Code Section Group

Financial Code - FIN

DIVISION 6. ESCROW AGENTS [17000 - 17703]

  ( Division 6 enacted by Stats. 1951, Ch. 364. )

CHAPTER 4. Revocation of License [17600 - 17609.2]
  ( Chapter 4 enacted by Stats. 1951, Ch. 364. )

17600.
  

(a) An escrow agent’s license remains in effect until surrendered, revoked, or suspended.

(b) A licensee that ceases to engage in the business regulated by this division and desires to no longer be licensed shall notify the commissioner in writing and, at that time, tender the license and all other indicia of licensure to the commissioner. Within 105 days of the written notice to the commissioner, the licensee shall submit to the commissioner, at its own expense, a closing audit report as of the date the license is tendered to the commissioner for surrender, or for another period as the commissioner may specify, to be performed by an independent certified public accountant. The closing audit shall include, but not be limited to, information required by the commissioner, a bank reconciliation of the trust account, and a verified statement from a certified public accountant confirming lawful disbursement of funds. A license is not surrendered until the commissioner has reviewed and accepted the closing audit report, a determination has been made by the commissioner that acceptance of the surrender is in the public interest, and tender of the license is accepted in writing by the commissioner.

(Amended by Stats. 2009, Ch. 568, Sec. 3. Effective January 1, 2010.)

17601.
  

If the commissioner has reason to believe that any escrow agent is violating the provisions of this division, the commissioner may investigate the escrow agent’s business and examine the books, accounts, records, and files used in the business of every escrow agent and of every person who acts or claims to act as principal or agent under or without the authority of this division. For the purposes of examination the commissioner and representatives of the commissioner shall have free access to the offices and places of business, books, accounts, records, papers, files, safes, and vaults of all persons examined. The cost of any investigation, inspection, and examination of a licensee under this section shall be paid to the commissioner as provided in Section 17405.1.

(Amended by Stats. 1996, Ch. 670, Sec. 4. Effective January 1, 1997.)

17602.
  

If it appears to the commissioner that any licensed escrow agent has violated its articles of incorporation, or any law or rule binding upon it, the commissioner shall, by written order addressed to the agent direct the discontinuance of such violation. The order shall be effective immediately, but shall not become final except in accordance with the provisions of Section 17604.

(Amended by Stats. 1985, Ch. 1560, Sec. 39. Effective October 2, 1985.)

17602.5.
  

If any licensed escrow agent fails to make any reports required by law or by the commissioner within ten (10) days from the day designated for the making of the reports, or within any extension of time granted by the commissioner, or fails to include therein any matter required by law or by the commissioner, such failure shall constitute grounds for the suspension or revocation of the license held by such escrow agent.

(Added by Stats. 1961, Ch. 475.)

17603.
  

If it appears to the commissioner that any licensed escrow agent is conducting business in an unsafe or injurious manner, the commissioner shall, by written order addressed to the agent direct the discontinuance of such unsafe or injurious practices. The order shall be effective immediately, but shall not become final except in accordance with the provisions of Section 17604.

(Amended by Stats. 1985, Ch. 1560, Sec. 40. Effective October 2, 1985.)

17604.
  

No order issued pursuant to Sections 17602 or 17603 may become final except after notice to any licensed escrow agent affected thereby of the intention of the commissioner to make such order final and of the reasons therefor and that upon receipt of a request the matter will be set down for hearing to commence within 15 business days after such receipt unless the licensed agent affected consents to a later date. If no hearing is requested within 30 days after the mailing of such notice and none is ordered by the commissioner, the order may become final without hearing and the licensed escrow agent shall immediately discontinue the practices named in the order. If a hearing is requested or ordered, it shall be held in accordance with the provisions of the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all of the powers granted thereunder. If upon the hearing, it appears to the commissioner that the licensed agent is conducting business in an unsafe and injurious manner or is violating its articles of incorporation or any law of this state, or any rule binding upon it, the commissioner shall make the order of discontinuance final and the licensed escrow agent shall immediately discontinue the practices named in the order.

