BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 2364 (Wagner) - Civil procedure: attachment.
Amended: August 6, 2012 Policy Vote: BFI 6-0, JUD 4-0
Urgency: No Mandate: No
Hearing Date: August 6, 2012
Consultant: Jolie Onodera
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 2364 would require any financial institution
that has more than nine branches in the state to designate at
least one "central location" for service of legal process, and
would authorize a financial institution with fewer than 10
branches in the state to do the same. This bill would require
financial institutions that designate a central location to file
a notice, as specified, of its designation with the Department
of Financial Institutions (DFI) and would require the DFI to
post and update the information on its internet website. This
bill would also establish procedures for service of process and
execution of levies at a financial institution's designated
central location.
Fiscal Impact: Ongoing costs of approximately $75,000 (Financial
Institutions Fund) to the DFI to maintain and update the
designations filed by financial institutions.
Background: Existing law provides for procedures by which
judgment creditors may seek collection of outstanding debts or
judgments, as well as provides for specified procedures to
service legal processes on financial institutions, including
writs of attachment and execution. Under existing law,
procedures for attachment or execution of a levy to be served on
financial institutions require service to be made at the branch
or office that has actual possession of the property levied
upon, or where the deposit account is maintained. Under existing
requirements, a plaintiff or judgment creditor would be required
to identify and separately serve each branch of a bank at which
the debtor or defendant maintains accounts and/or safe deposit
boxes.
AB 2364 (Wagner)
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Under existing law, financial institutions are authorized but
not required to elect a centralized location for the service of
process of specified writs and other legal processes. Current
law, however, lacks specificity with regard to the process to
effectuate or communicate a "central location" designation and
could effectively impact accounts that extend beyond the state.
Proposed Law: This bill seeks to modernize and simplify the
procedures relating to serving attachments and executions of
levies on large financial institutions. Specifically, this bill:
Requires a financial institution with more than nine branches
or offices in this state, and authorizes financial
institutions with fewer than 10 branches in the state, to
designate at least one central location for service of writs
of attachment, execution levies, and other legal process for
enforcement of judgments within the state, and would provide
that each designated location shall be referred to as a
"central location."
Requires any financial institution that designates a central
location for service of levies and other legal process for
attachments and enforcement of judgments to file a notice of
that designation with the DFI, and authorizes financial
institutions to modify or revoke any designation, which must
also be filed with the DFI.
Requires the DFI to provide any person requesting the
information with a copy of the current filing, either by
posting all current designations on its internet website
without charge to the public, or by imposing a reasonable fee
for to furnish the information in any other manner.
Requires the DFI to update the information within 10 business
days following the filing of any modification or revocation of
a designation from a financial institution.
Provides that, except as specified, service of legal process
at a central location of a financial institution shall be
effective against all deposit accounts and all property held
for safekeeping, as specified, if those accounts/property are
described in the legal process and are held by the financial
institution at any branch or office covered by central process
and located in this state.
Staff Comments: The DFI will incur ongoing workload to maintain
and update the database of financial institutions that are
required or opt to designate a central location for service of
legal process regarding levies of accounts and contents of safe
AB 2364 (Wagner)
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deposit boxes. This bill would require every financial
institution with 10 or more branches or offices within the state
to designate a central location, and would make it an option for
financial institutions with nine or fewer branch offices within
the state. This provision would result in workload associated
with more financial institutions than DFI licenses, such as
federally chartered banks and out-of-state chartered banks and
credit unions. The mandated workload would not be absorbable and
is estimated to result in annual costs of $75,000 (Financial
Institutions Fund). The Financial Institutions Fund is funded
through annual assessment fees on licensees (state-chartered
banks, credit unions, and money transmitters). As a result, DFI
licensees would be funding the ongoing cost of maintaining the
information and website for all applicable financial
institutions within the state.