Code Section Group

Financial Code - FIN

DIVISION 1.1. BANKING [1000 - 1910]

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

CHAPTER 20. Foreign (Other Nation) Banks [1750 - 1835]

  ( Chapter 20 added by Stats. 2011, Ch. 243, Sec. 3. )

ARTICLE 1. General Provisions [1750 - 1768]
  ( Article 1 added by Stats. 2011, Ch. 243, Sec. 3. )

1750.
  

In this chapter, unless the context otherwise requires:

(a) “Agency” means a depositary agency or a nondepositary agency.

(b) “Branch office” means a limited branch office, a retail branch office, or a wholesale branch office.

(c) “Business in this state,” when used with respect to a foreign (other nation) bank which is licensed to maintain one or more agencies or branch offices, includes (without limitation) the aggregate business of all the offices.

(d) “Controlling person,” when used with respect to a foreign (other nation) bank, means any person who, directly or indirectly, controls the bank. For purposes of this subdivision, “control” has the meaning set forth in subdivision (b) of Section 1250, and “person” has the meaning set forth in subdivision (d) of Section 1250.

(e) “Depositary agency,” when used with respect to a foreign (other nation) bank, means a place in this state at which the bank transacts commercial banking business but at which it does not transact the business of receiving deposits, except as permitted under paragraph (2) of subdivision (a) of Section 1805.

(f) “Executive officer,” when used with respect to a foreign (other nation) bank or a controlling person of a foreign (other nation) bank, means the chief executive officer, the chief operating officer, the chief financial officer, and any other person who participates or has authority to participate in major policymaking functions of the bank or controlling person. “Executive officer,” when used with respect to a foreign (other nation) bank, includes the head of the international division (or, if there is no such division, the closest equivalent division or unit) of such bank.

(g) “Federal agency” has the meaning set forth in Section 1(b) of the International Banking Act of 1978.

(h) “Federal branch” has the meaning set forth in Section 1(b) of the International Banking Act of 1978.

(i) (1) “License” means a license issued under this chapter, authorizing a foreign bank to maintain an office.

(2) To be “licensed” means to be issued or to hold a license.

(3) To be “licensed to transact business in this state,” when used with respect to a foreign (other nation) bank, means that the bank is licensed to maintain an agency or branch office.

(j) “Limited branch office,” when used with respect to a foreign (other nation) bank, means a place in this state at which the bank transacts commercial banking business but at which it does not transact the business of receiving deposits except as permitted under paragraph (3) of subdivision (a) of Section 1805.

(k) “Nondepositary agency,” when used with respect to a foreign (other nation) bank, means a place in this state at which the bank transacts commercial banking business, except the business of receiving deposits.

(l) “Office,” when used with respect to a foreign (other nation) bank, means any agency, branch office, or representative office of the bank.

(m) “Primary office,” when used with respect to a foreign (other nation) bank that is licensed to maintain a single agency or branch office, means the agency or branch office and, when used with respect to a foreign (other nation) bank that is licensed to maintain two or more agencies or branch offices, means that one of the offices which the bank has designated as its primary office in accordance with Section 1766.

(n) “Representative office,” when used with respect to a foreign (other nation) bank, means an office in this state at which the bank engages in representational functions but at which it does not transact commercial banking business.

(o) “Retail branch office,” when used with respect to a foreign (other nation) bank, means a place in this state at which the bank transacts commercial banking business, including (without limitation) the business of receiving deposits.

(p) “Wholesale branch office,” when used with respect to a foreign (other nation) bank, means a place in this state at which the bank transacts commercial banking business but at which it does not transact the business of receiving deposits except as permitted under paragraph (4) of subdivision (a) of Section 1805.

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

1751.
  

Nothing in this chapter, except Section 1760, applies to a federal agency or branch in this state.

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

1752.
  

(a) In this section, “subject bank” means a bank organized under the laws of any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, or the Northern Mariana Islands.

(b) Nothing in this chapter, except subdivision (c), shall apply to a subject bank that maintains a branch office in this state as a foreign (other state) state bank pursuant to Chapter 19 (commencing with Section 1670), Section 13(f), 13(k), 18(d), or 44 of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1823(f), 1823(k), 1828(d), or 1831u), or Section 9 of the Federal Reserve Act (12 U.S.C. Sec. 321).

(c) No subject bank shall at the same time maintain (1) as a foreign (other nation) bank, an office in this state licensed under this chapter and (2) as a foreign (other state) state bank, a branch office in this state pursuant to Chapter 19 (commencing with Section 1670), Section 13(f), 13(k), 18(d), or 44 of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1823(f), 1823(k), 1828(d), or 1831u), or Section 9 of the Federal Reserve Act (12 U.S.C. Sec. 321).

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

1753.
  

