citation: FIN § 4963

text: A conversion shall have the same effect as provided in Section 4950 in the case of a conversion of the type defined in Section 4940.

history: (History: Amended by Stats. 1995, Ch. 480, Sec. 197. Effective October 2, 1995.)


kind: section

code: FIN

citation: FIN § 4964

text:
Promptly after a conversion becomes effective, the resulting depository corporation shall:

(a) Surrender to the commissioner for cancellation the certificates of authority or licenses issued by the commissioner to the converting depository corporation; and

(b) File with the commissioner such report of the conversion as the commissioner may require.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 544. Effective January 1, 1997. Operative July 1, 1997.)

chapter: 5. Conversion

path: 1.6. DEPOSITORY CORPORATIONS—SALE, MERGER, AND CONVERSION > 5. Conversion > 3. Conversion of California State Depository Corporation Into Federal Depository Corporation


citation: FIN § 4965

text:
(a) After a conversion becomes effective, the resulting depository corporation may issue an officers’ certificate, stating that the converting depository corporation converted into the resulting depository corporation and specifying the time at which the conversion became effective.

(b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the conversion and of the regularity of the proceedings taken for the conversion and shall be conclusive evidence of such matters in favor of any innocent purchaser or encumbrancer for value.

history: (History: Added by Stats. 1982, Ch. 1411, Sec. 3.)

division: 1.6. DEPOSITORY CORPORATIONS—SALE, MERGER, AND CONVERSION

article: 3. Conversion of California State Depository Corporation Into Federal Depository Corporation


citation: FIN § 4966

text:
(a) Within 60 days after a conversion, the resulting depository corporation shall file with the Secretary of State an officers’ certificate reciting the name of the converting depository corporation, the name of the resulting depository corporation, the effective date of the conversion, and that the conversion has been completed in compliance with the provisions of federal law. The Secretary of State shall enter the fact of the conversion on the Secretary of State’s corporation records for the converting depository corporation, and the converting depository corporation shall thereafter not be deemed to be a corporation organized under the laws of this state.

(b) As to any conversion, whenever effected, if an officers’ certificate has not been filed pursuant to subdivision (a) within 60 days after the completion of the conversion, the commissioner may file a report with the Secretary of State setting forth, to the extent the commissioner has knowledge he or she considers reliable, the recitals specified in subdivision (a), and the Secretary of State shall record the fact of the conversion with the same effect as provided in subdivision (a).

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 545. Effective January 1, 1997. Operative July 1, 1997.)


citation: FIN § 4970

text:
For purposes of this division:

(a) “Annual percentage rate” means the annual percentage rate for the loan calculated according to the provisions of the federal Truth in Lending Act and the regulations adopted thereunder by the Consumer Financial Protection Bureau.

(b) “Covered loan” means a consumer loan in which the original principal balance of the loan does not exceed the most current conforming loan limit for a single-family first mortgage loan established by the Federal National Mortgage Association in the case of a mortgage or deed of trust, and where one of the following conditions are met:

(1) For a mortgage or deed of trust, the annual percentage rate at consummation of the transaction will exceed by more than eight percentage points the yield on Treasury securities having comparable periods of maturity on the 15th day of the month immediately preceding the month in which the application for the extension of credit is received by the creditor.

(2) The total points and fees payable by the consumer at or before closing for a mortgage or deed of trust will exceed 6 percent of the total loan amount.

(c) “Points and fees” shall include the following:

(1) All items required to be disclosed as finance charges under Sections 1026.4(a) and 1026.4(b) of Title 12 of the Code of Federal Regulations, including the Official Staff Commentary, as amended from time to time, except interest.

(2) All compensation and fees paid to mortgage brokers in connection with the loan transaction.

(3) All items listed in Section 1026.4(c)(7) of Title 12 of the Code of Federal Regulations, only if the person originating the covered loan receives direct compensation in connection with the charge.

(d) “Consumer loan” means a consumer credit transaction that is secured by real property located in this state used, or intended to be used or occupied, as the principal dwelling of the consumer that is improved by a one-to-four residential unit. “Consumer loan” does not include a reverse mortgage, an open line of credit as defined in Part 1026 of Title 12 of the Code of Federal Regulations (Regulation Z), or a consumer credit transaction that is secured by rental property or second homes. “Consumer loan” does not include a bridge loan. For purposes of this division, a bridge loan is any temporary loan, having a maturity of one year or less, for the purpose of acquisition or construction of a dwelling intended to become the consumer’s principal dwelling.

(e) “Original principal balance” means the total initial amount the consumer is obligated to repay on the loan.

(f) “Licensing agency” shall mean the Bureau of Real Estate for licensed real estate brokers, the Department of Financial Protection and Innovation for licensed residential mortgage lenders, licensed finance lenders and brokers, and the commercial and industrial banks and savings associations and credit unions organized in this state.

(g) “Licensed person” means a real estate broker licensed under the Real Estate Law (Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code), a finance lender or broker licensed under the California Financing Law (Division 9 (commencing with Section 22000)), a residential mortgage lender licensed under the California Residential Mortgage Lending Act (Division 20 (commencing with Section 50000)), a commercial or industrial bank organized under the Banking Law (Division 1.1 (commencing with Section 1000)), a savings association organized under the Savings Association Law (Division 2 (commencing with Section 5000)), and a credit union organized under the California Credit Union Law (Division 5 (commencing with Section 14000)). This division shall not be construed to prevent any enforcement by a governmental entity against any person who originates a loan and who is exempt or excluded from licensure by all of the licensing agencies, based on a violation of any provision of this division. This division shall not be construed to prevent the Bureau of Real Estate from enforcing this division against a licensed salesperson employed by a licensed real estate broker as if that salesperson were a licensed person under this division. A licensed person includes any person engaged in the practice of consumer lending, as defined in this division, for which a license is required under any other provision of law, but whose license is invalid, suspended or revoked, or where no license has been obtained.

(h) “Originate” means to arrange, negotiate, or make a consumer loan.

