S.C. Sec. 3402), relating to a
reasonable description of financial records.
  SEC. 142.  The heading of Article 7 (commencing with Section 295)
of Chapter 2 of Division 1 of the Financial Code is repealed.


      Article 7.  Enforcement


  SEC. 143.  Section 295 of the Financial Code is amended and
renumbered to read:
    295.  550.   In this article:
   (a) "Appropriate licensee business" means the business that a
licensee may conduct in accordance with the charter or license that
the commissioner has issued to that licensee.
   (b) "Customer" means a depositor of a bank, a member of a credit
union, or a customer of any other licensee.
   (c) "Holding company" shall have the meaning set forth in Section
3700.
   (d) "Officer of a subject institution" means any director,
officer, official, or employee of the subject institution.
   (e) "Person" means a subject institution or a subject person.
   (f) "Subject institution" means any of the following:
   (1) Licensee.
   (2) Subsidiary of a licensee.
   (3) Foreign (other state) or foreign (other nation) bank or credit
union that maintains an office in this state, with respect to any
such office other than a national bank or federal credit union.
   (4) Any other person lawfully conducting the business of a bank or
credit union in this state other than a national bank or federal
credit union.
   (g)  "Subject person," when used with respect to a subject
institution, means any of the following:
   (1) Director, officer, employee, or agent of the subject
institution.
   (2) Member, consultant, joint venture partner, or other person
that participates in the affairs of a subject institution.
   (3) Independent contractor, including any attorney, appraiser, or
accountant, who knowingly or recklessly participates in any of the
following acts if the act caused or is likely to cause more than a
minimal financial loss to, or a significant adverse effect on, the
subject institution:
   (A) A violation of any applicable law, regulation, or order.
   (B) A breach of fiduciary duty.
   (C) An unsafe or unsound act.
   (h)  "Violation" includes any act performed, alone or with other
persons, for or toward causing, bringing about, participating in,
counseling, aiding, or abetting a violation of any applicable
statute, regulation, provision of a written order issued by the
commissioner, or provision of a written agreement made between the
commissioner and a subject institution or subject person.
  SEC. 144.  Section 295.1 of the Financial Code is amended and
renumbered to read:
    295.1.   551.   Any subject person who
is entitled to a hearing pursuant to this article may waive that
right at any time. A waiver under this section shall relieve the
commissioner from having to issue a formal notice of hearing that
would otherwise be required by this article.
  SEC. 145.  Section 295.2 of the Financial Code is amended and
renumbered to read:
    295.2.   552.   (a) Within 30 days
after an order is issued pursuant to Section  297, 298.1,
299, 300.1, or 301.1   567, 581, 582, 586, or 591 
, or subdivision (c) of Section  300.2   587
 , the person to whom the order is issued may file with the
commissioner an application for a hearing on the order.
   (b) If the commissioner fails to commence the hearing within 15
business days after the application is filed with the commissioner or
within any longer period to which the person subject to the order
consents, the order shall be deemed rescinded.
   (c) Within 30 days after the hearing, or within any longer period
to which the person consents, the commissioner shall affirm, modify,
or rescind the order. If the commissioner fails to affirm, modify, or
rescind the order within that time limit, the order shall be deemed
rescinded.
   (d) The right to petition for judicial review of the order shall
not be affected by the failure of the person subject to the order to
apply to the commissioner for a hearing on the order pursuant to
subdivision (a).
  SEC. 146.  Section 295.3 of the Financial Code is amended and
renumbered to read:
    295.3.   553.   In addition to any
other action or requirement the commissioner deems necessary or
advisable, an order issued pursuant to Section  297.1, 298,
298.1, 299, 300, 300.1, or 300.2   567, 580, 581, 582,
585, or 587  may require the person subject to the order to do
any of the following:
   (a) Make restitution or provide reimbursement, indemnification, or
guarantee against loss, if the subject institution, subject person,
or holding company was unjustly enriched by the action or violation
or if the action or violation involved a reckless
                            disregard for any provision of this
division, of any regulation or order issued under this division, of
any other applicable law, or of any agreement with the commissioner.
   (b) Restrict the growth of the subject institution.
   (c) Dispose of any loan or other asset.
   (d) Correct violations of law.
   (e) Employ qualified officers or employees, who may be subject to
approval of the commissioner.
   (f) Limit the activities or functions of the subject institution,
subject person, or holding company.
  SEC. 147.  Section 295.4 of the Financial Code is amended and
renumbered to read:
    295.4.   554.   If the commissioner
takes possession of a subject institution without a prior notice or
hearing, or takes action against a subject person without prior
notice or hearing, the commissioner shall, upon taking possession or
taking that action, concurrently provide to the subject institution
or subject person a written order. The order shall set forth the
condition or conditions of the subject institution or action or
actions of the subject person that constitute the basis or bases for
the commissioner's action. In any case where the commissioner takes
possession of a subject institution, the commissioner shall
establish, by clear evidence, the basis for his or her action.
  SEC. 148.  Section 298 of the Financial Code is amended and
renumbered to read:
    298.   580.   If, after notice and an
opportunity to be heard, the commissioner finds any of the factors
set forth in subdivision (a) or (b) with respect to any subject
institution, subject person, or any holding company, the commissioner
may order the subject institution, subject person, or holding
company to cease and desist from the act or violation:
   (a) That the subject institution, subject person, or holding
company has engaged or participated, is engaging or participating, or
that there is reasonable cause to believe that the subject
institution, subject person, or holding company is about to engage or
participate, in any unsafe or unsound act with respect to the
business of the subject institution.
   (b) That the subject institution, subject person, or holding
company has violated, is violating, or that there is reasonable cause
to believe that the subject institution, subject person, or holding
company is about to violate any:
   (1) Provision of any division subject to the jurisdiction of the
commissioner.
   (2) Provision of any regulation promulgated by, or subject to the
jurisdiction of, the commissioner.
   (3) Provision of any other applicable law.
   (4) Provision of any written agreement between the subject
institution, subject person, or holding company, and the
commissioner.
  SEC. 149.  Section 298.1 of the Financial Code is amended and
renumbered to read:
    298.1.   581.   If the commissioner
finds that any of the factors set forth in Section 298 is true with
respect to any subject institution, subject person, or holding
company, and that the action, omission, or violation is likely to
have any of the consequences set forth in subdivisions (a) to (d),
inclusive, the commissioner may, without any prior notice or
opportunity to be heard, order the subject institution or subject
person to cease and desist from the following:
   (a) Any act, omission, or violation that may cause the insolvency
of the subject institution.
   (b) Any act, omission, or violation that may cause significant
dissipation of the assets or earnings of the subject institution.
   (c) Any act, omission, or violation that may weaken the condition
of the subject institution.
   (d) Any act, omission, or violation that may otherwise prejudice
the interests of the customers of the subject institution.
  SEC. 150.  Section 299 of the Financial Code is amended and
renumbered to read:
    299.   582.   If the commissioner finds
that a subject institution's books or records are so incomplete or
inaccurate that the commissioner is unable through the normal
supervisory process to determine the financial condition of the
subject institution or the details or purpose of any transaction or
transactions that may materially affect the financial condition of
the subject institution, the commissioner may, without any prior
notice or hearing, order the subject institution to do either of the
following:
   (a) Cease any activity or practice that gave rise, in whole or in
part, to the incomplete or inaccurate state of the books or records.
   (b) Take affirmative action to restore the books or records to a
complete and accurate state.
  SEC. 151.  The heading of Chapter 3 (commencing with Section 300)
is added to Division 1 of the Financial Code, to read:
      CHAPTER 3.  DEPARTMENT OF FINANCIAL INSTITUTIONS


  SEC. 152.  The heading of Article 1 (commencing with Section 300)
is added to Chapter 3 of Division 1 of the Financial Code, to read:

      Article 1.  General Provisions


  SEC. 153.  Section 300 of the Financial Code is amended and
renumbered to read:
    300.   585.   If, after notice and an
opportunity to be heard, the commissioner finds that any of the
factors set forth in subdivision (a), any of the factors set forth in
subdivision (b), and any of the factors set forth in subdivision (c)
are true with respect to a subject person of a subject institution
or holding company, the commissioner may issue an order suspending or
removing the subject person from the subject person's office, if
any, with the subject institution or holding company, and prohibiting
the subject person from participating in any manner in the conduct
of the affairs of the subject institution or holding company without
the approval of the commissioner:
   (a) (1) That the subject person has, directly or indirectly,
violated, or has caused a subject institution to violate, any
provision of any:
   (A) Division subject to the jurisdiction of the commissioner.
   (B) Regulation promulgated by, or subject to the jurisdiction of,
the commissioner.
   (C) Other applicable law.
   (D) Order issued by the commissioner or under the commissioner's
authority.
   (E) Written agreement between the subject institution, subject
person, or holding company and the commissioner.
   (2) That the subject person has, directly or indirectly, engaged
or participated in any unsafe or unsound act in connection with the
business of the subject institution, holding company, or any other
business institution.
   (3) That the subject person has, directly or indirectly, engaged
or participated in any act that constitutes a breach of the subject
person's fiduciary duty.
   (b) That, by reason of the act, violation, or breach of fiduciary
duty described in subdivision (a):
   (1) The subject institution, holding company, or business
institution has suffered or will probably suffer financial loss or
other harm.
   (2) The rights or interests of the customers or members of the
subject institution have been or could be prejudiced.
   (3) The subject person has received financial gain or other
benefit.
   (c) That the act, violation, or breach of fiduciary duty described
in subdivision (a) either involves dishonesty on the part of the
subject person or demonstrates the subject person's willful or
continuing disregard for the safety or soundness of the subject
institution, holding company, or business institution.
  SEC. 154.  Section 300.1 of the Financial Code is amended and
renumbered to read:
    300.1.   586.   If the commissioner
finds that any of the factors set forth in subdivision (a) of Section
 300   585  , any of the factors set forth
in subdivision (b) of Section 300, and any of the factors set forth
in subdivision (c) of Section  300   585 
are true with respect to a subject person of a subject institution,
and that it is necessary or advisable for the protection of the
subject institution or holding company, or the rights or interests of
the customers or members of the subject institution, the
commissioner may, without any prior notice or opportunity to be
heard, issue an order suspending the subject person from the subject
person's office, if any, with the subject institution or holding
company, and prohibiting the subject person from participating in any
manner in the conduct of the affairs of the subject institution or
holding company without the prior approval of the commissioner.
  SEC. 155.  Section 300.2 of the Financial Code is amended and
renumbered to read:
    300.2.   587.   (a) If the commissioner
finds that any of the factors set forth in paragraph (1) and the
factor set forth in paragraph (2) are true with respect to a subject
person or former subject person of a subject institution or holding
company, the commissioner may, without any prior notice or
opportunity to be heard, issue an order suspending the subject person
or former subject person from his or her office, if any, with the
subject institution or holding company and prohibiting him or her
from further participating in any manner in the conduct of the
affairs of the subject institution or holding company without the
approval of the commissioner:
   (1) That the subject person or former subject person has been
charged in an indictment issued by a grand jury or in an information,
complaint, or similar pleading issued by a United States attorney,
district attorney, or other governmental official or agency
authorized to prosecute crimes, with commission of or participation
in any of the following:
   (A) A crime that involves dishonesty or breach of trust and that
is punishable by imprisonment for a term exceeding one year.
   (B) A criminal violation of any provision of this division.
   (C) A criminal violation of Section 1956, 1957, or 1960 of Title
18 of, or Section 5322 or 5324 of Title 31 of, the United States
Code.
   (D) A criminal violation of a law of any jurisdiction other than
the United States that is substantially similar to any of the
statutes specified in subparagraph (C).
   (2) That continued or resumed service or participation by the
subject person or former subject person may pose a threat to the
rights or interests of the customers or members of the subject
institution or may threaten to impair public confidence in the
subject institution.
   (b) An order issued pursuant to subdivision (a) shall remain in
effect until the indictment or the information, complaint, or similar
pleading is finally disposed of or, if the order is earlier
terminated by the commissioner, until the order is so terminated.
   (c) If the commissioner finds that the factors set forth in
paragraphs (1) and (2) are true with respect to a subject person or
former subject person of a subject institution or holding company,
the commissioner may, without any prior notice or opportunity to be
heard, issue an order suspending or removing the subject person or
former subject person from his or her office, if any, with the
subject institution or holding company and prohibiting him or her
from further participating in any manner in the affairs of the
subject institution or holding company without the approval of the
commissioner:
   (1) That the subject person or former subject person has been
finally convicted of any crime of the type described in paragraph (1)
of subdivision (a). For purposes of this paragraph, an agreement to
enter a pretrial diversion or similar program is deemed to be a
conviction.
   (2) That continued or resumed service or participation by the
subject person or former subject person may pose a threat to the
interests of the customers of the subject institution or may threaten
to impair public confidence in the subject institution.
   (d) The fact that any subject person of a subject institution
charged with a crime of the type described in paragraph (1) of
subdivision (a) is not finally convicted of the crime does not
preclude the commissioner from issuing an order regarding the subject
person pursuant to any other provision of this article.
  SEC. 156.  Section 300.3 of the Financial Code is amended and
renumbered to read:
    300.3.   588.   (a) Any subject
institution, subject person of a subject institution, or former
subject person of a subject institution to whom an order is issued
under Sections  300   585  to 
300.2   587  , inclusive, may apply to the
commissioner to modify or rescind the order. In deciding whether to
grant or deny the application, the commissioner shall consider
whether it is in the public interest to modify or rescind the order
and whether it is reasonable to believe that the subject person or
former subject person will, if and when he or she becomes a subject
person of a subject institution or holding company, comply with all
applicable provisions of law, or any regulation or order issued by
the commissioner.
   (b) The right of any subject person or former subject person of a
subject institution or holding company to whom an order is issued
under Sections  300   585  to 
300.2   587  , inclusive, to petition for judicial
review of the order shall not be affected by the failure of the
subject institution or holding company to apply to the commissioner
pursuant to subdivision (a) to modify or rescind the order.
  SEC. 157.  Section 300.4 of the Financial Code is amended and
renumbered to read:
    300.4.   589.   (a) In this section,
"subject depository institution" means any:
   (1) Licensee or any bank or credit union that maintains an office
in this state.
   (2) Affiliate of any of the institutions specified in paragraph
(1).
   (3) Subsidiary of any of the institutions specified in paragraph
(1).
   (4) Holding company of any of the institutions specified in
paragraph (1).
   (b) It is unlawful for any subject person or former subject person
of a subject institution to whom an order is issued under Sections
 300   585  to  300.2 
 587  , inclusive, willfully to do, directly or indirectly,
any of the following without the approval of the commissioner, so
long as the order is in effect:
   (1) Act as a subject person of any subject depository institution.

