BILL ANALYSIS
AB 1268
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1268 (Gaines and Nava)
As Amended August 17, 2009
Majority vote
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|ASSEMBLY: |76-0 |(May 28, 2009) |SENATE: |39-0 |(August 24, |
| | | | | |2009) |
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Original Committee Reference: B. & F.
SUMMARY : Updates, organizes, and rearranges the California
Banking Law, to improve the ability of the Department of
Financial Institutions (DFI) to administer the law, and to ease
understanding of, and compliance with, the law by licensees.
Specifically, this bill revises and recasts Financial Code
relating to depository institutions, more specifically relating
to definitions, the powers of the Commissioner of DFI, the
Division of Credit Unions in DFI, the Credit Union Advisory
Committee, processes for prosecuting violators, and
reorganizations of seized banks.
The Senate amendments ensure that this bill does not chapter out
provisions of AB 1059 (Silva).
EXISTING LAW provides for the regulation and licensure, by the
DFI of state-chartered savings banks, credit unions, and other
financial institutions doing business in this state. Specifies
further various penalties and procedures for the enforcement of
these laws and regulations.
AS PASSED BY THE ASSEMBLY , this bill is substantially similar to
the version passed by the Senate.
FISCAL EFFECT : Negligible state costs.
COMMENTS : According to the author, "Under current law the DFI
Commissioner is responsible for the administration and
enforcement of laws pertaining to state-chartered commercial
banks, industrial banks, trust companies, credit unions,
transmitters of money abroad, issuers of travelers' checks,
issuers of payment instruments, and business and industrial
development corporations. The DFI Commissioner's powers are
broad with respect to each type of licensee. While the DFI
AB 1268
Page 2
Commissioner's powers are broad with respect to each type of
licensee; the Financial Code is cumbersome and the explicit
language with respect to each type of license is not consistent,
which can cause confusion for licensees as well as Department
staff."
The current banking law is based essentially on a regulatory
scheme that was enacted in 1951. AB 1301 and AB 2749 are a
result of the DFI's review of the banking Law and related DFI
processes, with the goal of streamlining oversight to create a
more licensee-friendly banking Law and at the same time provide
more efficient oversight of licensees by DFI. Two years ago the
Administration approved DFI to introduce a bill that began the
process of removing obsolete provisions of the law, and to begin
the process of modernizing the regulation of banks and trust
companies.
This proposal will further streamline regulatory oversight by
consolidating similar provisions found in licensee laws (banks,
credit unions, transmitters of money abroad, payment
instruments, traveler's checks, building & industrial
development companies) into one chapter of the Financial Code
and making the provisions in the chapter applicable to all
licensees. As an example, enforcement provisions against
licensees and licensee employees are found in each DFI regulated
industry. This bill would consolidate these enforcement
provisions into a uniform law applicable to all licensees.
Previous legislation : AB 1301 (Gaines) Chapter 125, Statutes of
2008, revised provisions of the banking law and the DFI
regulatory oversight.
AB 2749 (Gaines) Chapter 501, Statutes of 2008, reorganized
sections of the Financial Code relating to the powers of the
Commissioner of DFI, and makes other technical changes intended
to ease administration of the law by DFI.
Analysis Prepared by : Kathleen O'Malley / B. & F. / (916)
319-3081
FN: 0002435