(i) “Servicer” has the same meaning provided in Section 6(i)(2) of the federal Real Estate Settlement Procedures Act of 1974.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 107. (SB 1498) Effective January 1, 2023.)

division: 1.7. COVERED LOANS

chapter: 1. General Provisions and Definitions

path: 1.7. COVERED LOANS > 1. General Provisions and Definitions


citation: FIN § 4973

text:
The following are prohibited acts and limitations for covered loans:

(a) (1) A covered loan shall not include a prepayment fee or penalty after the first 36 months after the date of consummation of the loan.

(2) A covered loan may include a prepayment fee or penalty up to the first 36 months after the date of consummation of the loan if:

(A) The person who originates the covered loan has also offered the consumer a choice of another product without a prepayment fee or penalty.

(B) The person who originates the covered loan has disclosed in writing to the consumer at least three business days prior to loan consummation the terms of the prepayment fee or penalty to the consumer for accepting a covered loan with the prepayment penalty and the rates, points, and fees that would be available to the consumer for accepting a covered loan without a prepayment penalty.

(C) The person who originates the covered loan has limited the amount of the prepayment fee or penalty to an amount not to exceed the payment of six months’ advance interest, at the contract rate of interest then in effect, on the amount prepaid in any 12-month period in excess of 20 percent of the original principal amount.

(D) A covered loan will not impose the prepayment fee or penalty if the covered loan is accelerated as a result of default.

(E) The person who originates the covered loan will not finance a prepayment penalty through a new loan that is originated by the same person.

(b) (1) A covered loan with a term of five years or less may not provide at origination for a payment schedule with regular periodic payments that when aggregated do not fully amortize the principal balance as of the maturity date of the loan.

(2) For a payment schedule that is adjusted to account for the seasonal or irregular income of the consumer, the total installments in any year shall not exceed the amount of one year’s worth of payments on the loan. This prohibition does not apply to a bridge loan. For purposes of this paragraph, “bridge loan” means a loan with a maturity of less than 18 months that only requires payments of interest until the time when the entire unpaid balance is due and payable.

(c) A covered loan shall not contain a provision for negative amortization such that the payment schedule for regular monthly payments causes the principal balance to increase, unless the covered loan is a first mortgage and the person who originates the loan discloses to the consumer that the loan contains a negative amortization provision that may add principal to the balance of the loan.

(d) A covered loan shall not include terms under which periodic payments required under the loan are consolidated and paid in advance from the loan proceeds.

(e) A covered loan shall not contain a provision that increases the interest rate as a result of a default. This provision does not apply to interest rate changes in a variable rate loan otherwise consistent with the provisions of the loan documents, provided the change in the interest rate is not triggered by the event of default or the acceleration for the indebtedness.

(f) (1) A person who originates covered loans shall not make or arrange a covered loan unless at the time the loan is consummated, the person reasonably believes the consumer, or consumers, when considered collectively in the case of multiple consumers, will be able to make the scheduled payments to repay the obligation based upon a consideration of their current and expected income, current obligations, employment status, and other financial resources, other than the consumer’s equity in the dwelling that secures repayment of the loan. In the case of a covered loan that is structured to increase to a specific designated rate, stated as a number or formula, at a specific predetermined date not exceeding 37 months from the date of application, this evaluation shall be based upon the fully indexed rate of the loan calculated at the time of application.

The consumer shall be presumed to be able to make the scheduled payments to repay the obligation if, at the time the loan is consummated, the consumer’s total monthly debts, including amounts owed under the loan, do not exceed 55 percent of the consumer’s monthly gross income, as verified by the credit application, the consumer’s financial statement, a credit report, financial information provided to the person originating the loan by or on behalf of the consumer, or any other reasonable means.

(2) No presumption of inability to make the scheduled payments to repay the obligation shall arise solely from the fact that at the time the loan is consummated, the consumer’s total monthly debts, including amounts owed under the loan, exceed 55 percent of the consumer’s monthly gross income.

(3) In the case of a stated income loan, the reasonable belief requirement in paragraph (1) shall apply, however, for stated income loans that belief may be based on the income stated by the consumer, and other information in the possession of the person originating the loan after the solicitation of all information that the person customarily solicits in connection with loans of this type. A person shall not knowingly or willfully originate a covered loan as a stated income loan with the intent, or effect, of evading the provisions of this subdivision.

(g) A person who originates a covered loan shall not pay a contractor under a home-improvement contract from the proceeds of a covered loan other than by an instrument payable to the consumer or jointly to the consumer and the contractor or, at the election of the consumer, to a third-party escrow agent for the benefit of the contractor in accordance with terms and conditions established in a written escrow agreement signed by the consumer, the person who originates a covered loan, and the contractor prior to the disbursement of funds. No payments, other than progress payments for home-improvement work that the consumer certifies is completed, shall be made to an escrow account or jointly to the consumer and the contractor unless the person who originates the loan is presented with a signed and dated completion certificate by the consumer showing that the home-improvement contract was completed to the satisfaction of the consumer.

(h) It is unlawful for a person who originates a covered loan to recommend or encourage a consumer to default on an existing consumer loan or other debt in connection with the solicitation or making of a covered loan that refinances all or any portion of the existing consumer loan or debt.

(i) A covered loan shall not contain a call provision that permits the lender, in its sole discretion, to accelerate the indebtedness. This prohibition does not apply if repayment of the loan has been accelerated in accordance with the terms of the loan documents (1) as a result of the consumer’s default, (2) pursuant to a due-on-sale provision, or (3) due to fraud or material misrepresentation by a consumer in connection with the loan or the value of the security for the loan.

(j) A person who originates a covered loan shall not refinance or arrange for the refinancing of a consumer loan such that the new loan is a covered loan that is made for the purpose of refinancing, debt consolidation or cash out, that does not result in an identifiable benefit to the consumer, considering the consumer’s stated purpose for seeking the loan, fees, interest rates, finance charges, and points.