   (2) Vote any shares or other securities having voting rights for
the election of any person as a director of a subject depository
institution.
   (3) Solicit, procure, transfer or attempt to transfer, or vote any
proxy, consent, or authorization with respect to any shares or other
securities of a subject depository institution having voting rights.

   (4) Otherwise to participate in any manner in the affairs of any
subject depository institution.
  SEC. 158.  Section 301 of the Financial Code is amended and
renumbered to read:
    301.   590.   The commissioner may
revoke or suspend any license issued by, or under the authority of,
the commissioner, if, after notice and opportunity to be heard, the
commissioner finds any of the following:
   (a) The licensee has violated, is violating, or that there is
reasonable cause to believe that the licensee is about to violate,
any provision of any of the following:
   (1) Any division subject to the jurisdiction of the commissioner.
   (2) Any regulation promulgated by, or subject to the jurisdiction
of, the commissioner.
   (3) A provision of any other applicable law.
   (4) A provision of any order issued by the commissioner.
   (5) A provision of any written agreement between the licensee and
the commissioner.
   (6) A condition imposed on any written approval granted by the
commissioner.
   (b) Any fact or condition exists which, if it had existed at the
time of the original application for the license, would be grounds
for denying the application for the license.
   (c) The licensee is conducting its business in an unsafe manner.
   (d) The licensee is in such condition that it is unsafe or unsound
for the licensee to transact appropriate licensee business.
   (e) The licensee has inadequate capital or net worth or is
insolvent.
   (f) The licensee failed to pay any of its obligations as they came
due or is reasonably expected to be unable to pay its obligations as
they come due.
   (g) The licensee is the subject of an order for relief in
bankruptcy, or has sought other relief under any bankruptcy,
reorganization, insolvency, or moratorium law, or any person has
applied for any such relief under any such law against the licensee
and the licensee has by any affirmative act approved of, or consented
to, the action or the relief has been granted.
   (h) The licensee has ceased to transact appropriate licensee
business.
   (i) The licensee refuses to submit its books, papers, and affairs
to the inspection of any examiner.
   (j) Any officer of the licensee refuses to be examined upon oath
touching the concerns of the licensee.
   (k) The licensee has, with the approval of its board, requested
the commissioner to take possession of its property and business.
  SEC. 159.  Section 301.1 of the Financial Code is amended and
renumbered to read:
    301.1.   591.   If the commissioner
finds that any of the factors set forth in Section 301 is true with
respect to any licensee and that it is necessary for the protection
of the public interest, the commissioner may issue an order
immediately suspending or revoking the licensee's license.
  SEC. 160.  Section 302 of the Financial Code is amended and
renumbered to read:
    302.   592.   If the commissioner finds
that any of the factors set forth in subdivisions (a) to (k),
inclusive, is true with respect to a licensee, the commissioner may
by order, without any prior notice or opportunity to be heard, take
possession of the property and business of the licensee:
   (a) The licensee has violated any provision of (1) any division
subject to the jurisdiction of the commissioner, (2) any regulation
promulgated by, or subject to the jurisdiction of, the commissioner,
(3) any provision of any other applicable law, (4) any provision of
any order issued by the commissioner, (5) any provision of any
written agreement made between the commissioner and the licensee, or
(6) a condition imposed on any written approval granted by the
commissioner.
   (b) The licensee is conducting its business in an unsafe or
unsound manner.
   (c) The licensee is in such condition that it is unsafe or unsound
for the licensee to transact appropriate licensee business.
   (d) The licensee has inadequate capital or net worth or is
insolvent.
   (e) If the licensee is a bank, the tangible shareholders' equity
of the bank is less than the following:
   (1) If the bank is a commercial bank or industrial bank, the
greater of three percent of the bank's total assets or one million
dollars ($1,000,000).
   (2) If the bank is a trust company other than a commercial bank
authorized to engage in trust business, one million dollars
($1,000,000).
   (f) The licensee failed to pay any of its obligations as they came
due or is reasonably expected to be unable to pay its obligations as
they come due.
   (g) The licensee has applied for an adjudication of bankruptcy,
reorganization, arrangement, or other relief under any bankruptcy,
reorganization, insolvency, or moratorium law, or that any person has
applied for any such relief under any such law against the licensee
and the licensee has by any affirmative act approved of or consented
to the action or the relief has been granted.
   (h) The licensee has ceased to transact the business the licensee
is authorized to conduct pursuant to its license.
   (i) The licensee refuses to submit its books, papers, and affairs
to the inspection of any examiner.
   (j) Any officer of the licensee refuses to be examined upon oath
touching the concerns of the licensee.
   (k) The licensee has, with the approval of its board, requested
the commissioner to take possession of its property and business.
  SEC. 161.  Section 302.1 of the Financial Code is amended and
renumbered to read:
    302.1.   593.   (a) If the commissioner
takes possession of the property and business of a licensee pursuant
to Section  302   592  , the licensee may,
within 10 days, apply to the superior court in the county where its
head office is located to enjoin further proceedings. The court may,
after citing the commissioner to show cause why further proceedings
should not be enjoined and after a hearing, dismiss the application
or enjoin the commissioner from further proceedings and order the
commissioner to surrender the property and business of the licensee
to the licensee or make any further order as may be just. The
judgment of the court may be appealed by the commissioner or by the
licensee as allowed by law.
   (b) At any time after the commissioner takes possession of the
property and business of a licensee pursuant to Section 302, the
licensee may, with the approval of the commissioner, resume business
upon conditions as the commissioner may prescribe.
  SEC. 162.  Section 302.2 of the Financial Code is amended and
renumbered to read:
    302.2.   594.   (a) Upon taking
possession of the property and business of any licensee, the
commissioner shall give notice of that fact to all persons holding or
having in their possession any assets of the licensee. No person
knowing of the taking, or who has been notified thereof, shall have a
lien or charge upon any assets of the licensee for any payment,
advance, or clearance thereafter made or for any liability thereafter
incurred.
   (b) The giving of notice in accordance with this section shall not
be deemed to be a prerequisite to the taking of possession of the
property and business of the licensee.
  SEC. 163.  Section 302.3 of the Financial Code is amended and
renumbered to read:
    302.3.  595.   The commissioner is
deemed to take possession of the entire property and business of a
licensee when the commissioner takes possession of the business and
property of the head office of the licensee.
  SEC. 164.  The heading of Article 8 (commencing with Section 305)
of Chapter 2 of Division 1 of the Financial Code is repealed.


