BILL ANALYSIS �
SB 979
Page 1
Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 979 (Vargas) - As Amended: July 5, 2012
Policy Committee: Banking and
Finance Vote: 11-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Commissioner of the Department of
Financial Institutions (DFI) to make its formal, final
enforcement actions public on their Internet Web site.
Specifically, this bill:
1)Authorizes the commissioner to delay publication of a final
order or decision for a reasonable time, if the commissioner
makes a determination in writing that the publication of a
final order or decision would seriously threaten the safety or
soundness of a regulated institution subject to that order or
decision.
2)Authorizes the commissioner to redact from the order, prior to
publication, information which would identify a customer of
the institution.
3)Makes other technical changes.
FISCAL EFFECT
Approximately $150,000 annually to the Financial Institutions
Fund. Although the bill only requires publication on the
department's web site, it is likely that when formal actions are
required to be publicized, more licensees will appeal the
decision rather than consenting to the order. If more appeals
result, there would be increased costs to the DFI for
administration and hearings.
COMMENTS
SB 979
Page 2
1)Need for the bill : According to the author, this bill is
intended to improve transparency of enforcement action brought
by DFI and ensure that California's policies regarding the
publication of final, formal enforcement action by our
financial regulators is consistent with federal transparency
policies in this area.
2)Background : DFI regulates California-chartered banks and
credit unions, as well as several other types of financial and
money services businesses, such as trust companies and money
transmitters. As part of its regulatory duties, DFI conducts
regular examinations of its licensees, and takes enforcement
actions as necessary to ensure that its licensees are
operating in a safe and sound manner, and in accordance with
state law. During its examination process, DFI routinely
makes recommendations to licensees regarding enhancements they
can make to their policies, procedures, internal routines and
controls, and comments on other operational matters, with the
aim of ensuring the safety and soundness of the institution
and the state's financial services system. Often, these
recommendations are informal. However, when more serious
failings are observed, DFI's actions take the form of formal
orders.
All of the federal depository institution regulators,
including the Office of the Comptroller of the Currency,
Federal Reserve Board, Federal Deposit Insurance Corporations,
and National Credit Union Administration make their final,
formal enforcement actions public.
3)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081