BILL ANALYSIS Ó
AB 2742
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Date of Hearing: April 7, 2014
ASSEMBLY COMMITTEE ON BANKING AND FINANCE
Roger Dickinson, Chair
AB 2742 (Banking & Finance) - As Introduced: February 27, 2014
SUBJECT : Business: corporations and financial services.
SUMMARY : Updates code sections within the jurisdiction of the
Assembly Banking & Finance Committee stemming for changes made
from the Federal Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010.
EXISTING STATE LAW requires every licensee of the Department of
Business Oversight (DBO) under the Financial Institutions Law to
file with the DBO commissioner one copy of all material filed by
the licensee with any applicable federal financial institution
regulatory agency, law enforcement agency, or other federal
agency. [Financial Code, Section 459]
EXISTING FEDERAL LAW enacted the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010 (Dodd-Frank Act), among
other things, created the federal Consumer Financial Protection
Bureau (CFPB). The CFPB was granted rule-making authority under
the Real Estate Settlement Procedures Act of 1974 (RESPA) and
the Truth in Lending Act (TILA) and was tasked with harmonizing
the rules under RESPA and TILA. In 2013, the CFPB reissued the
implementing regulations for RESPA (Regulation X) and TILA
(Regulation Z). This reissuance changed the references for
Regulation X and Regulation Z in the Code of Federal Regulations
(CFR). The Dodd-Frank Act abolished the Office of Thrift
Supervision (OTS), and transferred its supervisory powers and
responsibilities for federally-chartered thrift institutions to
the Office of the Comptroller of the Currency (OCC), the
national bank regulator.
FISCAL EFFECT : None.
COMMENTS :
The Assembly Banking and Finance Committee bill provides
technical corrections and conforming language for various
California code sections related to:
1)SB 664 (Committee on Banking and Financial Institutions,
AB 2742
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Chapter 243, Statutes of 2011), which reorganized and
renumbered all Financial Code sections related to banks, trust
companies and money transmitters;
2) Revised federal regulations issued by the Consumer Financial
Protection Bureau under authority of the Dodd-Frank Act; and,
3) Clarifying material that licensees are required to file with
the commissioner.
SB 664 completely renumbered sections of the Financial Code
related to banking, trust company and money transmitter
licensees of the Department of Financial Institutions (DFI). As
a result, various statutes contain inaccurate references to
sections of the Financial Code that were renumbered. Subsequent
legislation has addressed some, but not all, of these incorrect
references. AB 2742 corrects the remaining inaccurate
references.
There are a number of references to federal Regulation X and
Regulation Z in California statutes which should be corrected to
avoid confusion and enhance enforcement of California consumer
protection laws that reference RESPA, TILA and the implementing
regulations. Additionally, since the OTS was abolished,
references to the OTS in California codes should be eliminated.
SB 664 inadvertently removed the citation language for the
Banking Law from the Financial Code. This proposal would add
Sec. 1001 to Division 1.1 of the Financial Code to provide a
citation for the Banking Law.
AB 2742 also would provide updated information for consumers
regarding how to contact a HUD-approved housing counseling
agency in the "Home Ownership Counseling Notice" required by
Section 4973 of the Financial Code.
In addition, this measure would clarify existing law and reduce
the regulatory burden on licensees by limiting the materials
that must be filed with DBO.
AB 2742 would correct erroneous references to the OTS, which was
abolished by the Dodd-Frank Act; the Federal Reserve System and
HUD, whose rule-making authority under RESPA and TILA were
transferred to the CFPB by the Dodd-Frank Act; and federal
Regulations X and Z (implementing RESPA and TILA), which were
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reissued by the CFPB under different Code of Federal Regulations
citations.
Incorrect references in the codes creates confusion for state
employees who must administer the laws, for persons doing
business in California under a license issued pursuant to an
affected code, and for California consumers doing business with
licensed persons.
PREVIOUS LEGISLATION
SB 664 (Committee on Banking and Financial Institutions, Chapter
243, Statutes of 2011)
renumbered sections of the Financial Code related to banking,
trust company and money transmitter licensees of DFI.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Kathleen O'Malley / B. & F. / (916)
319-3081