      Article 8.  Liquidation and Conservation


  SEC. 165.  Section 305 of the Financial Code is amended and
renumbered to read:
    305.   600.   In this article, "Federal
Insurance Agency" means the Federal Deposit Insurance Corporation or
the National Credit Union Administration, as appropriate, or their
respective successors-in-interest.
  SEC. 166.  Section 305.1 of the Financial Code is amended and
renumbered to read:
    305.1.   601.   Upon taking possession
of the property and business of any licensee, the commissioner has
authority, and it is his or her duty, to collect all moneys due to
the licensee and to do other acts as are necessary or expedient to
collect, conserve, or protect the licensee's assets, property, and
business, and he or she shall proceed to conserve or liquidate the
affairs of the licensee as provided in this article.
  SEC. 167.  Section 305.2 of the Financial Code is amended and
renumbered to read:
    305.2.   602.   No attachment shall be
issued against the property of any licensee subject to conservation
or liquidation pursuant to this article.
  SEC. 168.  Section 305.3 of the Financial Code is amended and
renumbered to read:
    305.3.   603.   Upon taking possession
of the property and business of any licensee pursuant to Section
 302   592  , the commissioner may proceed
to liquidate or conserve the licensee in the manner provided by this
article.
  SEC. 169.  Section 305.4 of the Financial Code is amended and
renumbered to read:
    305.4.   604.   Upon taking possession
of the property and business of a licensee pursuant to Section
 302   592  , the commissioner may tender
to any person or persons an appointment as conservator, liquidator,
receiver, or liquidating committee of the licensee.
  SEC. 170.  Section 305.5 of the Financial Code is amended and
renumbered to read:
    305.5.   605.   The commissioner shall
supervise the acts of the conservator, liquidator, receiver, or
liquidating committee appointed under this article and may remove the
conservator, liquidator, receiver, or any or all members of the
liquidating committee in his or her discretion.
  SEC. 171.  Section 305.6 of the Financial Code is amended and
renumbered to read:
    305.6.   606.   If required by the
commissioner, the conservator, liquidator, receiver, or members of
the liquidating committee appointed under this article shall provide
proof of bond coverage that extends to the conservator, liquidator,
receiver, or members of the liquidating committee. The bond shall
include fraud, dishonesty, and faithful performance coverage. The
premium for that bond shall be paid out of the assets of the
licensee.
  SEC. 172.  Section 305.7 of the Financial Code is amended and
renumbered to read:
    305.7.   607.   (a) If the commissioner
retains possession of the assets of the licensee for the purpose of
liquidation or conservation, the commissioner shall, to the extent
possible, use the services of civil service employees of the
commissioner's office, and the attorneys employed by the commissioner
or the Department of Justice shall render all necessary legal
services, as the commissioner may request.
   (b) The commissioner, from time to time, under his or her official
seal, may appoint one or more special deputy commissioners as his or
her agent or agents with the powers specified in the certificate of
appointment to assist him or her in the duties of conservation or of
liquidation and distribution. The certificate of appointment shall be
filed in the office of the commissioner and a certified copy in the
office of the clerk of the county in which the head office of the
licensee is located. The commissioner may employ counsel and procure
expert assistance and advice as may be necessary in the liquidation
and distribution of the assets of the licensee and for that purpose
may retain any of the officers or employees of the licensee as the
commissioner may deem necessary.
  SEC. 173.  Section 305.8 of the Financial Code is amended and
renumbered to read:
    305.8.   608.   The compensation of
civil service employees, special deputies, counsel, and other
employees and assistants appointed to assist in the conservation or
liquidation of any licensee and the distribution of its assets and
all expenses of supervision and liquidation shall be fixed by the
commissioner and shall be paid out of the funds of the licensee in
the hands of the commissioner. The expenses of liquidation shall be
reported to the court upon each application for payment of a
dividend.
  SEC. 174.  Section 305.9 of the Financial Code is amended and
renumbered to read:
    305.9.   609.   If a licensee is not
insured by a Federal Insurance Agency, upon the commissioner taking
possession of the business and property of the licensee, the superior
court of the State of California for the county in which the head
office of the licensee is located shall have exclusive original
jurisdiction of                                                   all
proceedings relating thereto and of any action or other proceedings
brought under the provisions of this article. All papers relating to
the proceeding, including copies of the certificate of appointment of
any special deputy and the inventories required to be filed, shall
be filed and be made a part of the record of the proceeding without
the payment of any additional fees. No damages may be awarded in the
proceeding but, if sought, may only be recovered in a separate
action.
  SEC. 175.  Section 310 of the Financial Code is amended and
renumbered to read:
    310.   620.   If the licensee whose
property and business has been taken pursuant to Section  302
  592  is insured by a Federal Insurance Agency,
the commissioner may tender to the appropriate Federal Insurance
Agency an appointment as conservator, liquidator, or receiver of the
licensee. The commissioner shall determine whether the licensee whose
property and business has been taken shall be liquidated or
conserved. If the Federal Insurance Agency accepts the appointment,
the Federal Insurance Agency shall have, in addition to any powers
conferred by applicable federal law, the powers conferred on the
commissioner pursuant to this article.
  SEC. 176.  Section 310.1 of the Financial Code is amended and
renumbered to read:
    310.1.   621.   The Federal Insurance
Agency may be, and act as, a conservator, liquidator, or receiver
without bond.
  SEC. 177.  Section 310.2 of the Financial Code is amended and
renumbered to read:
    310.2.   622.   If the Federal
Insurance Agency accepts the appointment in accordance with Section
 310.1   621  , the rights of customers and
other creditors of the insured licensee shall be determined in
accordance with the applicable provisions of the laws of this state.
  SEC. 178.  Section 310.3 of the Financial Code is amended and
renumbered to read:
    310.3.   623.   The Federal Insurance
Agency conservator, liquidator, or receiver shall possess with
respect to the insured licensee all the powers, rights, and
privileges given the commissioner under this article with respect to
the conservation or liquidation of a licensee, as appropriate, and
the property and assets of which he or she has taken possession,
except insofar as the same may be in conflict with the provisions of
applicable federal law.
  SEC. 179.  Section 310.4 of the Financial Code is amended and
renumbered to read:
    310.4.   624.   (a) The commissioner
may sell to any other licensee any part or the whole of the business
of a licensee that is subject to liquidation or conservatorship. The
purchase and sale shall be approved by the purchasing licensee, as
follows:
   (1) If the purchasing licensee is organized under the laws of this
state, by two-thirds of all of its directors.
   (2) If the licensee is any licensee other than a licensee
organized under the laws of this state, in accordance with the laws
of the jurisdiction under which the licensee is organized.
   (b) (1) Subject to any applicable federal statutes and
regulations, any bank or credit union organized under the laws of
this state may, with the approval of two-thirds of all of its
directors, purchase from the receiver of a national banking
association or a federal credit union the whole or any part of the
business of the national banking association or federal credit union.

   (2) Subject to any applicable federal statutes and regulations and
any applicable laws of the jurisdiction under which a foreign
corporation is organized, any foreign corporation or office of a
foreign corporation that is licensed by the commissioner to transact
business in this state and that is authorized to accept shares or
deposits in this state, may purchase from the receiver of a national
banking association or federal credit union the whole or any part of
the business of the national banking association or federal credit
union.
   (c) The provisions of Chapter 12 (commencing with Section 1200)
and Chapter 13 (commencing with Section 1300) of Division 1 of Title
1 of the Corporations Code shall not apply to any purchase and sale
of the type described in subdivision (a) or (b).
   (d) When a purchase and sale of the type described in subdivision
(a) or (b) becomes effective, the licensee shall, ipso facto and by
operation of law and without further transfer, substitution, act, or
deed, to the extent provided in the agreement of the purchase and
sale or in the order of the court approving the purchase and sale and
except as withheld or limited by the agreement or by the order:
   (1) Succeed to the rights, obligations, properties, assets,
investments, shares, deposits, demands, and agreements of the
licensee whose business is sold, subject to the right of every
customer of a licensee to withdraw his or her shares or deposit in
full on demand after the sale, irrespective of the terms under which
the share or deposit was made.
   (2) Succeed to the rights, obligations, properties, assets,
investments, shares, deposits, demands, and agreements of the
licensee whose business is sold under all trusts, executorships,
administrations, guardianships, conservatorships, agencies, and other
fiduciary or representative capacities, to the same extent as though
the purchasing licensee had originally assumed, acquired, or owned
the same, subject to the rights of trustors and beneficiaries under
the trusts so sold to nominate another or succeeding trustee of the
trust so sold after the sale.
   (3) Succeed to and be entitled to take and execute the appointment
to executorships, trusteeships, guardianships, conservatorships, and
other fiduciary and representative capacities to which the licensee
whose business is sold is or may be named in wills, whenever
probated, or to which it is or may be named or appointed by any other
instrument.
   (e) For purposes of subdivision (d), any purchase and sale of the
type referred to in subdivision (d) shall be deemed to be effective
at the time provided in the agreement of the purchase and sale or in
the order of the court approving the purchase and sale.
  SEC. 180.  Section 315 of the Financial Code is amended and
renumbered to read:
    315.   640.   Whenever the commissioner
deems it necessary in order to conserve the assets of any licensee
that does not have federal deposit or share insurance for the benefit
of the customers and other creditors, he or she may appoint a
conservator of the licensee and require the conservator to post a
bond as the commissioner deems proper. The conservator, under the
direction of the commissioner, shall take possession of the books,
records, and assets of every description of the licensee and take any
action as the conservator may deem necessary to conserve the assets
of the licensee pending further disposition of its business.
  SEC. 181.  Section 315.1 of the Financial Code is amended and
renumbered to read:
    315.1.   641.   A conservator appointed
in accordance with Section  315   640  has
all of the powers and rights with relation to the business and the
property of the licensee for which he or she is appointed conservator
as are possessed by the commissioner under this article with
relation to a licensee of which the commissioner has taken
possession, and the conservator is subject to the same obligations as
are imposed upon the commissioner under this article. During the
time that the conservator remains in possession of the licensee the
rights of the licensee, and of all persons with respect thereto,
subject to the other provisions of this article, are the same as if
the commissioner had taken possession of the property and business of
the licensee for the purposes of liquidation. All expenses of the
conservatorship shall be paid out of the assets of the licensee and
shall be a lien thereon which shall be prior to any other lien. The
conservator shall receive a salary in an amount no greater than that
which would be paid by the commissioner to a special deputy in charge
of the liquidation of a licensee.
  SEC. 182.  Section 315.2 of the Financial Code is amended and
renumbered to read:
    315.2.   642.   The commissioner may
order an examination at the earliest possible date of a licensee for
which the commissioner has appointed a conservator.
  SEC. 183.  Section 315.3 of the Financial Code is amended and
renumbered to read:
    315.3.   643.   While any licensee is
in the hands of a conservator, the commissioner may require the
conservator to set aside and make available for withdrawal by
customers and for payment to other creditors on a ratable basis such
amounts as in the opinion of the commissioner may safely be used for
that purpose.
  SEC. 184.  Section 315.4 of the Financial Code is amended and
renumbered to read:
    315.4.   644.   The commissioner, in
his or her discretion, may permit the conservator to receive shares
or deposits, but any shares or deposits received while the licensee
is in the hands of a conservator shall be held as trust funds and
shall not be subject to any limitation as to payment or withdrawal.
The shares or deposits shall be segregated and shall not be used to
liquidate any indebtedness of the licensee existing at the time the
conservator was appointed or for the payment of any later
indebtedness incurred for the purpose of liquidating any indebtedness
of the licensee existing at the time the conservator was appointed.
The shares or deposits shall be kept on hand in cash, invested in
direct obligations of the United States, or deposited with the
Federal Reserve Bank.
  SEC. 185.  Section 315.5 of the Financial Code is amended and
renumbered to read:
    315.5.   645.  If the commissioner is
satisfied that it may be done safely and that it would be in the
public interest, he or she may terminate a conservatorship and permit
the licensee for whom a conservator was appointed to resume the
transaction of its business under the direction of its board, subject
to any terms, conditions, restrictions, and limitations as the
commissioner may prescribe.
  SEC. 186.  Section 315.6 of the Financial Code is amended and
renumbered to read:
    315.6.   646.   The conservator of a
licensee that has been permitted to resume accepting member shares or
deposits shall first cause a notice to be published in a newspaper
of local circulation. The notice shall state the date on which the
affairs of the licensee will be returned to its board and that the
provisions of Section  315.4   644  will
not be effective after 30 days from that date. The form of the notice
and the newspaper in which the same is to be published shall be
first approved by the commissioner. On the date of the publication of
the notice, the conservator shall mail a copy of the notice to every
person who made any deposit in the licensee after the date of the
appointment of the conservator. The conservator shall address the
copy of the notice to the persons who have made the deposits at the
addresses appearing upon the books of the licensee. The conservator
shall also mail a similar notice to every person making a deposit in
the licensee after the date of the publication of the notice and
before the affairs of the licensee are returned to its board.
  SEC. 187.  Section 315.7 of the Financial Code is amended and
renumbered to read:
    315.7.   647.   The commissioner may
assess and collect from all licensees for whom a conservator is
appointed their ratable share of the costs incurred in the
administration of this article.
  SEC. 188.  Section 315.8 of the Financial Code is amended and
renumbered to read:
    315.8.   648.   Any licensee that the
commissioner has taken possession of pursuant to Section  302
  592  , and for which a conservator has been
appointed pursuant to this article, may be reorganized under a plan
that requires the consent of any of the following:
   (a) Customers and other creditors of the licensee representing at
least 75 percent in amount of its total member shares or deposits and
other liabilities as shown by the books of the licensee, excluding
member shares or deposits and other liabilities which are to be
satisfied in full under the provisions of the plan.
   (b) Stockholders owning at least two-thirds of the outstanding
stock as shown by the books of the licensee.
   (c) Members of the licensee.
   (d) Customers and other creditors of the licensee representing at
least 75 percent in amount of its total shares or deposits and other
liabilities as shown by the books of the licensee, excluding shares
or deposits and other liabilities that are to be satisfied in full
under the provisions of the plan, and, if applicable to the licensee,
of stockholders owning at least two-thirds of its outstanding stock
as shown by the books of the licensee.
  SEC. 189.  Section 315.9 of the Financial Code is amended and
renumbered to read:
    315.9.   649.   All customers,
creditors, stockholders, if applicable, and other interested persons
shall be given notice of any proposed plan of reorganization in the
manner and at the times as the commissioner directs.
  SEC. 190.  Section 315.10 of the Financial Code is amended and
renumbered to read:
    315.10.   650.   No plan of
reorganization shall become effective until the commissioner finds
that the plan is fair and equitable to all customers, creditors, and
stockholders, if applicable, and is in the public interest and until
the commissioner approves the same in writing, subject to any
conditions, restrictions, and limitations as the commissioner may
prescribe.
  SEC. 191.  Section 315.11 of the Financial Code is amended and
renumbered to read:
    315.11.   651.   No creditor having
security for the payment of his, her, or its claim shall be affected
in his, her, or its right to enforce the security by the provisions
of any plan for the reorganization of the licensee. Any plan of
reorganization involving the reduction of claims of creditors shall
apply only to that portion of a secured creditor's loan that is not
covered by the pledged security.
  SEC. 192.  Section 315.12 of the Financial Code is amended and
renumbered to read:
    315.12.   652.   When any plan of
reorganization becomes effective, all books, records, and assets of
the licensee shall be disposed of in accordance with the provisions
of the plan and the affairs of the licensee shall be conducted by its
board in the manner provided by the plan and under the conditions,
restrictions, and limitations that may have been prescribed by the
commissioner. When any plan of reorganization adopted and approved as
herein provided becomes effective, all customers and other creditors
and, if applicable, stockholders of the licensee, whether or not
they have consented to the plan of reorganization, shall be fully and
in all respects subject to and bound by the plan's provisions and
the claims of all customers and other creditors shall be treated as
if they had consented to the plan of reorganization.
  SEC. 193.  The heading of Article 2 (commencing with Section 320)
is added to Chapter 3 of Division 1 of the Financial Code, to read:

      Article 2.  Commissioner of Financial Institutions


  SEC. 194.  Section 320 of the Financial Code is amended and
renumbered to read:
    320.   670.   Upon taking possession of
the property and business of a licensee that does not have federal
deposit or share insurance, the commissioner may sell, compromise, or
compound any bad or doubtful debt owing the licensee for a principal
sum not exceeding ten thousand dollars ($10,000), upon those terms
as the commissioner may deem proper. If the principal sum thereof
exceeds ten thousand dollars ($10,000), the commissioner may
compromise, compound, or sell the debt upon those terms as the court
may approve. If it appears improbable that a recovery on a debt can
be had, and that the costs of an action to collect would be lost, and
the principal sum thereof does not exceed five hundred dollars
($500), the commissioner may determine that no suit thereon shall be
brought. If the principal sum of that debt exceeds ten thousand
dollars ($10,000), the commissioner may determine that no suit
thereon be brought after obtaining approval of the court.
  SEC. 195.  Section 320.1 of the Financial Code is amended and
renumbered to read:
    320.1.   671.   The commissioner may
sell any real or personal property of the licensee for cash or on
credit and on any other terms and conditions as the commissioner may
deem proper, subject to the approval of the court.
  SEC. 196.  Section 320.2 of the Financial Code is amended and
renumbered to read:
    320.2.   672.   (a) The commissioner
may, with the approval of the court, sell any part or the whole of
the business of a licensee to any other licensee. The purchase and
sale shall be approved by the purchasing licensee, as follows:
   (1) If the purchasing licensee is organized under the laws of this
state, by two-thirds of all of its directors.
   (2) If the licensee is any licensee other than a licensee
organized under the laws of this state, in accordance with the laws
of the jurisdiction under which the licensee is organized.
   (b) (1) Subject to any applicable federal statutes and
regulations, any bank or credit union organized under the laws of
this state may, with the approval of two-thirds of all of its
directors and of the commissioner, purchase from the receiver of a
national banking association or a federal credit union the whole or
any part of the business of the national banking association or
federal credit union.
   (2) Subject to any applicable federal statutes and regulations and
any applicable laws of the jurisdiction under which a foreign
corporation is organized, any foreign corporation or any office of a
foreign corporation that is licensed by the commissioner to transact
business in this state and that is authorized to accept shares or
deposits in this state, may, with the approval of the commissioner,
purchase from the receiver of a national banking association or
federal credit union the whole or any part of the business of the
national banking association or federal credit union.
   (c) The provisions of Chapter 12 (commencing with Section 1200)
and Chapter 13 (commencing with Section 1300) of Division 1 of Title
1 of the Corporations Code shall not apply to any purchase and sale
of the type described in subdivision (a) or (b).
   (d) When a purchase and sale of the type described in subdivision
(a) or (b) becomes effective, the purchasing licensee shall, by
operation of law and without further transfer, substitution, act, or
deed, to the extent provided in the agreement of the purchase and
sale or in the order of the court approving the purchase and sale and
except as withheld or limited by the agreement or by the order:
   (1) Succeed to the rights, obligations, properties, assets,
investments, shares, deposits, demands, and agreements of the
licensee whose business is sold, subject to the right of every
customer of the licensee whose shares or deposit is sold to withdraw
his or her shares or deposit in full on demand after the sale,
irrespective of the terms under which the deposit was made.
   (2) Succeed to the rights, obligations, properties, assets,
investments, shares, deposits, demands, and agreements of the whose
business is sold under all trusts, executorships, administrations,
guardianships, conservatorships, agencies, and other fiduciary or
representative capacities, to the same extent as though the
purchasing licensee had originally assumed, acquired, or owned the
same, subject to the rights of trustors and beneficiaries under the
trusts so sold to nominate another or succeeding trustee of the trust
so sold after the sale.
   (3) Succeed to and be entitled to take and execute the appointment
to executorships, trusteeships, guardianships, conservatorships, and
other fiduciary and representative capacities to which the licensee
whose business is sold is or may be named in wills, whenever
probated, or to which it is or may be named or appointed by any other
instrument.
   (e) For purposes of subdivision (d), any purchase and sale of the
type referred to in subdivision (d) shall be deemed to be effective
at the time provided in the agreement of the purchase and sale or in
the order of the court approving the purchase and sale.
  SEC. 197.  Section 320.3 of the Financial Code is amended and
renumbered to read:
    320.3.  673.   Within six months after
taking possession of the property and business of any licensee that
does not have federal deposit or share insurance, the commissioner
may terminate or adopt any executory contract to which the licensee
may be a party, including leases of real or personal property. Claims
for damages resulting from the termination of any contract or lease
may be filed and allowed, but no claim of a landlord for damages
resulting from the rejection of an unexpired lease of real property
or under any covenant of the lease shall be allowed in an amount
exceeding the rent reserved by the lease, without acceleration, for
the year succeeding the date of the surrender of the premises plus
the amount of any unpaid accrued rent without acceleration. Any claim
shall be filed within 30 days of the date of the termination or
within the time that claims are to be filed under Section 320.10,
whichever is longer.
  SEC. 198.  Section 320.4 of the Financial Code is amended and
renumbered to read:
    320.4.   674.   The commissioner, in
his or her own name or in the name of the licensee, may execute,
acknowledge, and deliver any and all conveyances and other
instruments necessary or appropriate to effectuate the sale of any
real or personal property or to effectuate any other transaction in
connection with the liquidation of a licensee or the distribution of
its assets. Any conveyance or other instrument executed by the
commissioner pursuant to this authority shall be valid and effectual
for all purposes as though the same had been executed by the officers
of the licensee by authority of its board of directors. Whenever the
commissioner sells any real property of the licensee a certified
copy of the order of the court approving the sale shall be recorded
in the county in which any part of the real property is located.
  SEC. 199.  Section 320.5 of the Financial Code is amended and
renumbered to read:
    320.5.   675.   The commissioner, in
the name of the delinquent licensee or in his or her own name, may
prosecute and defend any and all actions and other legal proceedings
appropriate or necessary to the liquidation of the licensee.
  SEC. 200.  Section 320.6 of the Financial Code is amended and
renumbered to read:
    320.6.   676.   The commissioner from
time to time shall deposit all moneys coming into his or her hands in
the course of the liquidation of the licensee in one or more state
banks or state credit unions and in the event of the suspension or
insolvency of the depositary shall be preferred before all other
deposits.
  SEC. 201.  Section 320.7 of the Financial Code is amended and
renumbered to read:
    320.7.   677.   The commissioner shall
make an inventory of the assets of the licensee in duplicate and file
one in the office of the commissioner and one with the clerk of the
county in which the head office of the licensee is located to be
filed with the papers in the liquidation proceedings. The inventory
shall be open for inspection at all reasonable times.
  SEC. 202.  Section 320.8 of the Financial Code is amended and
renumbered to read:
    320.8.   678.   When the time fixed for
the presentation of claims has expired, the commissioner shall make
in duplicate a full and complete list of all claims presented,
including and specifying claims that have been rejected by the
commissioner, and a list of all claims of customers as shown by the
books or records of the licensee for which claims have not yet been
presented, and shall file one copy of the list in the commissioner's
office and one with the clerk of the county in which the head office
of the licensee is located to be filed with the papers in the
liquidation proceedings. Before each application to the court for
leave to declare a dividend, the commissioner shall file a
supplemental list of claims presented since the last preceding list
was filed, including and specifying any claims that have been
rejected by him or her. The list of claims and of claims of customers
as shown by the books or records of the licensee shall be open for
inspection at all reasonable times.
  SEC. 203.  Section 320.9 of the Financial Code is amended and
renumbered to read:
    320.9.   679.   The commissioner shall
cause notice to be given by advertisement in any newspapers of
general circulation as he or she may select weekly for three
consecutive months, calling on all persons who have claims against
the licensee to present the same to the commissioner and make legal
proof thereof at a place to be specified therein and within four
months of the date of the first publication of the notice, which date
shall be specified in the notice. The notice shall also state that
all claims other than those of customers appearing upon the books or
records of the licensee shall be forever barred if not filed within
the four months' period and that all claims of customers appearing
upon the books or records of the licensee will be forever barred,
except as herein provided, if not filed prior to the filing of a
petition for a final dividend. The commissioner shall also mail a
similar notice to all persons, including customers whose names appear
as creditors upon the books of the licensee and whose addresses
appear upon the books or records of the licensee, and shall enclose
therewith a printed form of notice of claim.
  SEC. 204.  Section 320.10 of the Financial Code is amended and
renumbered to read:
    320.10.   680.   All claims of every
kind against the licensee or against any property owned or held by
the licensee shall be presented to the commissioner in writing
verified by the claimant or someone on his or her behalf within four
months of the date of the first publication of the notice to
creditors. Any claim, other than the claim of a customer whose claim
appears upon the books or records of the licensee, not presented
within the four months' period shall be forever barred and any claim
of a customer whose claim appears upon the books or records of the
licensee that is not so presented prior to the date of the filing of
the petition of the commissioner with the court for approval of the
payment of the final dividend shall be forever barred except as to
any moneys remaining after all debts for which claims were duly filed
have been paid in full with interest. If the commissioner doubts the
validity of any claim, he or she may reject the claim and serve
notice of the rejection upon the claimant either by mail or
personally. An affidavit of the
           mailing or personal service of the notice shall be prima
facie evidence of the receipt thereof and shall be filed with the
commissioner. Any action upon a rejected claim shall be brought
within three months after the date of mailing or personal service of
the notice of rejection.
  SEC. 205.  Section 320.11 of the Financial Code is amended and
renumbered to read:
    320.11.   681.   At any time and from
time to time after the expiration of the time fixed for the
presentation of claims, the commissioner, after obtaining approval of
the court, may declare and pay one or more dividends upon all
approved claims out of the funds remaining in his or her hands after
the payment of expenses and after setting aside an amount sufficient
to pay to all customers, who have not yet filed claims but whose
claims appear upon the books or records of the licensee, their pro
