BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 537|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
CONSENT
Bill No: SB 537
Author: Senate Banking and Financial Institutions Committee
Amended: 4/1/13
Vote: 21
SENATE BANKING & FINANCIAL INST. COMM : 8-0, 4/3/13
AYES: Berryhill, Beall, Calderon, Corbett, Correa, Hill, Hueso,
Roth
NO VOTE RECORDED: Walters
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Business and finance
SOURCE : Author
DIGEST : This bill makes technical and clarifying changes to
several sections of the Financial Code administered by the
Department of Financial Institutions (DFI) and to provisions of
the Franchise Investment Law administered by the Department of
Corporations (DOC).
ANALYSIS :
Existing law:
1.Authorizes DFI to administer provisions of the Financial Code
regulating the activities of state-chartered banks and
industrial loan companies, state-chartered credit unions,
money transmitters, trust companies, and insurance premium
CONTINUED
SB 537
Page
2
finance companies (Divisions 1 through 7 of the Financial
Code).
2.Authorizes DOC to administer the Franchise Investment Law
(Division 5 of the Corporations Code).
3.Effective July 1, 2013, reorganizes DFI and DOC as divisions
within a new Department of Business Oversight (Government
Reorganization Plan Number 2).
This bill:
1.Within the Financial Code, corrects a heading reference,
updates state law to reflect changes in minimum levels of
federal deposit insurance limits, deletes references to
obsolete code sections, corrects incorrect code section
references, restores code section references that were
inadvertently deleted, and adds clarifying language and
definitions.
2.Within the Franchise Investment Law, standardizes the length
of time in which franchisors have to deliver disclosure
documents to prospective franchisees at 14 calendar days, and
updates state law references to the document used by
franchisors to provide specified information to prospective
franchisees, by referring to this document as a "franchise
disclosure document" rather than an "offering circular."
Comments
Purpose of the bill . According to the Senate Banking and
Financial Institutions Committee analysis, this bill is intended
to enact technical clean-up to various sections of law
administered by DFI and DOC. These changes remain necessary in
spite of, and will not interfere with the upcoming
reorganization of these departments into, divisions.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 4/13/13)
International Franchise Association
SB 537
Page
3
ARGUMENTS IN SUPPORT : The International Franchise Association
(IFA) supports the provisions of this bill that modify the
Franchise Investment Law. Changing the written disclosure
period for franchisors from at least 10 business days to at
least 14 calendar days will make California consistent with
federal law.
IFA also supports replacing the obsolete term "Uniform Franchise
Offering Circular" with the more commonly used term "Franchise
Disclosure Document."
MW:nl 4/16/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****