(k) (1) A covered loan shall not be made unless the following disclosure, written in 12-point font or larger, has been provided to the consumer no later than three business days prior to signing of the loan documents of the transaction:

CONSUMER CAUTION AND HOME OWNERSHIP COUNSELING NOTICE

If you obtain this loan, the lender will have a mortgage on your home. You could lose your home, and any money you have put into it, if you do not meet your obligations under the loan.

Mortgage loan rates and closing costs and fees vary based on many other factors, including your particular credit and financial circumstances, your earnings history, the loan-to-value requested, and the type of property that will secure your loan. Higher rates and fees may be justified depending on the individual circumstances of a particular consumer’s application. You should shop around and compare loan rates and fees.

This particular loan may have a higher rate and total points and fees than other mortgage loans and is, or may be, subject to the additional disclosure and substantive protections under Division 1.7 (commencing with Section 4970) of the Financial Code. You should consider consulting a qualified independent credit counselor or other experienced financial adviser regarding the rate, fees, and provisions of this mortgage loan before you proceed. For information on contacting a qualified credit counselor, ask your lender or call the United States Department of Housing and Urban Development’s counseling hotline at 1-888-995-HOPE (4673) or go to hud4.my.site.com/housingcounseling/ for a list of HUD-approved housing counseling agencies.

You are not required to complete any loan agreement merely because you have received these disclosures or have signed a loan application.

If you proceed with this mortgage loan, you should also remember that you may face serious financial risks if you use this loan to pay off credit card debts and other debts in connection with this transaction and then subsequently incur significant new credit card charges or other debts. If you continue to accumulate debt after this loan is closed and then experience financial difficulties, you could lose your home and any equity you have in it if you do not meet your mortgage loan obligations.

Property taxes and homeowner’s insurance are your responsibility. Not all lenders provide escrow services for these payments. You should ask your lender about these services.

Your payments on existing debts contribute to your credit ratings. You should not accept any advice to ignore your regular payments to your existing creditors.

(2) It shall be a rebuttable presumption that a licensed person has met its obligation to provide this disclosure if the consumer provides the licensed person with a signed acknowledgment of receipt of a copy of the notice set forth in paragraph (1).

(l) (1) A person who originates a covered loan shall not steer, counsel, or direct any prospective consumer to accept a loan product with a risk grade less favorable than the risk grade that the consumer would qualify for based on that person’s then current underwriting guidelines, prudently applied, considering the information available to that person, including the information provided by the consumer.

A person shall not be deemed to have violated this section if the risk grade determination applied to a consumer is reasonably based on the person’s underwriting guidelines if it is an appropriate risk grade category for which the consumer qualifies with the person.

(2) If a broker originates a covered loan, the broker shall not steer, counsel, or direct any prospective consumer to accept a loan product at a higher cost than that for which the consumer could qualify based on the loan products offered by the persons with whom the broker regularly does business.

(m) A person who originates a covered loan shall not avoid, or attempt to avoid, the application of this division by doing the following:

(1) Structuring a loan transaction as an open-end credit plan for the purpose of evading this division if the loan would have been a covered loan if the loan had been structured as a closed-end loan.

(2) Dividing any loan transaction into separate parts for the purpose of evading this division.

(3) Committing mortgage fraud, as defined by Section 532f of the Penal Code.

(n) A person who originates a covered loan shall not act in a manner, whether specifically prohibited by this section or of a different character, that constitutes fraud.

history: (History: Amended by Stats. 2024, Ch. 517, Sec. 1. (AB 3108) Effective January 1, 2025.)

chapter: 2. Prohibited Acts

path: 1.7. COVERED LOANS > 2. Prohibited Acts


citation: FIN § 4974

text:
(a) Any compliance failure that was not willful or intentional and resulted from a bona fide error, that occurred notwithstanding the maintenance of procedures reasonably adopted to avoid those errors, including, but not limited to, those involving clerical, calculation, computer malfunction and programming, and printing errors shall be corrected no later than 45 days after receipt of the complaint or discovery of the error. A person who originates a covered loan shall not be administratively, civilly, or criminally liable for a bona fide error corrected pursuant to this section.

(b) If a person who originates covered loans makes a loan where the person knew of and showed reckless disregard for a violation of this division by a broker, the person and broker shall be jointly and severally liable for all damages awarded under this division with respect to the broker’s unlawful conduct.

This section does not impose or transfer liability for a breach of the broker’s fiduciary duty.

history: (History: Amended by Stats. 2001, Ch. 733, Sec. 3. Effective January 1, 2002. Applicable, by Sec. 10 of Ch. 733, only to covered loans applied for on or after July 1, 2002.)

chapter: 3. Enforcement

path: 1.7. COVERED LOANS > 3. Enforcement


citation: FIN § 4975

text:
(a) (1) Any licensed person who violates any provision of Section 4973, 4979.6, or 4979.7 shall be deemed to have violated that person’s licensing law.

(2) After a knowing and willful violation, the licensing agency may bring a proceeding to suspend the license of the licensed person for not less than six months and not more than three years.

(b) After a knowing and willful violation resulting in a second or subsequent administrative or civil action, the licensing agency may bring a proceeding to permanently revoke the license of the licensed person or impose any lesser licensed sanction for at least three years.

(c) A licensing agency may exercise any and all authority and powers available to it under any other provisions of law, to administer and enforce this division including, but not limited to, investigating and examining the licensed person’s books and records, and charging and collecting the reasonable costs for these activities. The licensing agency shall not charge a licensed person twice for the same service. Any civil, criminal, and administrative authority and remedies available to the licensing agency pursuant to its licensing law may be sought and employed in any combination deemed advisable by the licensing agency to enforce the provisions of this division.