rata share of the funds then available for the payment of a dividend.
At any time after the expiration of one year from the date of the
first publication of notice to creditors and after obtaining the
approval of the court, the commissioner may declare and pay a final
dividend.
  SEC. 206.  Section 320.12 of the Financial Code is amended and
renumbered to read:
    320.12.   682.   (a) Expenses and
claims of unsecured creditors have priority in the following order:
   (1) Expenses of liquidation and approved claims for fees and
assessments due the department.
   (2) Approved claims given priority under other provisions of state
or federal law, including, but not limited to, Sections 
320.6   676  and  330   710
 .
   (3) Approved claims for "deposits," as that term is defined in 12
U.S.C. Section 1813(l), but including obligations of the type
described in 12 U.S.C. Section 1813(l)(5)(A) and (B).
   (4) Approved claims for other general liabilities.
   (5) Approved claims for obligations subordinated to deposits and
other general liabilities.
   (b) Interest shall be given the same priority as the claim on
which it is based, but no interest shall be paid on any claim until
the principal of all claims within the same class has been paid or
adequately provided for in full.
   (c) Any funds remaining shall be paid to the members or
shareholders, as appropriate.
  SEC. 207.  Section 320.13 of the Financial Code is amended and
renumbered to read:
    320.13.   683.   Objections to any
claim not rejected by the commissioner may be made by any person
interested by filing a copy of the objection with the commissioner,
who shall present the copy to the court at the time of the next
application for approval of the declaration of a dividend. The court
shall thereupon dispose of the objections or may order a reference
for that purpose, and should the objections to any claim be sustained
by the court or by the referee, the claim shall not be allowed by
the commissioner until the claimant has established the claim by
judgment.
  SEC. 208.  Section 320.14 of the Financial Code is amended and
renumbered to read:
    320.14.   684.   Dividends remaining
unpaid and any sums available for payment of shares or deposits for
which no claim was filed, which remain in the hands of the
commissioner six months after the order for the payment of a final
dividend, shall be deposited in the State Treasury. The shares or
deposits shall be deemed to have been received under Chapter 7
(commencing with Section 1500) of Title 10 of Part 3 of the Code of
Civil Procedure, and shall be subject to claim or other disposition
as provided in that chapter. The commissioner may pay over the moneys
held by him or her to the persons respectively entitled thereto at
any time prior to depositing the shares or deposits in the State
Treasury, upon being furnished satisfactory evidence of the persons'
right to the same.
  SEC. 209.  Section 320.15 of the Financial Code is amended and
renumbered to read:
    320.15.   685.   Whenever, under the
provisions of this article, the commissioner is required to transmit
unclaimed money or other unclaimed property to any state officer for
deposit in the State Treasury, the commissioner, upon request of the
Controller, shall transmit to the Controller all signature cards and
any other identifying information available from the records of the
licensee, covering the money or other property. Upon receipt by the
Controller of the signature cards or other identifying information,
the licensee and the commissioner shall be relieved of all
responsibility therefor. The signature cards and other identifying
information may be destroyed or otherwise disposed of by the
Controller whenever, in his or her discretion, their further
retention by him or her is no longer required in the interest of the
customers or the state.
  SEC. 210.  Section 320.16 of the Financial Code is amended and
renumbered to read:
    320.16.   686.   All approved claims of
customers and other creditors shall bear interest at the rate
provided by law on judgments from the date that the commissioner
takes possession of the property and business of the licensee.
  SEC. 211.  Section 320.17 of the Financial Code is amended and
renumbered to read:
    320.17.   687.   If the licensee has in
its possession for safekeeping or storage any jewelry, plate, money,
specie, bullion, stocks, bonds, securities, valuable papers, or
other valuable personal property, or has rented any vaults, safes, or
safe-deposit boxes, the commissioner shall cause to be mailed, by
registered mail, postage prepaid, to any known person claiming to be
or appearing on the books of the licensee to be the owner of the
property or to the person in whose name the safe, vault, or box
stands a notice notifying the person to remove all of the personal
property within a specified fixed period of not less than 60 days.
  SEC. 212.  Section 320.18 of the Financial Code is amended and
renumbered to read:
    320.18.   688.   On the last day fixed
in the notice for the removal of the property or on the date when the
property is removed or the box surrendered, any contract between the
person owning the property or holding the box and the licensee shall
cease and the amount of the unearned prepaid rent or charges, if
any, shall become a debt of the licensee to the person.
  SEC. 213.  Section 320.19 of the Financial Code is amended and
renumbered to read:
    320.19.   689.   If any property is not
removed within the time fixed by the notice mailed by the
commissioner, the commissioner may dispose of the property as the
court, on application thereto, shall direct. The commissioner may
cause any safe, vault, or box to be opened in his or her presence or
in the presence of one of the special deputy commissioners and of a
notary not an officer or employee of the licensee or of the
commissioner. The contents thereof, if any, shall be sealed by the
notary in a package upon which the notary shall distinctly mark the
name and address of the person in whose name the safe or box stands
upon the books of the licensee and shall attach thereon a list and a
description of the property within the package. The package so sealed
and addressed, together with the list and description may be kept by
the commissioner in one or more of the safes or boxes of the
licensee or elsewhere until delivered to the person whose name it
bears or until otherwise disposed of as directed by the court.
  SEC. 214.  Section 320.20 of the Financial Code is amended and
renumbered to read:
    320.20.   690.   (a) When the
commissioner has completed the liquidation of the licensee, he or she
shall petition the court for an order declaring the licensee duly
wound up and dissolved.
   (b) After any notice as the court may direct and a hearing, the
court may make an order declaring the licensee duly wound up and
dissolved. The order shall declare all of the following:
   (1) The licensee has been duly wound up.
   (2) A final franchise tax return, if any, as described by Section
23332 of the Revenue and Taxation Code, has been filed with the
Franchise Tax Board as required under Part 10.2 (commencing with
Section 18401) of Division 2 of the Revenue and Taxation Code, and
any tax or penalty due under the Corporation Tax Law has been paid,
and the licensee's known debts and liabilities have been paid or
adequately provided for, or any taxes, penalties, debts, and
liabilities have been paid so far as the licensee's assets permitted,
as the case may be. If there are known debts or liabilities for the
payment of which adequate provision has been made, the order shall
describe the provision, setting forth any information necessary to
enable the creditor or other person to whom payment is to be made to
appear and claim payment of the debt or liability.
   (3) All known assets of the licensee have been distributed to its
shareholders or wholly applied on account of the licensee's debts and
liabilities.
   (4) The licensee is dissolved.
   (c) The court may make additional orders and grant further relief
as it deems proper upon the evidence submitted.
   (d) Upon the making of the order declaring the licensee dissolved,
the corporate existence of the licensee shall cease, except for the
purposes of any necessary further winding up.
   (e) Upon the making of the order declaring the licensee dissolved,
the commissioner shall file with the Secretary of State a copy of
the order, certified by the clerk of the court.
  SEC. 215.  Section 320.21 of the Financial Code is amended and
renumbered to read:
    320.21.   691.   Whenever this article
requires court approval of any step in the liquidation proceedings,
approval shall be given after a hearing upon notice as the court may
direct. At the hearing, the court may by order approve the actions of
the commissioner for which he or she has petitioned the court's
approval or it may, by appropriate order, otherwise direct the
commissioner in the matter in connection with which the petition was
filed.
  SEC. 216.  Section 320.22 of the Financial Code is amended and
renumbered to read:
    320.22.   692.   Whenever, in the
opinion of the commissioner, the liquidation or reorganization of any
licensee taken in charge by him or her would be facilitated, or the
public interests and the interests of customers or stockholders would
be served, the commissioner may borrow money on behalf of the
licensee from any federal agency authorized to lend money to
receivers, trustees, liquidating agents, or other agents or
supervisory authorities in charge of licensees that are closed or in
process of liquidation and, with approval of the court, the
commissioner may secure any borrowings by the pledge of the assets of
the licensee in any manner and amount the commissioner deems
necessary, proper, or expedient.
  SEC. 217.  Section 325 of the Financial Code is amended and
renumbered to read:
    325.   700.   Whenever any licensee is
being liquidated or whenever the trust business of any licensee has
been discontinued and the licensee has in its possession money or
other property held by it in trust or for safekeeping and the
beneficiaries or persons entitled thereto are unknown or cannot be
found, the commissioner or the licensee, upon obtaining approval of
the superior court of the county in which the liquidation proceedings
are pending or in which the head office of the licensee is situated,
may do the following:
   (a) In the case of money, deliver it to the Treasurer.
   (b) In the case of other property, deliver it to the Controller
for deposit in the State Treasury.
  SEC. 218.  Section 325.1 of the Financial Code is amended and
renumbered to read:
    325.1.   701.   Upon the delivery of
any money to the Treasurer or upon the delivery of any property to
the Controller, a certified copy of the order of the court approving
the delivery shall be given to the Controller, and upon the delivery
of any money to the Treasurer a notice giving the amount delivered
shall be filed with the Controller. Upon the receipt of any money or
other properties, the Treasurer or the Controller, as the case may
be, shall issue a receipt for the same and the receipt shall be
deemed a voucher in favor of the licensee to the same extent as
though executed by the beneficiary or other person entitled thereto.
  SEC. 219.  Section 325.2 of the Financial Code is amended and
renumbered to read:
    325.2.   702.   All money or other
property delivered to the Treasurer or Controller pursuant to this
article shall be deemed to be delivered for deposit in the State
Treasury under the provisions of Chapter 7 (commencing with Section
1500) of Title 10 of Part 3 of the Code of Civil Procedure and shall
be subject to claim or other disposition as provided in that chapter.

  SEC. 220.  Section 330 of the Financial Code is amended and
renumbered to read:
    330.   710.   The holder or transferor
of a negotiable instrument transferred to a licensee for collection
has a preferred claim in the amount of the liability of the licensee
on the instrument if the instrument was forwarded to the licensee by
any person or by any other financial institution for collection and
remittance, if payment therefor has not been made and if the same has
been collected either in whole or in part by the licensee, unless
the holder or transferor is a voluntary depositor in the licensee and
the proceeds of the collection, at his or her request, have been
credited by the licensee to his or her account.
  SEC. 221.  The heading of Article 9 (commencing with Section 335)
of Chapter 2 of Division 1 of the Financial Code is repealed.


