Code Section Group

Financial Code - FIN

DIVISION 1. FINANCIAL INSTITUTIONS [99 - 819]

  ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. )

CHAPTER 6. Enforcement [550 - 595]

  ( Chapter 6 added by Stats. 2011, Ch. 243, Sec. 2. )

ARTICLE 1. General Provisions [550 - 554]
  ( Article 1 added by Stats. 2011, Ch. 243, Sec. 2. )

550.
  

In this article:

(a) “Appropriate licensee business” means the business that a licensee may conduct in accordance with the charter or license that the commissioner has issued to that licensee.

(b) “Customer” means a depositor of a bank, a member of a credit union, or a customer of any other licensee.

(c) “Holding company” shall have the meaning set forth in Section 1280.

(d) “Officer of a subject institution” means any director, officer, official, or employee of the subject institution.

(e) “Person” means a subject institution or a subject person.

(f) “Subject institution” means any of the following:

(1) Licensee.

(2) Subsidiary of a licensee.

(3) Foreign (other state) or foreign (other nation) bank or credit union that maintains an office in this state, with respect to any such office other than a national bank or federal credit union.

(4) Any other person lawfully conducting the business of a bank or credit union in this state other than a national bank or federal credit union.

(g)  “Subject person,” when used with respect to a subject institution, means any of the following:

(1) Director, officer, employee, or agent of the subject institution.

(2) Member, consultant, joint venture partner, or other person that participates in the affairs of a subject institution.

(3) Independent contractor, including any attorney, appraiser, or accountant, who knowingly or recklessly participates in any of the following acts if the act caused or is likely to cause more than a minimal financial loss to, or a significant adverse effect on, the subject institution:

(A) A violation of any applicable law, regulation, or order.

(B) A breach of fiduciary duty.

(C) An unsafe or unsound act.

(h)  “Violation” includes any act performed, alone or with other persons, for or toward causing, bringing about, participating in, counseling, aiding, or abetting a violation of any applicable statute, regulation, provision of a written order issued by the commissioner, or provision of a written agreement made between the commissioner and a subject institution or subject person.

(Added by Stats. 2011, Ch. 243, Sec. 2. Effective January 1, 2012.)

551.
  

Any subject person who is entitled to a hearing pursuant to this article may waive that right at any time. A waiver under this section shall relieve the commissioner from having to issue a formal notice of hearing that would otherwise be required by this article.

(Added by Stats. 2011, Ch. 243, Sec. 2. Effective January 1, 2012.)

552.
  

(a) Within 30 days after an order is issued pursuant to Section 567, 581, 582, 586, or 591, or subdivision (c) of Section 587, the person to whom the order is issued may file with the commissioner an application for a hearing on the order.

(b) If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner or within any longer period to which the person subject to the order consents, the order shall be deemed rescinded.

(c) Within 30 days after the hearing, or within any longer period to which the person consents, the commissioner shall affirm, modify, or rescind the order. If the commissioner fails to affirm, modify, or rescind the order within that time limit, the order shall be deemed rescinded.

(d) The right to petition for judicial review of the order shall not be affected by the failure of the person subject to the order to apply to the commissioner for a hearing on the order pursuant to subdivision (a).

(Added by Stats. 2011, Ch. 243, Sec. 2. Effective January 1, 2012.)

553.
  

In addition to any other action or requirement the commissioner deems necessary or advisable, an order issued pursuant to Section 580, 581, 582, 585, 586, or 587 may require the person subject to the order to do any of the following:

(a) Make restitution or provide reimbursement, indemnification, or guarantee against loss, if the subject institution, subject person, or holding company was unjustly enriched by the action or violation or if the action or violation involved a reckless disregard for any provision of this division, of any regulation or order issued under this division, of any other applicable law, or of any agreement with the commissioner.

(b) Restrict the growth of the subject institution.

(c) Dispose of any loan or other asset.

(d) Correct violations of law.

(e) Employ qualified officers or employees, who may be subject to approval of the commissioner.

(f) Limit the activities or functions of the subject institution, subject person, or holding company.

(Added by Stats. 2011, Ch. 243, Sec. 2. Effective January 1, 2012.)

554.
  

If the commissioner takes possession of a subject institution without a prior notice or hearing, or takes action against a subject person without prior notice or hearing, the commissioner shall, upon taking possession or taking that action, concurrently provide to the subject institution or subject person a written order. The order shall set forth the condition or conditions of the subject institution or action or actions of the subject person that constitute the basis or bases for the commissioner’s action. In any case where the commissioner takes possession of a subject institution, the commissioner shall establish, by clear evidence, the basis for his or her action.

(Added by Stats. 2011, Ch. 243, Sec. 2. Effective January 1, 2012.)

FINFinancial Code - FIN1.