(d) Nothing in this section shall be construed to impair or impede a licensing agency’s authority under any other provision of law.

history: (History: Amended by Stats. 2001, Ch. 733, Sec. 4. Effective January 1, 2002. Applicable, by Sec. 10 of Ch. 733, only to covered loans applied for on or after July 1, 2002.)


citation: FIN § 4977

text:
(a) A licensing agency may, after appropriate notice and opportunity for hearing, by order levy administrative penalties against a person who violates any provision of this division, and the person shall be liable for administrative penalties of not more than two thousand five hundred dollars ($2,500) for each violation. Except for licensing agencies exempt from the provisions of the Administrative Procedure Act, any hearing shall be held in accordance with 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 licensing agency shall have all the powers granted under that act.

(b) Any person who willfully and knowingly violates any provision of this division shall be liable for a civil penalty of not more than twenty-five thousand dollars ($25,000) for each violation which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the licensing agency in any court of competent jurisdiction.

(c) Nothing in this section requires exhaustion of administrative remedies prior to an injured party bringing a civil action.

(d) If the licensing agency determines that it is in the public interest, the licensing agency may include, in any action for penalties authorized by subdivision (b), a claim for relief in addition to the penalties, including a claim for restitution or disgorgement, and the court shall have jurisdiction to award the additional relief.

(e) Nothing in this section shall be construed to impair or impede the Attorney General from representing a licensing agency in bringing an action to enforce this division at the request and on behalf of the licensing agency.

(f) In any action brought by the licensing agency, or the Attorney General acting at the request and on behalf of the licensing agency, under this division in which a judgment against a person is rendered, the licensing agency or the Attorney General shall be entitled to recover costs which, in the discretion of the court, may include an amount representing reasonable attorney’s fees and investigative expenses for services rendered for deposit in the appropriate fund of that licensing agency.

(g) The amounts collected under subdivisions (a) and (b) shall be deposited in the appropriate fund of the licensing agency to be used by that licensing agency, subject to appropriation by the Legislature, for the purposes of education and enforcement in connection with abusive lending practices.

history: (History: Amended by Stats. 2001, Ch. 733, Sec. 5. Effective January 1, 2002. Applicable, by Sec. 10 of Ch. 733, only to covered loans applied for on or after July 1, 2002.)


citation: FIN § 4978

text:
(a) A person who fails to comply with the provisions of this division is civilly liable to the consumer in an amount equal to any actual damages suffered by the consumer, plus attorneys fees and costs. For a willful and knowing violation of this division, the person shall be liable to the consumer in the amount of fifteen thousand dollars ($15,000) or the consumers actual damages, whichever is greater, plus attorneys fees and costs.

(b) (1) If a provision in a contract in a covered loan violates subdivision (a), (b), (c), (d), (e), or (i) of Section 4973, Section 4979.6, or Section 4979.7, that provision is unenforceable. A court in which any action is brought by, or on behalf of, an aggrieved consumer for relief may issue an order or injunction to reform the terms of the covered loan to conform to the provisions of this division.

(2) A court may, in addition to any other remedy, award punitive damages to the consumer upon a finding that such damages are warranted pursuant to Section 3294 of the Civil Code.

(c) Nothing in this section is intended, nor shall be construed, to abrogate existing common law provisions prohibiting double recovery of damages.

history: (History: Amended by Stats. 2001, Ch. 733, Sec. 6. Effective January 1, 2002. Applicable, by Sec. 10 of Ch. 733, only to covered loans applied for on or after July 1, 2002.)


text: A person who originates covered loans shall inform any employee, who originates covered loans on behalf of the person, of the administrative or civil penalties for a violation of this division.

history: (History: Amended by Stats. 2001, Ch. 733, Sec. 7. Effective January 1, 2002. Applicable, by Sec. 10 of Ch. 733, only to covered loans applied for on or after July 1, 2002.)


citation: FIN § 4979

text: Upon request, a person who originates a covered loan shall provide the licensing agency or the consumer, at no cost, documentation regarding his or her loan that clearly demonstrates whether any loan is a covered loan. This documentation shall include, but not be limited to, full disclosure of the original principal balance, the annual percentage rate, and the total points and fees, as defined in Section 4970.

history: (History: Amended by Stats. 2001, Ch. 733, Sec. 8. Effective January 1, 2002. Applicable, by Sec. 10 of Ch. 733, only to covered loans applied for on or after July 1, 2002.)


text:
(a) A person who provides brokerage services to a borrower in a covered loan transaction by soliciting lenders or otherwise negotiating a consumer loan secured by real property, is the fiduciary of the consumer, and any violation of the person’s fiduciary duties shall be a violation of this section. A broker who arranges a covered loan owes this fiduciary duty to the consumer regardless of who else the broker may be acting as an agent for in the course of the loan transaction.

(b) Except for a broker or a person who provides brokerage services, no licensed person or subsequent assignee shall have administrative, civil, or criminal liability for a violation of this section.

history: (History: Added by Stats. 2001, Ch. 732, Sec. 1. Effective January 1, 2002. Applicable, by Sec. 3 of Ch. 732, to consumer loans applied for on or after July 1, 2002.)


text: A person who originates a covered loan shall not make a covered loan that finances points and fees in excess of one thousand dollars ($1,000) or 6 percent of the original principal balance, exclusive of points and fees, whichever is greater.


text: On or after July 1, 2002, a person who originates a consumer loan shall not finance, directly or indirectly, into a consumer loan or finance to the same borrower within 30 days of a consumer loan any credit life, credit disability, credit property, or credit unemployment insurance premiums, or any debt cancellation or suspension agreement fees, provided that credit insurance premiums, debt cancellation, or suspension fees calculated and paid on a monthly basis shall not be considered financed by the person originating the loan. For purposes of this section, credit insurance does not include a contract issued by a government agency or private mortgage insurance company to insure the lender against loss caused by a mortgagor’s default.

history: (History: Amended by Stats. 2001, Ch. 733, Sec. 9. Effective January 1, 2002. Applicable, by Sec. 10 of Ch. 733, only to covered loans applied for on or after July 1, 2002.)


text: The provisions of this division shall not impose liability on an assignee that is a holder in due course. The provisions of this division shall not apply to persons chartered by Congress to engage in secondary mortgage market transactions.


citation: FIN § 4981

text:
Any financial institution doing business in this state, or any other person, that sells to the public at any retail branch office at which deposits are accepted, any security which is not a deposit, and which is not insured by an agency or instrumentality of the United States, or a private share insurance or guaranty arrangement, shall provide the customer a disclosure statement as defined in subdivision (a).