For purposes of this chapter, offices of foreign (other nation) banks are divided into classes and ranked in ascending order, as follows:

(a) Representative office.

(b) Nondepositary agency.

(c) Depositary agency.

(d) Limited branch office.

(e) Wholesale branch office.

(f) Retail branch office.

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

1754.
  

(a) For purposes of this chapter:

(1) Changing a lower class office into a higher class office shall be treated as establishing the higher class office, but not as closing the lower class office.

(2) Changing a higher class office into a lower class office shall be treated as closing the higher class office, but not as establishing the lower class office.

(b) In the case of changing a higher class office into a lower class office, when the application for approval to close the higher class office has been approved and all conditions precedent to the closing have been fulfilled, the foreign (other nation) bank may change the higher class office into the lower class office, and the commissioner shall issue a license authorizing the bank to maintain the lower class office.

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

1755.
  

Fees shall be paid to, and collected by, the commissioner, as follows:

(a) The fee for filing with the commissioner an application by a foreign (other nation) bank that is not licensed to transact business in this state for approval to establish a branch office shall be two thousand dollars ($2,000).

(b) The fee for filing with the commissioner an application by a foreign (other nation) bank that is not licensed to transact business in this state for approval to establish an agency shall be one thousand five hundred dollars ($1,500).

(c) The fee for filing with the commissioner an application by a foreign (other nation) bank that is licensed to transact business in this state for approval to establish a branch office shall be one thousand dollars ($1,000).

(d) The fee for filing with the commissioner an application by a foreign (other nation) bank that is licensed to transact business in this state for approval to establish an agency shall be seven hundred fifty dollars ($750).

(e) The fee for filing with the commissioner an application by a foreign (other nation) bank for approval to establish a representative office shall be two hundred fifty dollars ($250).

(f) The fee for filing with the commissioner an application by a foreign (other nation) bank that is licensed to maintain an agency or branch office for approval to relocate or to close the office shall be two hundred fifty dollars ($250).

(g) The fee for filing with the commissioner an application by a foreign (other nation) bank that is licensed to maintain a representative office for approval to relocate or to close the representative office shall be one hundred dollars ($100).

(h) The fee for issuing a license shall be twenty-five dollars ($25).

(i) Each foreign (other nation) bank that on June 1st of any year is licensed to maintain a representative office but is not licensed to transact business in this state shall pay, on or before the following July 1st, a fee of two hundred fifty dollars ($250) for each such representative office.

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

1756.
  

Each application filed with the commissioner under this chapter or under any regulation or order issued under this chapter shall be in such form, shall contain such information, shall be signed in such manner, and shall (if the commissioner so requires by regulation or order) be verified in such manner, as the commissioner may by regulation or order require.

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

1757.
  

(a) In this section, “act” includes (without limitation) omission.

(b) For purposes of making findings on an application by a foreign (other nation) bank for approval to establish an office:

(1) The commissioner may, in the absence of credible evidence to the contrary, presume that the directors, executive officers, and any controlling person of the bank and the directors and executive officers of any controlling person of the bank are each of good character and sound financial standing.

(2) The commissioner may find that the bank, a director, executive officer, or a controlling person of the bank, or a director or executive officer of a controlling person of the bank is not of good character if that person has done any of the following:

(A) Has been convicted of, or has pleaded nolo contendere to, any crime involving an act of fraud or dishonesty.

(B) Has consented to or suffered a judgment in any civil action based upon conduct involving an act of fraud or dishonesty.

(C) Has consented to or suffered the suspension or revocation of any professional, occupational, or vocational license based upon conduct involving an act of fraud or dishonesty.

(D) Has willfully made or caused to be made in any application or report filed with the commissioner or in any proceeding before the commissioner, any statement that was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or has willfully omitted to state in any application or report filed with the commissioner or in any proceeding before the commissioner, any material fact that was required to be stated therein.

(E) Has willfully committed any violation of, or has willfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person of, any provision of this division or of any regulation or order issued under this division.

(c) Paragraph (2) of subdivision (b) shall not be deemed to be an exclusive list of the grounds upon which the commissioner may find, for purposes of making findings on an application by a foreign (other nation) bank for approval to establish an office, that the bank, a director, executive officer, or controlling person of the bank, or a director or executive officer of a controlling person of the bank is not of good character.

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

1758.
  

(a) Each foreign (other nation) bank that is licensed to maintain an office shall file with the commissioner reports as and when the commissioner may, by regulation or order, require.

(b) Each report filed with the commissioner under this chapter or under any regulation or order issued under this chapter shall be in the form, shall contain the information, shall be signed in the manner, and shall (if the commissioner so requires by regulation or order) be verified in the manner, that the commissioner may, by regulation or order, require.

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

1759.
  

