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AB-412 Escrow agents: asset requirements. (2019-2020)

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Date Published: 09/04/2019 04:00 AM
AB412:v96#DOCUMENT

Enrolled  September 03, 2019
Passed  IN  Senate  August 26, 2019
Passed  IN  Assembly  August 30, 2019
Amended  IN  Senate  August 15, 2019
Amended  IN  Senate  May 21, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 412


Introduced by Assembly Member Quirk-Silva
(Coauthors: Assembly Members Daly and Mullin)
(Coauthor: Senator Moorlach)

February 07, 2019


An act to amend Section 17210 of the Financial Code, relating to escrow agents.


LEGISLATIVE COUNSEL'S DIGEST


AB 412, Quirk-Silva. Escrow agents: asset requirements.
Existing law, the Escrow Law, requires people engaging in business as escrow agents to be organized as corporations for that purpose, as specified, and appropriately licensed by the Commissioner of Business Oversight. Existing law requires an escrow agent licensed on or after January 1, 1986, to maintain a tangible net worth of $50,000, including liquid assets of at least $25,000 in excess of current liabilities. Existing law requires an escrow agent licensed before January 1, 1986, to maintain a tangible net worth pursuant to a prescribed schedule, the amounts of which, in 1993, matched those required for escrow agents licensed on and after that date. Existing law provides criminal penalties for willful violations of the Escrow Law.
This bill would delete the tangible net worth schedule for escrow agents licensed before January 1, 1986, as described above, and eliminate distinctions based on when an agent was licensed in this context. The bill would exclude a liability derived from an operating lease obligation from a licensee’s current liabilities for purposes of establishing tangible net worth.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17210 of the Financial Code is amended to read:

17210.
 (a) An escrow agent shall maintain at all times a tangible net worth of fifty thousand dollars ($50,000), including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(b) The commissioner may determine by rule as to which assets constitute liquid assets and may also determine in an individual case by a specific written ruling whether a particular asset is a liquid asset within the meaning of this section.
(c) For purposes of this section, a liability derived from an operating lease obligation shall be excluded from a licensee’s current liabilities.
(d) In the case of a licensed branch office, a tangible net worth in addition to that required by subdivision (a) shall be maintained at an amount equal to 50 percent of the tangible net worth required by subdivision (a), except that licensees operating or applying for more than one branch office shall maintain an additional tangible net worth of at least 25 percent of the amount required by subdivision (a) for each branch office licensed after the first branch office location.