(a) For the purposes of this section:

(1) “Disclosure statement” means, in addition to any other disclosure required by law, a disclosure in writing, in accordance with subdivision (b), provided to a customer each time the customer purchases securities from an employee or any other person in a retail branch office.

(2) “Financial institution” means a depository institution, the deposits of which are insured by a federal deposit insurance agency or instrumentality, or a private share insurance or guaranty arrangement, including, but not limited to, banks, savings banks, savings associations, credit unions, and industrial loan companies.

(3) “Security” means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, or any other security within the meaning of Section 25019 of the Corporations Code.

(4) “Public” means individuals and includes members of a credit union. “Public” does not include institutional investors as set forth in subdivision (i) of Section 25102 of the Corporations Code.

(5) “Retail branch office” means only that part of a financial institution’s premises open to the public for purposes of accepting insured deposits.

(6) “Deposit” includes shares of credit unions and investment certificates of industrial loan companies.

(b) Any disclosure statement provided pursuant to this section shall contain a sentence in at least 10-point bold type to the effect that: “I understand that the product or products I am purchasing or may purchase are not deposits and may not be insured by an agency or instrumentality of the United States such as the Federal Deposit Insurance Corporation (FDIC).” For credit unions, the disclosure statement provided pursuant to this section shall contain a sentence in at least 10-point bold type to the effect that: “I understand that the product or products I am purchasing or may purchase are not deposits and may not be insured by an agency of the United States such as National Credit Union Share Insurance Fund (NCUSIF), or a private share insurance or guaranty arrangement.” With respect to agreements for the purchase of securities executed by a customer at a retail branch office of the institution which accepts deposits, a customer shall be required to acknowledge in writing that he or she has received and read this statement.

(c) Notwithstanding the provisions of subdivision (b), in the case of account relationships opened, or securities sold, by telephone or electronic order, the requirements of this section are met if the disclosure statement is provided at the time the new account documents are sent to the customer.

(d) The provisions of this section shall not apply to sales of securities or contracts entered into for the purchase of securities prior to January 1, 1991.

history: (History: Added by Stats. 1990, Ch. 1545, Sec. 1.)

division: 1.8. SECURITIES SALES

path: 1.8. SECURITIES SALES


citation: FIN § 4982

text: Any violation of this division by a bank is a violation of Division 1.1 (commencing with Section 1000); a violation by a savings association is a violation of Division 2 (commencing with Section 5000); a violation by a credit union is a violation of Division 5 (commencing with Section 14000); and a violation by an industrial loan company is a violation of Division 7 (commencing with Section 18000).

history: (History: Amended by Stats. 2013, Ch. 334, Sec. 63. (SB 537) Effective January 1, 2014.)


citation: FIN § 4983

text: Nothing in this division shall be construed or interpreted to mean that this division in any way gives a financial institution the authority to offer or sell any type of security that it could not otherwise offer or sell under state or federal law.


citation: FIN § 4990

text:
(a) Any person convicted of a felony violation of any of the provisions specified in subdivision (b) shall not serve in any capacity as a director or officer or in any other position involving any management duties with a financial institution in this state with accounts insured by an agency or instrumentality of the United States or a private share insurance or guaranty arrangement. This subdivision does not, however, apply to any director or officer of a financial institution, or to persons serving in managerial positions for financial institutions, whose office or employment with a financial institution commenced, and whose felony conviction occurred, prior to January 1, 1991.

(b) Subdivision (a) applies to felony convictions of offenses specified in Chapter 10 (commencing with Section 1320) of Division 1.1, Article 4 (commencing with Section 5300) of Chapter 1 of Division 2, Article 8 (commencing with Section 14750) of Chapter 4 of Division 5, and Chapter 6 (commencing with Section 18435) of Division 7. Subdivision (a) also applies to felony convictions of offenses specified in provisions of the laws of the United States added or amended by the federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Public Law 101-73).

(c) On and after January 1, 1991, any person who seeks employment by, or a controlling interest in, a financial institution specified in subdivision (a) shall, as a condition to obtaining that employment or controlling interest, permit the financial institution, its regulatory agency, or both to have access to that person’s state summary criminal history information, as defined in Section 11105 of the Penal Code, for purposes of determining whether the person has a prior conviction of a felony offense specified in subdivision (b) or any theft offense.

(d) Any state summary criminal history information obtained pursuant to this subdivision shall be kept confidential and no recipient under this subdivision shall disclose the contents other than for the purpose of determining eligibility for employment by, or acquisition of a controlling interest in, a financial institution specified in subdivision (a).

(e) The authority granted by this section to the commissioner and other regulatory agencies shall be in addition to any other authority granted by law to obtain information about the background of any person. Nothing in this section shall be construed to limit any authority of the commissioner or any regulatory agency otherwise provided by law.

history: (History: Amended by Stats. 2013, Ch. 334, Sec. 64. (SB 537) Effective January 1, 2014.)

division: 1.9. PERSONS CONNECTED WITH FINANCIAL INSTITUTIONS


citation: FIN § 4991

text:
(a) In response to a request by another bank, savings association, credit union, or any other financial institution it is not unlawful for a bank, savings association, credit union, or any other financial institution to provide a written employment reference which advises of the applicants’ involvement in a theft, embezzlement, misappropriation, or other defalcation which has been reported to state or federal authorities pursuant to state or federal banking or financial institutions law. In order for the immunity provided in subdivision (b) to apply, a copy of the written employment reference shall be sent concurrently by the financial institution providing the reference, to the last known address of the person concerning whom the reference is provided.