Each foreign (other nation) bank that is licensed to maintain an office shall make, keep, and preserve at the office or at another place that the commissioner may, by regulation or order, approve, the books, accounts, and other records relating to the business of the office, in the form, in the manner, and for the time that the commissioner may, by regulation or order, provide.

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

1760.
  

(a) No foreign (other nation) bank which is licensed to maintain an agency or branch office shall concurrently maintain a federal agency or federal branch in this state.

(b) No foreign (other nation) bank which maintains a federal agency or federal branch in this state shall concurrently be licensed to maintain an agency or branch office in this state.

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

1761.
  

(a) No foreign (other nation) bank shall concurrently be licensed to maintain offices of different classes.

(b) Subdivision (a) does not prohibit a foreign (other nation) bank that is licensed to maintain a representative office from being concurrently licensed to maintain an office of a different class or to prohibit a foreign (other nation) bank that is licensed to maintain an office other than a representative office from being concurrently licensed to maintain a representative office.

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

1762.
  

(a) (1) No foreign (other nation) bank (other than a bank that is licensed to maintain an agency or branch office) shall be issued a license to maintain a representative office unless it shall have first filed with the commissioner, in the form that the commissioner may by regulation or order require, an appointment irrevocably appointing the commissioner and the commissioner’s successor from time to time in office to be the bank’s attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the bank or any of its successors that arises out of the activities in this state of the representative office after the appointment has been filed, with the same force and validity as if served personally on the bank or its successor, as the case may be.

(2) Any foreign (other nation) bank (other than a bank that is licensed to maintain an agency or branch office or that maintains a federal agency or federal branch in this state) that maintains a representative office and that has not filed with the commissioner an appointment pursuant to paragraph (1) shall be deemed by the maintenance of that office to have appointed the commissioner as its attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the bank or any of its successors that arises out of the activities in this state of the representative office with the same force and validity as if served personally on the bank or its successor, as the case may be.

(b) (1) No foreign (other nation) bank shall be issued a license to maintain an agency or branch office unless it shall have first filed with the commissioner, in the form that the commissioner may by regulation or order require, an appointment irrevocably appointing the commissioner and the commissioner’s successor from time to time in office to be the bank’s attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the bank or any of its successors that arises after the appointment has been filed, with the same force and validity as if served personally on the bank or its successor, as the case may be.

(2) Any foreign (other nation) bank that maintains an agency or branch office (other than a federal agency or federal branch) and that has not filed with the commissioner an appointment pursuant to paragraph (1) shall be deemed by the maintenance of that office to have appointed the commissioner as its attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the bank or any of its successors with the same force and validity as if served personally on the bank or its successor, as the case may be.

(c) Service may be made on a foreign (other nation) bank that has appointed or is deemed to have appointed the commissioner as its attorney for service of process by leaving a copy of the process at any office of the commissioner. However, the service is not effective unless (1) the party making the service, who may be the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the bank served at its last address on file with the commissioner at any of its offices in this state or at its head office, and (2) an affidavit of compliance with this subdivision by the party making service is filed in the case on or before the return date, if any, or within any further time that the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allows.

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

1763.
  

No license shall be transferable or assignable.

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

1764.
  

Each foreign (other nation) bank that is licensed to maintain an office shall post its license in a conspicuous place at the office.

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

1765.
  

(a) Each foreign (other nation) bank that is licensed to maintain an office shall assign to the office a popular name that consists of a specific designation by name or number and shall post the popular name and the name of the bank in a conspicuous place at the office.

(b) The popular name that a foreign (other nation) bank assigns to a representative office that it is licensed to maintain shall include the term “representative office.”

(c) The popular name that a foreign (other nation) bank assigns to an agency that it is licensed to maintain shall not include the term “branch” unless the term is modified by the word “foreign” or “overseas” or by a similar word.

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

1766.
  

Whenever a foreign (other nation) bank is licensed to maintain two or more agencies or branch offices, it shall designate one of such offices as its primary office.

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

1767.
  

Each foreign (other nation) bank that is licensed to maintain an office shall conduct all of the business of the office in a single building or in adjoining buildings. However, for good cause and with the approval of the commissioner, the bank may conduct part of the business of the office elsewhere in the same vicinity.

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

1768.
  

Any foreign (other nation) bank that, at the time it makes a loan or forbearance or executes a contract therefor, has assets equal to at least one hundred million dollars ($100,000,000), is licensed to maintain an office in California, is licensed or otherwise authorized by another state of the United States to maintain an agency or branch office in that state, or maintains a federal agency or federal branch in any state of the United States is exempted from the restrictions of Section 1 of Article XV of the Constitution relating to rates of interest upon the loan or forbearance of any money, goods, or things in action or on accounts after demand.

This section does not exempt a foreign (other nation) bank or a subsidiary thereof from complying with all other laws and regulations governing the business in which such a bank or subsidiary is engaged.

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

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

FINFinancial Code - FIN1.