BILL ANALYSIS Ó
SENATE BANKING & FINANCIAL INSTITUTIONS COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
AB 2742 (Banking & Finance Committee)Hearing Date: June 4, 2014
As Introduced: February 27, 2014
Fiscal: No
Urgency: No
SUMMARY Would correct inaccurate code section references,
update outdated code section references, and clarify unclear
language in several of the laws administered by the Department
of Business Oversight (DBO) and the Bureau of Real Estate
Appraisers.
DESCRIPTION
1. Would correct inaccurate code section references, update
outdated code section references, and clarify unclear
language in several of the laws administered by DBO and the
Bureau of Real Estate Appraisers. All of the bill's
proposed changes are intended to be technical and
clarifying; none are believed to be substantive.
EXISTING LAW
2. Gives DBO jurisdiction over banks, industrial banks, trust
companies, credit unions, money transmitters, issuers of payment
instruments and traveler's checks, savings associations,
business and development corporations, premium finance
companies, and a variety of nondepository unsecured and secured
lenders, broker-dealers, and investment advisers. Laws under
DBO's jurisdiction span multiple divisions within both the
Financial Code and the Corporations Code.
3. Provides for the Real Estate Appraisers' Licensing and
Certification Law and places authority for administering this
law with the Bureau of Real Estate Appraisers (Business and
Professions Code Sections 11300 et seq.).
COMMENTS
1. Purpose: This is a technical clean-up measure intended to
AB
2742 (Comm. on B. & F.), Page 2
correct, clarify, and update several of the laws
administered by DBO and the Bureau of Real Estate
Appraisers.
2. Background and Discussion: In 2008, the former Department
of Financial Institutions (DFI) commenced a multi-year
effort to update and reorganize the laws over which it had
jurisdiction. This reorganization was intended to update
laws that had fallen far out of date; reflect numerous
changes made to federal banking law since the laws overseen
by DFI were originally drafted; and clean up various
inconsistencies, incorrect code references, and obsolete
code sections that had crept into the code over time. DFI
sponsored three pieces of chaptered legislation to
accomplish this update, including AB 1301 (Gaines), Chapter
125, Statutes of 2008, AB 2749 (Gaines), Chapter 501,
Statutes of 2008, and AB 1268 (Gaines), Chapter 532,
Statutes of 2010. SB 664 (Committee on Banking and
Financial Institutions), Chapter 243, Statutes of 2011
finalized the reorganization process, by renumbering code
sections amended by the earlier bills.
Unfortunately, SB 664 failed to update all of the code sections
that required updating. As a result, various statutes
contain erroneous references to sections of the Financial
Code that were renumbered. AB 2742 corrects these
erroneous references.
AB 2742 also replaces references to DFI with references DBO, to
reflect the July 2013 reorganization accomplished through
Government Reorganization Plan Number 2 (GRP2). Pursuant to
GRP2, DBO now has jurisdiction over all of the laws
previously administered by both DFI and the former
Department of Corporations.
AB 2742 also updates California law to reflect federal
regulatory changes enacted during the past few years.
Effective in 2011, the Dodd Frank Wall Street Reform and
Consumer Protection Act abolished the federal Office of
Thrift Supervision. In 2013, the federal Consumer Financial
Protection Bureau promulgated regulations that amended
federal Regulations X (which implements the federal Real
Estate Settlement Procedures Act) and Z (which implements
the federal Truth in Lending Act). AB 2742 contains several
changes intended to update the California codes to reflect
these federal changes.
AB
2742 (Comm. on B. & F.), Page 3
Finally, AB 2742 updates a provision of California law that
creates copious amounts of unnecessary paperwork for every
licensee regulated under the Financial Institutions Law. As
present, because of the way in which that law is drafted,
every licensee must submit to the Commissioner of Business
Oversight a copy of every document filed by that licensee
with any federal agency (including tax returns, 1099s, W-2s,
and many other documents that are not needed for DBO to
ensure the integrity and stability of California's
state-regulated financial services industry). AB 2742
amends this provision of California law to limit the filing
requirement to documents filed by a licensee with a federal
agency charged with the supervision and regulation of that
licensee or a law enforcement agency. This change is
expected to eliminate a significant amount of unnecessary
paperwork.
3. Summary of Arguments in Support: None received.
4. Summary of Arguments in Opposition: None received.
5. Amendments:
a. Although no amendments are suggested at the present
time, double-jointing amendments will be necessary before
AB 2742 moves to the Governor. At present, AB 2742 is in
conflict with AB 1396 (Committee on Banking and Finance)
and SB 1301 (DeSaulnier).
6. Prior and Related Legislation:
a. AB 1301 (Gaines), Chapter 125, Statutes of 2008:
The first in a series of bills sponsored by DFI to update
and modernize sections of the Financial Code administered
by that department.
b. AB 2749 (Gaines), Chapter 501, Statutes of 2008:
The second in that series of bills.
c. AB 1268 (Gaines), Chapter 532, Statutes of 2010:
The third in that series of bills.
d. SB 664 (Committee on Banking and Financial
Institutions), Chapter 243, Statutes of 2011: Renumbered
several sections of the Financial Code to reflect the
AB
2742 (Comm. on B. & F.), Page 4
multi-year reorganization of the Financial Code
accomplished via the three Gaines bills listed above.
LIST OF REGISTERED SUPPORT/OPPOSITION
Support
None received
Opposition
None received
Consultant: Eileen Newhall (916) 651-4102