(b) No bank, savings association, credit union, or any other financial institution shall be civilly liable for providing an employment reference as specified in subdivision (a), unless the information provided is false and the bank, savings association, credit union, or other financial institution providing the false information does so with knowledge and malice.

history: (History: Added by Stats. 1990, Ch. 947, Sec. 2.)

path: 1.9. PERSONS CONNECTED WITH FINANCIAL INSTITUTIONS


citation: FIN § 4995

text:
The following definitions shall apply for purposes of this division:

(a) “Higher-priced mortgage loan” has the meaning set forth in Section 1026.35 of Title 12 of the Code of Federal Regulations.

(b) “Licensed person” means a real estate broker licensed under the Real Estate Law (Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code), a finance lender or broker licensed under the California Financing Law (Division 9 (commencing with Section 22000)), a residential mortgage lender licensed under the California Residential Mortgage Lending Act (Division 20 (commencing with Section 50000)), a commercial or industrial bank organized under the Banking Law (Division 1.1 (commencing with Section 1000)), a savings association organized under the Savings Association Law (Division 2 (commencing with Section 5000)), and a credit union organized under the California Credit Union Law (Division 5 (commencing with Section 14000)).

(c) “Mortgage broker” means a licensed person who provides mortgage brokerage services. For purposes of this division, a licensed person who makes home loans is a “mortgage broker,” and subject to the requirements of this division applicable to mortgage brokers, only with respect to transactions in which the licensed person provides mortgage brokerage services.

(d) “Mortgage brokerage services” means arranging or attempting to arrange, as exclusive agent for the borrower or as dual agent for the borrower and lender, for compensation or in expectation of compensation, paid directly or indirectly, a higher-priced mortgage loan made by an unaffiliated third party.

history: (History: Amended by Stats. 2019, Ch. 143, Sec. 57. (SB 251) Effective January 1, 2020.)

division: 1.10. HIGHER-PRICED MORTGAGE LOANS

path: 1.10. HIGHER-PRICED MORTGAGE LOANS


text: Notwithstanding any other provision of law, the maximum amount of a prepayment penalty that may be imposed by a licensed person in connection with a higher-priced mortgage loan shall not exceed 2 percent of the principal balance prepaid, for prepayment of the loan during the first 12 months following loan consummation or 1 percent of the principal balance prepaid, for prepayment of the loan during the second 12 months following loan consummation.

history: (History: Added by Stats. 2009, Ch. 629, Sec. 4. (AB 260) Effective January 1, 2010.)


text:
(a) This division shall apply to any licensed person who in bad faith attempts to avoid the application of this division by doing either of the following:

(1) Dividing any loan transaction into separate parts for the purpose and with the intent of evading the provisions of this division.

(2) Any other subterfuge.

(b) Notwithstanding any other provision of law, a licensed person shall not make, or cause to be made, any false, deceptive, or misleading statement or representation in connection with a higher-priced mortgage loan.

(c) A mortgage broker who arranges only higher-priced mortgage loans shall disclose that fact to a borrower, both orally and in writing, at the time of initially engaging in mortgage brokerage services with that borrower.

(d) A mortgage broker who provides mortgage brokerage services shall not steer, counsel, or direct a borrower to accept a loan at a higher cost than that for which the borrower could qualify based upon the loans offered by the persons with whom the broker regularly does business.

(e) (1) A mortgage broker who provides mortgage brokerage services for a borrower shall not receive compensation, including a yield spread premium, fee, commission, or any other compensation, for arranging a higher-priced mortgage loan with a prepayment penalty that exceeds the compensation that the mortgage broker would otherwise receive for arranging that higher-priced mortgage loan without a prepayment penalty.

(2) When providing mortgage brokerage services for a borrower, a mortgage broker shall receive the same compensation for providing those services whether paid by the lender, borrower, or a third party.

(f) No licensed person shall recommend or encourage default on an existing loan or other debt prior to and in connection with the closing or planned closing of a higher-priced mortgage loan that refinances all or any portion of the existing loan or debt.

(g) A licensed person shall not make a higher-priced mortgage loan that contains a provision for negative amortization. This subdivision shall not preclude a licensed person from entering into a subsequent agreement with a borrower to capitalize payments as a means of permitting a borrower to cure or prevent a delinquency.(h) A licensed person who makes a higher-priced mortgage loan and who, when acting in good faith, fails to comply with this section, shall not be liable if the licensed person establishes either of the following:

(1) Within 90 days of the loan closing and prior to the institution of any action against the licensed person under this section, the licensed person did all of the following:

(A) Notified the borrower of the compliance failure.

(B) Tendered appropriate restitution.

(C) Offered, at the borrower’s option, either to make the higher-priced mortgage loan comply with the requirements of this division or change the terms of the loan in a manner beneficial to the borrower so that the loan will no longer be considered a higher-priced mortgage loan subject to the provisions of this division.

(D) Within a reasonable period of time following the borrower’s election of remedies, took appropriate action based on the borrower’s choice.

(2) (A) The compliance failure was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid those errors, and within 120 days after receipt of a complaint or the discovery of the compliance failure or the licensed person’s receipt of written notice of the compliance failure, the licensed person did all of the following:

(i) Notified the borrower of the compliance failure.

(ii) Tendered appropriate restitution.

(iii) Offered, at the borrower’s option, either to make the higher-priced mortgage loan comply with the requirements of this division or change the terms of the loan in a manner beneficial to the borrower so that the loan will no longer be considered a higher-priced mortgage loan subject to the provisions of this division.

(iv) Within a reasonable period of time following the borrower’s election of remedies, took appropriate action based on the borrower’s choice.

(B) For purposes of this subdivision, examples of a bona fide error include clerical, calculation, computer malfunction and programming, and printing errors.


text:
(a) Any licensed person who violates any provision of this division shall be deemed to have violated that person’s licensing law.

(b) The licensing agency may, by order and after appropriate administrative hearing, prohibit licensees under this division from engaging in acts or practices in connection with higher-priced mortgage loans that the licensing agency finds to be unfair, deceptive, or designed to evade laws of this state.(c) A violation of Section 2923.1 of the Civil Code in connection with a higher-priced mortgage loan is a violation of this division.

