BILL ANALYSIS Ó
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CONSENT
Bill No: AB 2742
Author: Assembly Banking and Finance Committee
Amended: As introduced
Vote: 21
SENATE BANKING & FINANCIAL INST. COMM. : 8-0, 6/4/14
AYES: Evans, Block, Correa, Hill, Morrell, Roth, Torres, Vidak
NO VOTE RECORDED: Hueso
ASSEMBLY FLOOR : 77-0, 4/21/14 (Consent) - See last page for
vote
SUBJECT : Business: corporations and financial services
SOURCE : Author
DIGEST : This bill corrects inaccurate code section
references, updates outdated code section references, and
clarifies unclear language in several of the laws administered
by the Department of Business Oversight (DBO) and the Bureau of
Real Estate Appraisers (BREA).
ANALYSIS :
Existing law:
1. 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
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AB 2742
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finance companies, and a variety of nondepository unsecured
and secured lenders, broker-dealers, and investment advisers.
Provides that laws under DBO's jurisdiction span multiple
divisions within both the Financial Code and the Corporations
Code.
2. Provides for the Real Estate Appraisers' Licensing and
Certification Law and places authority for administering this
law with BREA.
This bill corrects inaccurate code section references, updates
outdated code section references, and clarifies unclear language
in several of the laws administered by DBO and BREA. Makes
technical, clarifying and nonsubstantive changes.
Background
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intended to update laws that had fallen far out of date; reflect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 (Senate Banking
and Financial Institutions Committee, 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. This bill corrects these erroneous references.
This bill also replaces references to DFI with references to
DBO, to reflect the July 2013 reorganization accomplished
through Governor's Reorganization Plan Number 2 (GRP 2).
Pursuant to GRP 2, DBO now has jurisdiction over all of the laws
previously administered by both DFI and the former Department of
Corporations.
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This bill 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). This bill contains several changes intended to
update the California codes to reflect these federal changes.
Finally, this bill updates a provision of California law that
creates copious amounts of unnecessary paperwork for every
licensee regulated under the Financial Institutions Law. At
present, because of the way in which that law is drafted, every
licensee must submit to the Commissioner of DBO 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). This bill 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
ASSEMBLY FLOOR : 77-0, 4/21/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Roger Hernández, Holden,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez,
Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas,
Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski,
Wilk, Williams, Yamada, John A. Pérez
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NO VOTE RECORDED: Harkey, Melendez, Vacancy
MW:k 6/5/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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