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  ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2.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 5. Suspension or Possession of a License [590 - 595]
  ( Article 5 added by Stats. 2011, Ch. 243, Sec. 2. )

590.
  

The commissioner may revoke or suspend any license issued by, or under the authority of, the commissioner, if, after notice and opportunity to be heard, the commissioner finds any of the following:

(a) The licensee has violated, is violating, or that there is reasonable cause to believe that the licensee is about to violate, any provision of any of the following:

(1) Any division subject to the jurisdiction of the commissioner.

(2) Any regulation promulgated by, or subject to the jurisdiction of, the commissioner.

(3) A provision of any other applicable law.

(4) A provision of any order issued by the commissioner.

(5) A provision of any written agreement between the licensee and the commissioner.

(6) A condition imposed on any written approval granted by the commissioner.

(b) Any fact or condition exists which, if it had existed at the time of the original application for the license, would be grounds for denying the application for the license.

(c) The licensee is conducting its business in an unsafe or unsound manner.

(d) The licensee is in such condition that it is unsafe or unsound for the licensee to transact appropriate licensee business.

(e) The licensee has inadequate capital or net worth or is insolvent.

(f) The licensee failed to pay any of its obligations as they came due or is reasonably expected to be unable to pay its obligations as they come due.

(g) The licensee has applied for an adjudication of bankruptcy, reorganization, arrangement, or other relief under any bankruptcy, reorganization, insolvency, or moratorium law, or that any person has applied for any such relief under any such law against the licensee and the licensee has by any affirmative act approved of, or consented to, the action or the relief has been granted.

(h) The licensee has ceased to transact the business the licensee is authorized to conduct pursuant to its license.

(i) The licensee refuses to submit its books, papers, and affairs to the inspection of any examiner.

(j) Any officer of the licensee refuses to be examined upon oath touching the concerns of the licensee.

(k) The licensee has, with the approval of its board, requested the commissioner to take possession of its property and business.

(Amended by Stats. 2013, Ch. 334, Sec. 28. Effective January 1, 2014.)

591.
  

If the commissioner finds that any of the factors set forth in Section 590 is true with respect to any licensee and that it is necessary for the protection of the public interest, the commissioner may issue an order immediately suspending or revoking the licensee’s license.

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

592.
  

If the commissioner finds that any of the factors set forth in subdivisions (a) to (k), inclusive, is true with respect to a licensee, the commissioner may by order, without any prior notice or opportunity to be heard, take possession of the property and business of the licensee:

(a) The licensee has violated any provision of (1) any division subject to the jurisdiction of the commissioner, (2) any regulation promulgated by, or subject to the jurisdiction of, the commissioner, (3) any provision of any other applicable law, (4) any provision of any order issued by the commissioner, (5) any provision of any written agreement made between the commissioner and the licensee, or (6) a condition imposed on any written approval granted by the commissioner.

(b) The licensee is conducting its business in an unsafe or unsound manner.

(c) The licensee is in such condition that it is unsafe or unsound for the licensee to transact appropriate licensee business.

(d) The licensee has inadequate capital or net worth or is insolvent.

(e) If the licensee is a bank, the tangible shareholders’ equity of the bank is less than the following:

(1) If the bank is a commercial bank or industrial bank, the greater of three percent of the bank’s total assets or one million dollars ($1,000,000).

(2) If the bank is a trust company other than a commercial bank authorized to engage in trust business, one million dollars ($1,000,000).

(f) The licensee failed to pay any of its obligations as they came due or is reasonably expected to be unable to pay its obligations as they come due.

(g) The licensee has applied for an adjudication of bankruptcy, reorganization, arrangement, or other relief under any bankruptcy, reorganization, insolvency, or moratorium law, or that any person has applied for any such relief under any such law against the licensee and the licensee has by any affirmative act approved of or consented to the action or the relief has been granted.

(h) The licensee has ceased to transact the business the licensee is authorized to conduct pursuant to its license.

(i) The licensee refuses to submit its books, papers, and affairs to the inspection of any examiner.

(j) Any officer of the licensee refuses to be examined upon oath touching the concerns of the licensee.

(k) The licensee has, with the approval of its board, requested the commissioner to take possession of its property and business.

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

593.
  

(a) If the commissioner takes possession of the property and business of a licensee pursuant to Section 592, the licensee may, within 10 days, apply to the superior court in the county where its head office is located to enjoin further proceedings. The court may, after citing the commissioner to show cause why further proceedings should not be enjoined and after a hearing, dismiss the application or enjoin the commissioner from further proceedings and order the commissioner to surrender the property and business of the licensee to the licensee or make any further order as may be just. The judgment of the court may be appealed by the commissioner or by the licensee as allowed by law.

(b) At any time after the commissioner takes possession of the property and business of a licensee pursuant to Section 592, the licensee may, with the approval of the commissioner, resume business upon conditions as the commissioner may prescribe.

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

594.
  

(a) Upon taking possession of the property and business of any licensee, the commissioner shall give notice of that fact to all persons holding or having in their possession any assets of the licensee. No person knowing of the taking, or who has been notified thereof, shall have a lien or charge upon any assets of the licensee for any payment, advance, or clearance thereafter made or for any liability thereafter incurred.

(b) The giving of notice in accordance with this section shall not be deemed to be a prerequisite to the taking of possession of the property and business of the licensee.

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

595.
  

The commissioner is deemed to take possession of the entire property and business of a licensee when the commissioner takes possession of the business and property of the head office of the licensee.

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

FINFinancial Code - FIN5.