      Article 9.  Voluntary Liquidation


  SEC. 222.  Section 335 of the Financial Code is amended and
renumbered to read:
    335.   720.   Any licensee that
voluntarily has ceased to do the business for which it is licensed
shall immediately notify the commissioner and proceed to liquidate
its affairs. Any share or deposit or other sum that has not been paid
to the person entitled thereto within six months after the licensee
ceased to conduct a business shall be paid into the State Treasury.
The deposits with the State Treasury shall be deemed to have been
received under the provisions of Chapter 7 (commencing with Section
1500) of Title 10 of Part 3 of the Code of Civil Procedure and shall
be subject to claim or other disposition as provided in that chapter.
If the commissioner has reason to conclude that the liquidation of
the licensee is not being safely or expeditiously conducted, he or
she may take possession of the business and property of the licensee
in the same manner and with the same effect and subject to the same
rights accorded the licensee as if he or she had taken possession
pursuant to Article  8 (commencing with Section 305)
  1 (commencing with Section 600) of Chapter 8  ,
and he or she may proceed to liquidate the licensee's affairs in the
same manner as provided in that article. When the licensee has been
completely liquidated, its corporate existence shall be dissolved in
the manner provided by law.
  SEC. 223.  Section 335.1 of the Financial Code is amended and
renumbered to read:
    335.1.   721.   If the licensee
referred to in Section 335 is a state-chartered credit union and the
commissioner has taken possession of the business and property of the
credit union, the commissioner may appoint a liquidating agent or a
liquidating committee of three members of the credit union to
liquidate the business and assets of the credit union in the manner
provided in Article 2 (commencing with Section 15250) of Chapter 9 of
Division 5, except that, in lieu of the certificate required under
Section 15252, the commissioner shall prepare and file in the office
of the Secretary of State a certificate of commencement of
liquidation proceedings upon taking possession of the business and
assets, and the commissioner or his or her authorized deputy shall
countersign the certificate referred to in Sections 15257 and 15258
whenever liquidation is involuntary. The commissioner may, however,
prepare and file a final certificate whenever he or she retains
possession of the assets of any credit union for the purpose of
liquidation. The liquidating agent need not be a member of the credit
union to be liquidated and may be a person, firm, or corporation, as
determined by the commissioner.
  SEC. 224.  The heading of Chapter 3 (commencing with Section 350)
of Division 1 of the Financial Code is repealed. 
      CHAPTER 3.  ORGANIZATION OF BANKS


  SEC. 225.  The heading of Article 1 (commencing with Section 350)
of Chapter 3 of Division 1 of the Financial Code is repealed.


      Article 1.  General


  SEC. 226.  The heading of Article 3 (commencing with Section 350)
is added to Chapter 3 of Division 1 of the Financial Code, to read:

      Article 3.  Deputies and Employees


  SEC. 227.  Section 350 of the Financial Code is amended and
renumbered to read:
    350.   1001.   When authorized by the
commissioner as provided in this chapter a corporation may be formed
by one or more persons in accordance with the laws of this state for
the purpose of conducting a commercial banking business or a trust
business, or both of them. The qualification requirements of the
Corporate Securities Law of 1968 shall not apply to the offer and
sale of securities issued by and representing an interest in or a
direct obligation of a bank or trust company incorporated under the
laws of this state if the securities are offered and sold pursuant to
the commissioner's authorization described in Section  691
  1201  or the securities are exempt from
authorization pursuant to Section  691.1   1202
 , or by a regulation or order of the commissioner.
  SEC. 228.  Section 351 of the Financial Code is amended and
renumbered to read:
    351.   1002.   No bank shall be a close
corporation (as defined in Section 158 of the Corporations Code).
  SEC. 229.  Section 352 of the Financial Code is amended and
renumbered to read:
    352.   1003.   Except where explicitly
stated or the context provides otherwise, this division is applicable
to the following:
   (a) All corporations engaging in commercial banking, industrial
banking, or the trust business.
   (b) All national banking associations authorized to transact
business in this state to the extent that the provisions of this
division are not inconsistent with and do not infringe paramount
federal laws governing national banking associations.
   (c) All other corporations that subject themselves to the special
provisions and sections of this division.
   (d) All other persons, associations, copartnerships, or
corporations who, by violating any of its provisions, become subject
to the penalties provided for in this division.
  SEC. 230.  Section 353 of the Financial Code is amended and
renumbered to read:
    353.  1004.   (a) A California state
bank is a corporation incorporated under Division 1 (commencing with
Section 100) of Title 1 of the Corporations Code that is, with the
approval of the commissioner, incorporated for the purpose of
engaging in, or that is authorized by the commissioner to engage in,
the commercial or industrial banking business.
   (b) All provisions of law applicable to corporations generally,
including, but not limited to, the General Corporation Law (Division
1 (commencing with Section 100), Title 1 of the Corporations Code)
shall apply to banks. However, whenever any provision of this
division or any regulation or order issued under any provision (other
than this section) of this division applicable to banks is
inconsistent with any provision of law applicable to corporations
generally, that provision of this division or that regulation or
order shall apply and the provision of law applicable to corporations
generally shall not apply.
  SEC. 231.  Section 354 of the Financial Code is amended and
renumbered to read:
    354.   1005.   It shall be unlawful for
any person, corporation, limited liability company, partnership,
firm, or any other form of business entity allowed by law, to engage
in or transact commercial banking business, industrial banking
business, or trust business within this state except by means of a
corporation duly organized for that purpose.
  SEC. 232.  Section 355 of the Financial Code is amended and
renumbered to read:
    355.   1006.   No corporation shall
hereafter be organized under the laws of this state to transact the
business of a commercial bank, industrial bank, or trust company,
except as provided in this chapter.
  SEC. 233.  Section 356 of the Financial Code is amended and
renumbered to read:
    356.   1007.   Neither the enactment of
this code nor the amendment or repeal thereof, nor the repeal of any
statute affected thereby, shall take away or impair any liability or
cause of action existing or incurred against any bank or trust
company, or the shareholders, directors, or officers thereof.
  SEC. 234.  Section 357 of the Financial Code is amended and
renumbered to read:
    357.   1008.   The amount of funds of a
bank or trust company that are deposited in any other financial
institution (other than a Federal Reserve Bank) shall not at any time
exceed 10 percent of the sum of shareholders' equity, allowance for
loan and lease losses, capital notes, and debentures of the
depositing bank or trust company unless the financial institution has
been designated as a depositary for the funds of the depositing bank
or trust company by a vote of the majority of the directors of the
depositing bank or trust company, and unless the financial
institution has been approved by the commissioner as a depositary for
the purposes of this section. The commissioner may, in his or her
discretion, revoke his or her approval of any such depositary and
may, in his or her discretion, limit the amount of funds that may be
deposited by any bank or trust company with any other financial
institution. A deposit by one bank or trust company with another
financial institution shall not be regarded as a loan.
  SEC. 235.  The heading of Article 2 (commencing with Section 360)
of Chapter 3 of Division 1 of the Financial Code is repealed.


      Article 2.  Application


  SEC. 236.  Section 360 of the Financial Code is amended and
renumbered to read:
    360.   1020.   The request for
authority to organize and establish a corporation to engage in the
banking or trust business shall be set forth in an application in
such form and containing such information as the commissioner may
require and shall be accompanied by a fee of five thousand dollars
($5,000).
  SEC. 237.  Section 360.5 of the Financial Code is amended and
renumbered to read:
    360.5.   1021.   Upon receiving a
request for an application, the commissioner shall inform the
prospective applicant in writing that the commissioner is available
to confer with such prospective applicant in advance of the filing of
an application for the purpose of discussing questions relating to
such application. However, no application shall be decided in advance
of filing.
  SEC. 238.  Section 361 of the Financial Code is amended and
renumbered to read:
    361.   1022.   Upon the filing of an
application the commissioner shall make or cause to be made a careful
investigation and examination relative to the following:
   (a) The character, reputation, and financial standing of the
organizers or incorporators and their motives in seeking to organize
the proposed bank or trust company.
   (b) The need for banking or trust facilities or additional banking
or trust facilities, as the case may be, giving particular
consideration to the adequacy of existing banking or trust facilities
and the need for further banking or trust facilities.
   (c) The character, financial responsibility, banking or trust
experience, and business qualifications of the proposed officers of
the bank or trust company.
   (d) The character, financial responsibility, business experience,
and standing of the proposed stockholders and directors.
   (e) Other facts and circumstances bearing on the proposed bank or
trust company and its relation to the locality as in the opinion of
the commissioner may be relevant.
  SEC. 239.  Section 362 of the Financial Code is amended and
renumbered to read:
    362.   1023.   The commissioner may
give or withhold his or her approval of the application in his or her
discretion, but he or she shall not approve the application until he
or she has ascertained to his or her satisfaction:
   (a) That the public convenience and advantage will be promoted by
the establishment of the proposed bank or trust company.
   (b) That the proposed bank or trust company will have a reasonable
promise of successful operation.
   (c) That the bank is being formed for no other purpose than the
legitimate objects contemplated by this division.
   (d) That the proposed capital structure is adequate.
   (e) That the proposed officers and directors have sufficient
banking or trust experience, ability, and standing to afford
reasonable promise of successful operation.
   (f) That the name of the proposed bank or trust company does not
resemble, so closely as to be likely to cause confusion, the name of
any other bank or trust company transacting business in this state or
which had previously transacted business in this state.
   (g) That the applicant has complied with all of the applicable
provisions of this division.
  SEC. 240.  Section 363 of the Financial Code is amended and
renumbered to read:
    363.   1024.   At least 30 days before
denying an application, the commissioner shall by mail or other
method of service give written notice of the intended denial of an
application and of the right of the applicant to meet with the
commissioner regarding the reasons for such denial. The request for
such meeting shall be in writing and delivered to the commissioner
within 20 calendar days of the date of giving of the notice of
intended denial. If a request is made for such meeting, the
application may not be denied until after the meeting.
  SEC. 241.  Section 364 of the Financial Code is amended and
renumbered to read:
    364.   1025.   The commissioner may, in
approving an application to organize and establish a corporation to
engage in the banking or trust business pursuant to Section 362,
impose any conditions the commissioner deems reasonable or necessary
or advisable in the public interest.
  SEC. 242.  Section 365 of the Financial Code is amended and
renumbered to read:
    365.   1026.   (a) With the approval of
the commissioner, a bank may be formed to facilitate a merger or an
acquisition of control. The new bank may survive the merger or
acquisition of control.
   (b) Sections  360, 360.5, 361, 362, and 363  
1020, 1021, 1022, 1023, and 1024  shall not apply to the
formation of a bank pursuant to subdivision (a).
                (c) Article 4 (commencing with Section  250)
  370) of Chapter 3  shall apply to a bank formed
pursuant to subdivision (a).
   (d) A request for approval to form a bank in accordance with
subdivision (a) shall be accompanied by a fee of two thousand five
hundred dollars ($2,500).
  SEC. 243.  The heading of Article 4 (commencing with Section 370)
is added to Chapter 3 of Division 1 of the Financial Code, to read:

      Article 4.  Administration of the Department


  SEC. 244.  The heading of Article 4 (commencing with Section 399)
of Chapter 3 of Division 1 of the Financial Code is repealed.


