BILL ANALYSIS
SB 1363
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Date of Hearing: June 21, 2010
ASSEMBLY COMMITTEE ON BANKING AND FINANCE
Mike Eng, Chair
SB 1363 (Runner) - As Amended: April 26, 2010
SENATE VOTE : 33-0
SUBJECT : Escrow Agents
SUMMARY : Requires new escrow licensees and employees, within
12 months of receiving their license, to complete a course in
escrow management conducted by the Department of Corporations
(DOC).
EXISTING LAW
1)Regulates the business of escrow under the Escrow Law and
defines "escrow" as a transaction in which one person, for the
purpose of effecting the sale, transfer, encumbering, or
leasing of real or personal property to another person,
delivers any written instrument, money, evidence of title to
real or personal property to a third person to be held by that
third person until the happening of a specified event or the
performance of a prescribed condition, when it is then to be
delivered by that third person to a specified person.
[Financial Code Section 17000 et seq.]
2)Exempts a variety of entities from Escrow Law including
depository institutions; a person licensed to practice law in
California as specified; title insurance companies regulated
by the Department of Insurance; and real estate brokers
performing in the course of, or incidental to a real estate
transaction in which the broker is an agent or a party to the
transaction and is performing an act for which a real estate
license is required [Financial Code Section 17006.]
FISCAL EFFECT : According to the Senate Appropriations
committee, costs will be offset by the fee authorization in the
bill.
COMMENTS :
According to the author, the California escrow law is among the
most stringent in the nation for escrow agents. It is vitally
SB 1363
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important that new licensees fully understand the various
requirements placed on them by the state's escrow law. The
Escrow Institute strongly asserts that the long term success of
a licensed escrow agent is enhanced by early efforts undertaken
by DOC to monitor and therefore insure that the new licensee
understands the rules and regulations required for handling
escrowed trusts funds.
Prior Legislation
SB 204 (Benoit), Chapter 568, Statutes of 2009, capped the
Escrow Law annual assessment at $2,800 and removed the sunset
requirement that had periodically required this amount to be
re-visited by the Legislature every four to five years;
streamlined the procedures for Escrow Law licensees to surrender
their licenses; and made changes intended to increase the
availability of fidelity bonds and errors and omissions
insurance for exchange facilitators. A provision in SB 204 that
was nearly identical to the indoctrination/preliminary
examination provisions of this bill was amended out, due to
opposition from the DOC.
REGISTERED SUPPORT / OPPOSITION :
Support
Escrow Institute of California (Sponsor)
Opposition
None on file.
Analysis Prepared by : Mark Farouk / B. & F. / (916) 319-3081