Code Section Group

Financial Code - FIN

DIVISION 1.1. BANKING [1000 - 1910]

  ( Division 1.1 added by Stats. 2011, Ch. 243, Sec. 3. )

CHAPTER 16. Trust Companies [1550 - 1613]

  ( Chapter 16 added by Stats. 2011, Ch. 243, Sec. 3. )

ARTICLE 1. General Provisions [1550 - 1557]
  ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

1550.
  

No corporation shall engage in the trust business unless:

(a) Its articles comply with the requirements of subdivision (b), (d), or (e) of Section 1100; and

(b) It has received from the commissioner a certificate of authority pursuant to Section 1042 to engage in the trust business, or, if it is a bank, has received the authorization of the commissioner to engage in the trust business; and

(c) It has deposited with the State Treasurer money or securities in compliance with Article 3 (commencing with Section 1570) of this chapter.

(Added by Stats. 2011, Ch. 243, Sec. 3. Effective January 1, 2012.)

1551.
  

Any commercial bank or industrial bank, with the prior authorization of the commissioner, may engage in the trust business, if its articles comply with the requirements of subdivision (b) of Section 1100. Any bank so authorized shall, in the conduct of its trust business, comply with and be governed by all of the provisions of this chapter, except the provisions of Section 1580. An application for such authorization shall be in such form and contain such information as the commissioner may require, and be accompanied by a fee of one thousand dollars ($1,000).

(Added by Stats. 2011, Ch. 243, Sec. 3. Effective January 1, 2012.)

1552.
  

No California state bank may engage in trust business at a place unless the place is its head office, an authorized branch office, or an authorized place of business.

(Added by Stats. 2011, Ch. 243, Sec. 3. Effective January 1, 2012.)

1553.
  

The following persons are exempt from Section 1550:

(a) Any natural person serving as trustee of one or more trusts where at least one trustor is a family member of that trustee. For purposes of this section, “family member” means any lineal ancestor, lineal descendant, person having a common lineal ancestor of not more than four generations distant, spouse, father-in-law, mother-in-law, sister-in-law, brother-in-law, stepparent, or stepchild.

(b) Any member of the State Bar, as specified in Section 6002 of the Business and Professions Code, any certified public accountant, as defined in Section 5033 of the Business and Professions Code, and any professional corporation of one or more members of the State Bar or certified public accountants, where these professionals are acting as trustee of a trust established by them for their respective clients, provided that the member of the State Bar, certified public accountant, or professional corporation engages in no advertising for trust business in this state.

(c) Subject to all applicable limitations and restrictions in law for nonprofit corporations, any nonprofit corporation acting as trustee incidental to the purposes for which it was organized.

(d) Any person appointed as receiver, trustee, or other fiduciary by a court of competent jurisdiction acting pursuant to that authority.

(e) Any person licensed as a professional fiduciary pursuant to Chapter 6 (commencing with Section 6500) of Division 3 of the Business and Professions Code.

(Added by Stats. 2011, Ch. 243, Sec. 3. Effective January 1, 2012.)

1554.
  

In this section, “subject national banking association” means a national banking association that (a) maintains its main office or a branch office in this state, (b) is authorized to transact a trust business, and (c) has complied with the requirements of Article 3 (commencing with Section 1570) of this chapter and of all other laws of this state relating to the deposit of securities for the protection of court and private trusts. A subject national banking association may engage in and conduct a trust business and may be appointed by any court to act in any fiduciary capacity in which a trust company is authorized to act. All acts provided in this code to be performed by the commissioner, the State Treasurer, or other public officials for or in respect to the deposit of securities by trust companies, shall be performed for subject national banking associations equally with trust companies. Every subject national banking association shall be permitted to use the word “trust” in its corporate name and to advertise its authority to engage in and conduct a trust business and to advertise for and solicit trust business in this state, notwithstanding any contrary provision in this division or in any other law. The commissioner shall have access to reports of examination made by the Comptroller of the Currency insofar as they relate to the trust department of a subject national banking association. For purposes of Article 3 (commencing with Section 1570), the principal place of business of a national banking association that maintains its main office in another state of the United States and maintains a California branch office shall be deemed to be situated in the city where the California branch office is located or, if the national banking association maintains California branch offices in two or more cities, in the city with the largest population.

(Added by Stats. 2011, Ch. 243, Sec. 3. Effective January 1, 2012.)

1555.
  

No foreign corporation, other than a national banking association or a foreign (other state) state bank that is authorized to conduct a trust business in this state, shall have or exercise the powers of a trust company nor directly or indirectly transact or conduct in this state a trust business as defined in Section 115. However, a foreign corporation that is authorized by its articles to exercise trust powers may act as trustee for the following purposes:

(a) To deliver bonds and receive payments therefor.

(b) To deliver permanent bonds in exchange for temporary bonds of the same issue.

(c) To deliver refunding bonds in exchange for those of a prior issue or issues.

(d) To register bonds or to exchange registered bonds for coupon bonds or coupon bonds for registered bonds.

(e) To pay interest on the bonds, and take up and cancel coupons representing the interest payment.

(f) To redeem and cancel bonds when called for redemption or to pay and cancel bonds when due.

(g) To certify registered bonds for the purpose of exchanging registered bonds for coupon bonds.

A foreign corporation that is authorized by its articles to exercise trust powers may be appointed and may accept appointment and act as trustee under any mortgage, deed of trust, or other instrument securing bonds or other obligations issued or to be issued by any railroad corporation that owns a railroad operating in the State of California and extending into another state.

A foreign corporation exercising in this state the powers conferred by this section shall not establish or maintain directly or indirectly any branch office or agency in this state unless it has complied with all of the applicable provisions of Chapter 20 (commencing with Section 1750) or of Chapter 19 (commencing with Section 1670).

(Added by Stats. 2011, Ch. 243, Sec. 3. Effective January 1, 2012.)

1556.
  

Pursuant to the authority contained in Section 1 of Article XV of the California Constitution, the restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution shall not apply to any obligations of, loans made or arranged by, or forbearances of, any of the following that is authorized to engage in the trust business, when acting in its fiduciary capacity:

(a) Any California state bank.

(b) Any national bank that maintains its main office or a branch office in this state.

(c) Any foreign (other state) state bank that maintains a branch office in this state.

This section creates and authorizes an exempt class of persons pursuant to Section 1 of Article XV of the Constitution.

This section does not exempt a bank authorized to transact a trust business or a subsidiary thereof from complying with all other laws and regulations governing the business in which the bank or subsidiary is engaged.

(Added by Stats. 2011, Ch. 243, Sec. 3. Effective January 1, 2012.)

1557.
  

The Legislature finds and declares that it is important to inform taxpayers that they may make voluntary contributions to certain funds or programs, as provided on the state income tax return. The Legislature further finds and declares that many taxpayers remain unaware of the voluntary contribution check-offs on the state income tax return. Therefore, it is the intent of the Legislature to encourage all persons who prepare state income tax returns to inform their clients in writing, prior to the completion of any tax return, that they may make a contribution to any voluntary contribution check-off on the state income tax return if they so choose.

(Added by Stats. 2011, Ch. 243, Sec. 3. Effective January 1, 2012.)

FINFinancial Code - FIN1.