      Article 4.  Authorization to Engage in Banking


  SEC. 245.  Section 399 of the Financial Code is amended and
renumbered to read:
    399.   1040.   In this  article
 chapter  :
   (a) "Preopening expenditure" means any obligation incurred, or sum
disbursed, by a bank prior to the time when it commences to transact
banking business, for the purpose of organizing such bank.
   (b) "Preopening noncapital expenditure" means any preopening
expenditure other than such preopening expenditures as may be
capitalized.
  SEC. 246.  The heading of Article 5 (commencing with Section 400)
is added to Chapter 3 of Division 1 of the Financial Code, to read:

      Article 5.  Financial Institutions Fund


  SEC. 247.  Section 400 of the Financial Code is amended and
renumbered to read:
    400.   1041.   The articles of
incorporation of the proposed bank or trust company shall be
submitted to the commissioner for his or her approval before they are
filed with the Secretary of State pursuant to the Corporations Code.
After the articles have been filed with the Secretary of State the
proposed bank or trust company shall:
   (a) File with the commissioner a copy of its articles of
incorporation, certified by the Secretary of State.
   (b) File with the commissioner a statement in the form and with
any supporting data as the commissioner may require showing that the
entire contributed capital has been fully paid in lawful money,
unconditionally, and that the funds representing the contributed
capital, less sums spent as authorized by this article for preopening
expenditures are on deposit in a state or national bank in this
state, subject to withdrawal on demand.
   (c) Pay to the commissioner a fee of two thousand five hundred
dollars ($2,500).
  SEC. 248.  Section 401 of the Financial Code is amended and
renumbered to read:
    401.   1042.   If the commissioner
finds that the proposed bank or trust company has in good faith
complied with all the requirements of law and fulfilled all the
conditions precedent to commencing business imposed by this code or
by regulation, the commissioner shall, within 30 days after the
statement and supporting data specified in Section  400
  1041  have been filed with him or her, issue in
duplicate a certificate of authorization to transact business as a
bank or trust company, as the case may be, and shall transmit one
copy to the bank or trust company and place one copy on file in the
department. The certificate of authorization shall state that the
corporation named therein has complied with all the provisions of
this code governing organization of banks or trust companies and that
it is authorized to transact the business specified therein.
  SEC. 249.  Section 402 of the Financial Code is amended and
renumbered to read:
    402.   1043.   It shall be unlawful to
accept payment of subscriptions for shares of any corporation
proposing to engage in the banking or trust business unless authority
to organize such corporation has been granted by the commissioner.
  SEC. 250.  Section 403 of the Financial Code is amended and
renumbered to read:
    403.   1044.   No corporation organized
to transact a commercial banking or trust business shall transact
any business until the commissioner has issued his or her certificate
authorizing it to transact such business. No bank or trust company
shall incur any indebtedness except that which is incidental to its
organization until the amount of its contributed capital has been
fully paid in lawful money to the cashier or chief financial officer
thereof.
  SEC. 251.  Section 404 of the Financial Code is amended and
renumbered to read:
    404.   1045.   If the proposed bank or
trust company fails to file evidence of incorporation and
organization with the commissioner pursuant to Section  400
  1041  within one year after the approval of the
application for authority to organize the bank or trust company, the
right to organize the bank or trust company automatically terminates.
The commissioner, however, for good cause on written application
filed before the expiration of the original period or any additional
period, as the case may be, and payment of a fee of one hundred
dollars ($100), may extend for additional periods not in excess of
six months each the time within which the bank or trust company may
be organized.
  SEC. 252.  The heading of Article 6 (commencing with Section 405)
is added to Chapter 3 of Division 1 of the Financial Code, to read:

      Article 6.  State Banking Account


  SEC. 253.  Section 405 of the Financial Code is amended and
renumbered to read:
    405.   1046.   If the proposed bank or
trust company fails to open for business within 90 days after the
issuance of the certificate of authorization, the right to transact
business automatically terminates. The commissioner, however, for
good cause on written application filed before the end of said 90-day
period, may extend for one additional period of not to exceed 90
days the time within which the bank or trust company may open for
business.
  SEC. 254.  Section 406 of the Financial Code is amended and
renumbered to read:
    406.   1047.   It is unlawful to apply
any part of the funds collected from subscribers or shareholders to
the payment of commissions or fees for obtaining subscriptions or
selling shares or, except with the prior approval of the
commissioner, to the payment of preopening noncapital expenditures.
  SEC. 255.  Section 407 of the Financial Code is amended and
renumbered to read:
    407.   1048.   Every bank and trust
company shall keep posted in a conspicuous place in its banking room
at its head office the certificate of authority to transact a banking
or trust business issued by the commissioner.
  SEC. 256.  The heading of Chapter 4 (commencing with Section 450)
is added to Division 1 of the Financial Code, to read:
      CHAPTER 4.  OPERATIONS


  SEC. 257.  The heading of Chapter 4 (commencing with Section 500)
of Division 1 of the Financial Code is repealed. 
      CHAPTER 4.  BANK OFFICES


  SEC. 258.  Section 500 of the Financial Code is amended and
renumbered to read:
    500.   1070.   For purposes of this
chapter, the following definitions apply:
   (a) "Automated teller machine" means any electronic information
processing device used by a financial institution and its customers
for the primary purpose of executing transactions solely between the
financial institution and its customers, if the transactions are not
incidental to sales between the customer and a business entity other
than a financial institution.
   (b) "Branch office" means any office at which core banking
business is conducted other than an automated teller machine, a
device used to facilitate check guarantee or check authorization, or
a remote service facility as defined in subsection (d) of Section
345.12 of Title 12 of the Code of Federal Regulations.
   (c) "Core banking business" means the business of receiving
deposits, paying checks, making loans, and other activities that the
commissioner may specify by order or regulation. "Core banking
business," when used to describe the trust business, includes
receiving fiduciary assets and administering fiduciary accounts.
   (d) "Facility," means an office in this state at which a bank
engages in noncore banking business but at which it does not engage
in core banking business.
   (e) "Head office" means the office designated by the bank as its
headquarters.
   (f) "Noncore banking business" means all activities permissible
for banks, except core banking business, and except those activities
prohibited by law or determined by the commissioner by regulation or
order not to be noncore banking business.
   (g) "Office" means the head office, any branch office, and any
facility office of a bank.
   (h) "Redesignate offices" means (1) the relocation by a bank of
its head office to the site of a branch or facility office in this
state and the concurrent establishment by the bank of an office at
the former site of the head office, or (2) the relocation by a bank
of a branch office to the site of a facility office and the
concurrent establishment by the bank of a branch or facility office
at the former site of the branch office.
  SEC. 259.  Section 501 of the Financial Code is amended and
renumbered to read:
    501.   1071.   The commissioner shall
issue a certificate in duplicate authorizing a bank to establish and
maintain an office. A bank shall pay a fee of twenty-five dollars
($25) for every certificate the commissioner issues pursuant to this
section.
  SEC. 260.  Section 502 of the Financial Code is amended and
renumbered to read:
    502.   1072.   Every bank shall
establish and maintain a head office which shall be located in this
state.
  SEC. 261.  Section 503 of the Financial Code is amended and
renumbered to read:
    503.   1073.   A bank, with the
approval of its board, may establish and maintain one or more
offices.
  SEC. 262.  Section 504 of the Financial Code is amended and
renumbered to read:
    504.   1074.   A bank, with the
approval of its board, may relocate an office.
  SEC. 263.  Section 505 of the Financial Code is amended and
renumbered to read:
    505.   1075.   A bank, with the
approval of its board, may redesignate offices.
  SEC. 264.  Section 506 of the Financial Code is amended and
renumbered to read:
    506.  1076.   Each time a bank
establishes an office, relocates an office, or redesignates an
office, the bank shall, within 10 days of the establishment,
relocation, or redesignation of the offices, file a notice with the
commissioner. The notice shall include:
   (a) The type of office or offices to be established, relocated, or
redesignated.
   (b) The complete address of the office or offices to be
established, relocated, or redesignated. If an office is being
relocated, the old address of the office and the address at which the
office will be relocated.
   (c) The date the office or offices were established, relocated, or
redesignated.
   (d) The appropriate fee for the certificate or certificates to be
issued by the commissioner.
  SEC. 265.  Section 507 of the Financial Code is amended and
renumbered to read:
    507.   1077.   On or before January 1
of each year, every bank shall file with the commissioner a list of
all offices that are currently maintained and operated by the bank.
The report shall designate the type of each office that is being
maintained and operated, and the complete address of each office.
  SEC. 266.  Section 508 of the Financial Code is amended and
renumbered to read:
    508.   1078.   (a) A bank may close or
discontinue the operation of any branch office if, before the closing
or discontinuance, (1) the bank files with the commissioner a notice
containing the information in subdivision (b), and (2) the
commissioner within 60 days after the filing of the notice or any
longer period to which the bank consents, filing of the notice or any
longer period to which the bank consents, either (A) issues a
written statement not objecting to the notice, or (B) does not issue
a written objection to the notice.
   (b) (1) A notice filed under subdivision (a) shall contain all of
the following information:
   (A) The name of the California state bank.
   (B) The location of the branch office proposed to be closed or
discontinued.
   (C) The location of the office to which the business of the branch
office proposed to be closed or discontinued is proposed to be
transferred.
   (D) The proposed date of closing or discontinuance.
   (E) A detailed statement of the reasons for the decision to close
the branch office.
   (F) Statistical or other information in support of the reasons
consistent with the institution's written policy for branch office
closings.
   (G) Any other information that the commissioner may require.
   (2) A notice filed under subdivision (a) shall be in the form,
shall be signed in the manner, and shall, if the commissioner
requires, be verified in the manner that the commissioner may
require.
   (c) For purposes of subdivision (a), a notice is deemed to be
filed with the commissioner at the time when the complete notice,
including any amendments or supplements, containing all the
information required by the commissioner, and otherwise complying
with subdivision (b), is received by the commissioner.
   (d) In determining whether or not to object to a notice filed
under subdivision (a), except if the commissioner finds that it is
necessary in the interests of safety and soundness that the branch
office be closed or discontinued, the commissioner shall consider
whether the closing or discontinuance of the branch office will have
a seriously adverse effect on the public convenience or advantage.
  SEC. 267.  Section 509 of the Financial Code is amended and
renumbered to read:
    509.   1079.   If the commissioner
finds for any reason that the establishment, relocation, or
redesignation of office would be unsafe or unsound for a bank, the
commissioner may order the bank not to establish, relocate, or
redesignate offices without the prior approval of the commissioner.
The order may contain any other restrictions and conditions as the
commissioner deems necessary.
  SEC. 268.  Section 510 of the Financial Code is amended and
renumbered to read:
    510.   1080.   If a bank violates any
provision of this chapter or fails to comply with any order, the
commissioner may levy a penalty against the bank pursuant to Section
216.3.
  SEC. 269.  Section 511 of the Financial Code is amended and
renumbered to read:
    511.  1081.   A bank, with the approval
of its board, may discontinue a facility office. Within 10 days of
the date of the closure of the facility office, the bank shall file a
notice of that discontinuance with the commissioner. The notice
shall contain the information required by Section 506. There shall be
no fee associated with the discontinuance of a facility office.
  SEC. 270.  The heading of Chapter 4.5 (commencing with Section 550)
of Division 1 of the Financial Code is repealed. 
      CHAPTER 4.5.  AUTHORIZATIONS FOR BANKS


  SEC. 271.  The heading of Chapter 5 (commencing with Section 550)
is added to Division 1 of the Financial Code, to read:
      CHAPTER 5.  ENFORCEMENT