(d) A violation of the provisions of Part 226 of Title 12 of the Code of Federal Regulations, relating to prepayment penalties in connection with higher-priced mortgage loans, is a violation of this division.

(e) The provisions of this division may be enforced only by the Attorney General or the licensed person’s licensing agency. Any licensed person who willfully and knowingly violates any provision of this division shall be liable for a civil penalty of not more than ten thousand dollars ($10,000) for each violation.(f) A prepayment penalty or yield spread premium provision of a higher-priced mortgage loan that violates this division shall be unenforceable.


text: The provisions of this division shall apply to higher-priced mortgage loans originated on or after July 1, 2010.


text: The provisions of this division are severable. If any provision of this division or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.


text: Nothing in this division shall be construed to affect any other rights or remedies otherwise available under the law.


citation: FIN § 5000

text: This division may be cited as the “Savings Association Law.”

history: (History: Repealed and added by Stats. 1983, Ch. 1091, Sec. 2.)

division: 2. SAVINGS ASSOCIATION LAW

article: 1. Short Title

path: 2. SAVINGS ASSOCIATION LAW > 1. Short Title, General Definitions, and General Provisions > 1. Short Title


citation: FIN § 5100

text: When used in this division, the words and phrases set forth in this article shall have the meanings given in this article unless the context requires another meaning.

history: (History: Added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 2. General Definitions

path: 2. SAVINGS ASSOCIATION LAW > 1. Short Title, General Definitions, and General Provisions > 2. General Definitions


text:
For purposes of this division:

(a) Any reference to regulations of the federal Office of the Comptroller of the Currency or the Federal Deposit Insurance Corporation shall also be deemed to include and refer to regulations adopted by the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation, to the extent these regulations have been continued in effect and made enforceable by the Office of the Comptroller of the Currency or Federal Deposit Insurance Corporation, respectively, pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Public Law 101-73).

(b) Any reference to charters issued by the Office of the Comptroller of the Currency shall also be deemed to include and refer to charters issued by the Federal Home Loan Bank Board.

history: (History: Amended by Stats. 2016, Ch. 277, Sec. 9. (AB 2907) Effective January 1, 2017.)

chapter: 1. Short Title, General Definitions, and General Provisions

article: 2. General Definitions


text:
“Affiliated person” of a savings association means the following:

(a) A director, officer, or controlling person of the savings association.

(b) A spouse of a director, officer, controlling person of the savings association.

(c) A member of the immediate family of a director, officer, or controlling person of the savings association, who has the same home as that person or who is a director or officer of any subsidiary of the savings association or of any holding company affiliate of the savings association.

(d) Any corporation or organization other than the savings association or a corporation or organization through which the savings association operates, of which a director, officer or controlling person of the savings association meets any of the following criteria:

(1) Is chief executive officer, chief financial officer, or a person performing similar functions.

(2) Is a general partner.

(3) Is a limited partner who, directly or indirectly either alone or with his spouse and the members of his immediate family who are also affiliated persons of the savings association, owns an interest of 10 percent or more in the partnership (based on the value of his contribution) or who, directly or indirectly with other directors, officers, and controlling persons of the savings association and their spouses and their immediate family members who are also affiliated persons of the savings association owns an interest of 25 percent or more in the partnership.

(4) Directly or indirectly either alone or with his or her spouse and the members of his or her immediate family who are also affiliated persons of the savings association, owns or controls 10 percent or more of any class of equity securities or owns or controls, with other directors, officers, and controlling persons of the savings association and their spouses and their immediate family members who are also affiliated persons of the savings association, 25 percent or more of any class of equity securities.

(e) Any trust or other estate in which a director, officer, or controlling person of the savings association or the spouse of the person has a substantial beneficial interest or as to which the person or his or her spouse serves as trustee or in a similar fiduciary capacity.

history: (History: Repealed and added by Stats. 1990, Ch. 1118, Sec. 3.)

article: 2. General Definitions


text:
“Affiliate” of a savings association, unless otherwise defined, includes any corporation, business trust, unincorporated association or other similar organization which meets the criteria of subdivision (a), (b), or (c), as follows:

(a) The savings association directly or indirectly, owns or controls either a majority of the voting shares or more than 50 per centum of the number of shares voted for the election of its directors, trustees, or other persons exercising similar functions at the preceding election, or controls in any manner the election of a majority of its directors, trustees, or other persons exercising similar functions.

(b) Control thereof is held, directly or indirectly through stock ownership or in any other manner, by the shareholders of a savings association who own or control either a majority of the shares of the savings association or more than 50 per centum of the number of shares voted for the election of directors of that savings association at the preceding election, or by trustees for the benefit of the shareholders of any savings association.

(c) A majority of its directors, trustees, or other persons exercising similar functions are directors of any one savings association.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 4.)

article: 2. General Definitions


text: “Controlling person” of a savings association means any person or entity which (a) either directly or indirectly or acting in concert with one or more other persons or entities, owns, controls, or holds with power to vote, or holds proxies representing, 10 percent or more of the voting shares or rights of the association or (b) controls in any manner the election or appointment of a majority of the directors of the association. However, a director of a savings association shall not be deemed to be a controlling person of the association based upon his or her voting, or acting in concert with other directors in voting, proxies (a) obtained in connection with an annual solicitation of proxies or (b) obtained from savings account holders and borrowers if the proxies are voted as directed by a majority vote of the entire board of directors of that association, or of a committee of those directors if the committee’s composition and authority are controlled by a majority vote of the entire board and if its authority is revocable by such a majority.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 5.)

article: 2. General Definitions


text:
“Immediate family” of any natural person means any of the following (whether by the full or half blood or by adoption):

(a) The person’s spouse, father, mother, children, brothers, sisters, and grandchildren.

(b) The father, mother, brothers, and sisters of the person’s spouse.

(c) The spouse of a child, brother, or sister of the person.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 6.)

article: 2. General Definitions


text:
“Institution-affiliated party” means any of the following:

(a) Any director, officer, employee or controlling stockholder of, or agent for, a savings association.