(Amended by Stats. 1981, Ch. 773, Sec. 7.)

17605.
  

The licensed escrow agent has ten (10) days after an order is made final in which to commence action to restrain enforcement of such order, and unless such action is commenced, and the enforcement of such order is enjoined within ten (10) days by the court in which the suit is brought, the licensed escrow agent shall comply with the order.

(Amended by Stats. 1961, Ch. 475.)

17606.
  

The commissioner may immediately revoke by order the escrow agent’s license if the licensee fails to comply with any order, unless the escrow agent secures a court order restraining the enforcement of the commissioner’s revocation order.

(Amended by Stats. 2002, Ch. 772, Sec. 12. Effective January 1, 2003.)

17606.1.
  

The license of an escrow agent shall be deemed revoked upon the completion or closure of a court approved liquidation of the business of the escrow agent, whether pursuant to Section 17635 or 17636, or otherwise, unless the escrow agent within 10 days of the court’s order approving the closing or completion of liquidation secures a court order restraining the revocation from taking effect.

(Added by Stats. 1994, Ch. 423, Sec. 3. Effective January 1, 1995.)

17607.
  

(a) Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this division or any rule or order hereunder, the commissioner may in the commissioner’s discretion bring an action in the name of the people of the State of California in the superior court to enjoin the acts or practices or to enforce compliance with this law or any rule or order hereunder. Upon a proper showing a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and a receiver, monitor, conservator, or other designated fiduciary or officer of the court, which may include the commissioner, may be appointed for the defendant or the defendant’s assets, or any other ancillary relief may be granted as appropriate.

A receiver, monitor, conservator, or other designated fiduciary or officer of the court appointed by the superior court pursuant to this section may, with the approval of the court, exercise any or all of the powers of the defendant’s officers, directors, partners, trustees, or persons who exercise similar powers and perform similar duties, including the filing of a petition for bankruptcy. No action at law or in equity may be maintained by any party against the commissioner, or a receiver, monitor, conservator, or other designated fiduciary or officer of the court, by reason of their exercising these powers or performing these duties pursuant to the order of, or with the approval of, the superior court.

(b) If the commissioner determines it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief, including, but not limited to, a claim for restitution or disgorgement or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action, and the court shall have jurisdiction to award additional relief.

(Repealed and added by Stats. 1990, Ch. 1186, Sec. 7.)

17608.
  

The commissioner may, after notice and a reasonable opportunity to be heard, suspend or revoke any license if he finds that:

(a) The licensee has failed to maintain in effect a bond required under the provisions of this division.

(b) The licensee has violated any provision of this division or any rule made by the commissioner under and within the authority of this division.

(c) Any fact or condition exists which, if it had existed at the time of the original application for such license, reasonably would have warranted the commissioner in refusing originally to issue such license.

(Amended by Stats. 1973, Ch. 705.)

17609.
  

The revocation, suspension, surrender or expiration of an escrow agent’s license does not impair or affect pre-existing escrows lawfully contracted, but nothing contained in this division shall be deemed to authorize the acceptance of further funds or documents into escrow subsequent to such revocation, surrender or expiration or during any period of suspension.

(Amended by Stats. 1955, Ch. 261.)

17609.1.
  

The power of investigation and examination by the commissioner is not terminated by the surrender, suspension, or revocation of any license issued by him.

(Added by Stats. 1973, Ch. 705.)

17609.2.
  

Whenever the commissioner deems it necessary for the general welfare of the public, the commissioner has continuous authority to exercise the powers set forth in this division whether or not an application for a license has been filed with the commissioner, any license has been issued, or if issued, has been surrendered, suspended, or revoked.

(Amended by Stats. 2002, Ch. 772, Sec. 13. Effective January 1, 2003.)

FINFinancial Code - FIN