  SEC. 272.  Section 550 of the Financial Code is amended and
renumbered to read:
    550.   1300.  (a) Notwithstanding the
provisions of Sections 1051, 1052, and 1054 of the Labor Code and
Section 2947 of the Penal Code, a bank or any affiliate thereof,
licensed under the laws of any state or of the United States, or any
officer or employee thereof, may deliver fingerprints taken of a
director, an officer, an employee, or an applicant for employment to
local, state, or federal law enforcement agencies for the purpose of
obtaining information as to the existence and nature of a criminal
record, if any, of the person fingerprinted relating to convictions,
and to any arrest for which that person is released on bail or on his
or her own recognizance pending trial, for the commission or
attempted commission of a crime involving robbery, burglary, theft,
embezzlement, fraud, forgery, bookmaking, receiving stolen property,
counterfeiting, or involving checks or credit cards or using
computers.
   (b) The Department of Justice shall, pursuant to Section 11105 of
the Penal Code, and a local agency may, pursuant to Section 13300 of
the Penal Code, furnish to the officer of the bank or affiliate
responsible for the final decision regarding employment of the person
fingerprinted, or to his or her designees having responsibilities
for personnel or security decisions in the usual scope and course of
their employment with the bank or affiliate, summary criminal history
information when requested pursuant to this section. If, upon
evaluation of the criminal history information received pursuant to
this section, the bank or affiliate determines that employment of the
person fingerprinted would constitute an unreasonable risk to that
bank or affiliate or its customers, the person may be denied
employment.
   (c) Banks and their affiliates shall submit to the Department of
Justice fingerprint images and related information required by the
Department of Justice of all directors, officers, employees, or an
applicant for employment for the purpose of obtaining information
regarding the existence and content of a record of state and federal
convictions and also information regarding the existence and content
of a record of state and federal arrests for which the Department of
Justice establishes that the person is free on bail, or on his or her
own recognizance, pending trial or appeal.
   (d) When the Department of Justice receives a request under this
section for federal summary criminal history information, it shall
forward the request to the Federal Bureau of Investigation. Once the
information is received from the Federal Bureau of Investigation, the
Department of Justice shall review, compile, and disseminate the
information to the federally chartered bank or affiliate pursuant to
paragraph (1) of subdivision (o) of Section 11105 of the Penal Code.
   (e) When the Department of Justice receives a request for federal
summary criminal history information from a nonchartered bank, it
shall forward the request to the Federal Bureau of Investigation.
Once the information is received from the Federal Bureau of
Investigation, the Department of Justice shall review and provide a
fitness determination on an applicant for employment based on
criminal convictions or on arrests for which the person is released
on bail or on his or her own recognizance pending trial for the
commission or attempted commission of crimes specified in subdivision
(a).
   (f) A bank or affiliate may request from the Department of Justice
subsequent arrest notification service, as provided pursuant to
Section 11105.2 of the Penal Code, for persons described in
subdivision (a).
   (g) The Department of Justice shall charge a fee sufficient to
cover the cost of processing the requests described in this section.
   (h) Any criminal history information obtained pursuant to this
section is confidential and no recipient shall disclose its contents
other than for the purpose for which it was acquired.
   (i) "Affiliate," as used in this section, means any corporation
controlling, controlled by, or under common control with, a bank,
whether directly, indirectly, or through one or more intermediaries.
  SEC. 273.  Section 551 of the Financial Code is amended and
renumbered to read:
    551.   1301.   (a) Notwithstanding
Section 726 of the Code of Civil Procedure or any other provision of
law to the contrary, a state or nationally chartered bank, its
subsidiaries or affiliates transacting business in this state, or any
successor in interest thereto, that originates, acquires, or
purchases, in whole or in part, any loan secured directly or
collaterally, in whole or in part, by a mortgage or deed of trust on
real property, or any interest therein, may bring an action for
recovery of damages, including exemplary damages not to exceed 50
percent of the actual damages, against a borrower where the action is
based on fraud under Section 1572 of the Civil Code and the
fraudulent conduct by the borrower induced the original lender to
make that loan.
   (b) The provisions of this section shall not apply to loans
secured by single-family, owner-occupied residential real property,
when the property is actually occupied by the borrower as represented
to the lender in order to obtain the loan and the loan is for an
amount of one hundred fifty thousand dollars ($150,000) or less, as
adjusted annually, commencing on January 1, 1987, to the Consumer
Price Index as published by the United States Department of Labor.
   (c) Any action maintained under this section for damages shall not
constitute a money judgment for deficiency or a deficiency judgment
within the meaning of Section 580a, 580b, or 580d of the Code of
Civil Procedure.
  SEC. 274.  The heading of Chapter 5 (commencing with Section 600)
of Division 1 of the Financial Code is repealed. 
      CHAPTER 5.  CORPORATE REQUIREMENTS


  SEC. 275.  The heading of Article 1 (commencing with Section 600)
of Chapter 5 of Division 1 of the Financial Code is repealed.


      Article 1.  Articles, Bylaws, and Name


  SEC. 276.  The heading of Chapter 6 (commencing with Section 600)
is added to Division 1 of the Financial Code, to read:
      CHAPTER 6.  LIQUIDATION AND CONSERVATION


  SEC. 277.  The heading of Article 1 (commencing with Section 600)
is added to Chapter 6 of Division 1 of the Financial Code, to read:

      Article 1.  General Provisions


  SEC. 278.  Section 600 of the Financial Code is amended and
renumbered to read:
    600.   1100.   The articles of each
bank shall contain the applicable one of the following statements:
   (a) In case the bank is, or is proposed to be, a commercial bank
not authorized to engage in trust business, that the purpose of the
corporation is to engage in commercial banking business and any other
lawful activities which are not, by applicable laws or regulations,
prohibited to a commercial bank.
   (b) In case the bank is, or is proposed to be, a commercial bank
authorized to engage in trust business, that the purpose of the
corporation is to engage in commercial banking business and trust
business and any other lawful activities which are not, by applicable
laws or regulations, prohibited to a commercial bank authorized to
engage in trust business.
   (c) In case the bank is, or is proposed to be, an industrial bank
not authorized to engage in trust business, that the purpose of the
corporation is to engage in industrial banking business and any other
lawful activities which are not, by applicable laws or regulations,
prohibited to an industrial bank.
   (d) In case the bank is, or is proposed to be, an industrial bank
authorized to engage in trust business, that the purpose of the
corporation is to engage in industrial banking business and trust
business and any other lawful activities which are not, by applicable
laws or regulations, prohibited to an industrial bank authorized to
engage in trust business.
   (e) In case the bank is, or is proposed to be, a trust company
(other than a commercial bank authorized to engage in trust
business), that the purpose of the corporation is to engage in trust
business and any other lawful activities which are not, by applicable
laws or regulations, prohibited to a trust company.
  SEC. 279.  Section 600.3 of the Financial Code is amended and
renumbered to read:
    600.3.   1101.   (a) In this section:
   (1) "Assessment provision" means the provision in the articles of
a bank that complies with the requirements of Section 600.2, as in
effect immediately before the effective date of this section, or any
predecessor statute.
   (2) "Bank" means any (A) California state bank or (B) corporation
organized under the laws of this state for the purpose of transacting
business pursuant to Article 1 (commencing with Section 3500) of
Chapter 19.
   (b) On and after the effective date of this section, the
assessment provision in the articles of a bank shall no longer be of
any force or effect.
   (c) Notwithstanding Sections 902 and 903 of the Corporations Code,
a bank may, on or after the effective date of this section, amend
its articles by deleting the assessment provision with the approval
of its board alone and without any approval of its outstanding
shares.
   (d) (1) Any order issued before the effective date of this section
by the commissioner pursuant to Section 662, as in effect
immediately before the effective date of this section or any
predecessor statute, shall, if and to the extent that the bank has
not before that date levied and collected through sale of shares or
otherwise, an assessment on its common shares, be deemed rescinded.
   (2) Any proceeding commenced before the effective date of this
section by a bank to assess its common shares in accordance with an
order issued by the commissioner pursuant to Section 662, as in
effect immediately before the effective date of this section or any
predecessor statute, shall be terminated on the effective date of
this section. On and after the effective date of this section, the
bank shall take no further action to levy or collect the assessment
on its common shares, and any lien on the common shares created by
the assessment shall be deemed extinguished.
  SEC. 280.  Section 600.4 of the Financial Code is amended and
renumbered to read:
    600.4.   1102.   (a) No amendment of
the articles of a bank (other than an amendment set forth in an
agreement of merger or in a certificate of ownership executed
pursuant to Section 1110 of the Corporations Code that requires the
approval of the commissioner pursuant to Chapter 4 (commencing with
Section 4880) of Division 1.5) shall become effective unless the
certificate of amendment or other instrument setting forth the
amendment is filed with the Secretary of State with the commissioner'
s approval endorsed thereon. Promptly after the amendment becomes
effective, the bank shall file with the commissioner a copy of the
certificate of amendment or other instrument certified by the
Secretary of State.
   (b) Any amendment of the articles of a bank set forth in an
agreement of merger or in a certificate of ownership executed
pursuant to Section 1110 of the Corporations Code that requires the
approval of the commissioner pursuant to Chapter 4 (commencing with
Section 4880) of Division 1.5, shall become effective at the time
when the merger becomes effective pursuant to this division.
  SEC. 281.  Section 600.6 of the Financial Code is amended and
renumbered to read:
    600.6.   1103.   No restated articles
of a bank shall become effective unless the certificate setting forth
such restated articles is filed with the Secretary of State with the
commissioner's approval endorsed thereon. Promptly after the
restated articles become effective, such bank shall file with the
commissioner a copy of such certificate certified by the Secretary of
State.
                                                      SEC. 282.
Section 600.8 of the Financial Code is amended and renumbered to
read:
    600.8.   1104.   No certificate of
determination of a bank shall become effective unless such
certificate of determination is filed with the Secretary of State
with the commissioner's approval endorsed thereon. Promptly after the
certificate of determination becomes effective, such bank shall file
with the commissioner a copy of the certificate of determination
certified by the Secretary of State.
  SEC. 283.  Section 600.10 of the Financial Code is amended and
renumbered to read:
    600.10.   1105.   No certificate of
correction of a bank shall become effective unless such certificate
of correction is filed with the Secretary of State with the
commissioner's approval endorsed thereon. Promptly after the
certificate of correction becomes effective, such bank shall file
with the commissioner a copy of the certificate of correction
certified by the Secretary of State.
  SEC. 284.  Section 600.12 of the Financial Code is amended and
renumbered to read:
    600.12.   1106.   No certificate of
revocation of a bank shall become effective unless such certificate
of revocation is filed with the Secretary of State with the
commissioner's approval endorsed thereon. Promptly after the
certificate of revocation becomes effective, such bank shall file
with the commissioner a copy of the certificate of revocation
certified by the Secretary of State.
  SEC. 285.  Section 602 of the Financial Code is amended and
renumbered to read:
    602.   1107.   (a) A bank may change
its name if it files with the commissioner a report on the proposed
change not less than 30 days before the change. The report shall be
in the form, shall contain the information, shall be signed in the
manner, and shall, if the commissioner so requires, be verified in
the manner the commissioner may require.
   (b) Whenever a bank changes its name, the bank shall surrender to
the commissioner for cancellation the certificates of authority under
its old name for its head office, any branch offices, and any places
of business. The commissioner shall issue to the bank replacement
certificates under the bank's new name and the bank shall pay to the
commissioner a fee of twenty-five dollars ($25) for each replacement
certificate.
   (c) The commissioner may not deny an application for approval of
an amendment of the articles of incorporation of a bank which changes
the name of the bank or any other application of a bank relating to
a change in the name of the bank because the new name of the bank
resembles so closely, as to be likely to cause confusion, the name of
any other bank.
  SEC. 286.  The heading of Article 2 (commencing with Section 620)
of Chapter 5 of Division 1 of the Financial Code is repealed.


      Article 2.  Shares


  SEC. 287.  The heading of Article 2 (commencing with Section 620)
is added to Chapter 6 of Division 1 of the Financial Code, to read:

      Article 2.  Conservation and Liquidation of an Insured Licensee



  SEC. 288.  Section 620 of the Financial Code is amended and
renumbered to read:
    620.   1120.   A bank may, with the
approval of its board, determine and from time to time redetermine
the par value of any class or series of its shares unless its
articles provide that such shares shall have par value and specify
the par value of such shares.
  SEC. 289.  Section 621 of the Financial Code is amended and
renumbered to read:
    621.   1121.   No bank or trust company
after October 1, 1949, shall issue any shares before they are fully
paid for.
  SEC. 290.  Section 622 of the Financial Code is amended and
renumbered to read:
    622.   1122.   No bank shall issue any
shares in consideration of:
   (a) Services rendered in the organization of such bank; or
   (b) Any note (whether or not negotiable and whether or not
secured) made by the purchaser of such shares.