(b) Any person who has filed or is required to file an application to become a savings and loan holding company with the commissioner pursuant to Section 5801.

(c) Any shareholder, consultant, joint venture partner, and any other person as determined by the commissioner (by regulation or case-by-case) who participates in the conduct of the affairs of a savings association.

(d) Any independent contractor (including any attorney, appraiser, or accountant) who knowingly or recklessly participates in any of the following which caused or is likely to cause more than a minimal financial loss to, or a significant adverse effect on, the savings association:

(1) Any violation of law or regulation.

(2) Any breach of fiduciary duty.

(3) Any unsafe or unsound practice.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 7.)

article: 2. General Definitions


citation: FIN § 5101

text: “Approved by the members,” in the case of a mutual association, means approved by a majority of all votes cast at a duly held regular or special meeting or by the written consent (including consents by proxy) of a majority of the total votes of members outstanding at the close of business on the next business day prior to the date that the requisite written consents have been filed with the association.

article: 2. General Definitions


citation: FIN § 5102

text:
(a) “Association” or “savings association” means a mutual or stock savings association, savings and loan association or savings bank subject to the provisions of this division, but excluding a federal association.

(b) “Federal association” means a savings and loan association or federal savings bank that is chartered by the Office of Thrift Supervision under Section 5 of the Home Owners’ Loan Act of 1933 (12 U.S.C. Sec. 1464), as amended.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 8.)

article: 2. General Definitions


citation: FIN § 5103

text:
“Certificate of authority” means:

(a) A certificate of authority to transact the business of an association, which is issued by the commissioner pursuant to this division.

(b) An uncanceled annual license issued to an association under prior law which is valid on the effective date of this division.

article: 2. General Definitions


text: “Commercial paper” means any note, draft, or bill of exchange which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited.

history: (History: Added by Stats. 1984, Ch. 225, Sec. 1. Effective June 21, 1984.)

article: 2. General Definitions


citation: FIN § 5104

text: “Commissioner” means the Commissioner of Financial Protection and Innovation.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 108. (SB 1498) Effective January 1, 2023.)

article: 2. General Definitions


citation: FIN § 5105

text: “Community” means a centralized area or locality in which a body of inhabitants is gathered in one group having common residential, social, or business interests. The term does not necessarily mean a municipal corporation or other political subdivision. A community need not be limited by lines and boundaries. A city, village, town, or other governmental unit, either incorporated or unincorporated, may constitute one community, but a large, populous area under one or more forms of government may be composed of several communities.

article: 2. General Definitions


text: “Consumer loan” means a loan for personal, family, or household purposes, and loans reasonably incident thereto, and may be made as either open-end or closed-end consumer credit, but does not include credit extended in connection with credit cards or bona fide overdraft loans.

history: (History: Added by Stats. 1984, Ch. 225, Sec. 2. Effective June 21, 1984.)

article: 2. General Definitions


text: “Corporate debt security” means a marketable obligation, evidencing the indebtedness of any corporation in the form of a bond, note, or debenture, or both note and debenture, which is commonly regarded as a debt security and is not predominantly speculative in nature. A security is marketable if it may be sold with reasonable promptness at a price which corresponds reasonably to its fair value.

history: (History: Added by Stats. 1984, Ch. 225, Sec. 3. Effective June 21, 1984.)

article: 2. General Definitions


citation: FIN § 5106

text: “Department” means the Department of Financial Protection and Innovation.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 109. (SB 1498) Effective January 1, 2023.)

article: 2. General Definitions


citation: FIN § 5107

text: “Financial institution” means a thrift institution, commercial bank, or trust company.

article: 2. General Definitions


citation: FIN § 5108

text: “Impaired condition” means a condition in which the assets of an association in the aggregate do not have a value, as determined in accordance with generally accepted accounting principles, equal to or greater than the aggregate amount of liabilities of the association to its creditors, including the holders of its savings accounts and all other persons who are creditors.

article: 2. General Definitions


citation: FIN § 5109

text: “Mutual association” means an association for which the articles of incorporation do not authorize the issuance of capital stock.

article: 2. General Definitions


citation: FIN § 5110

text: “Member” means a person holding a savings account of a mutual association. A joint and survivorship or other multiple owner constitutes a single membership.

article: 2. General Definitions


citation: FIN § 5111

text: “Mutual capital certificate” means a certificate evidencing an investment in a mutual association and issued pursuant to provisions of this division.

article: 2. General Definitions


citation: FIN § 5112

text: “Net worth certificate” means a certificate issued by an association in accordance with Section 13i of the Federal Deposit Insurance Act, as amended (12 U.S.C., Sec. 1823i) and regulations promulgated thereunder by the Federal Deposit Insurance Corporation.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 8.5.)

article: 2. General Definitions


citation: FIN § 5113

text: “Person” means any individual, domestic, or foreign corporation, entity, voting trust, business trust, partnership, limited liability company, association, syndicate, organized group of persons, or similar organization, group or entity, whether incorporated or not.

history: (History: Amended by Stats. 1994, Ch. 1010, Sec. 113. Effective January 1, 1995.)

article: 2. General Definitions


citation: FIN § 5114

text:
“Primarily residential property” means real estate on which there is located, or will be located pursuant to a real estate loan, any of the following:

(a) A structure or structures designed or used primarily for residential rather than nonresidential purposes and consisting of more than one dwelling unit.

(b) A structure or structures designed or used primarily for residential rather than nonresidential purposes for students, residents, and persons under the care of, or the employees or members of the staff of, an educational, health, or welfare institution or facility.

(c) A structure or structures that are used in part for residential purposes for not more than one family and in part for business purposes if the residential use of the structure or structures is substantial and permanent and not merely transitory.

article: 2. General Definitions


text: “Residential real estate” means any improved real property that is used or intended to be used as a residence and contains not more than four dwelling units.

history: (History: Added by Stats. 1985, Ch. 983, Sec. 1.5. Effective September 26, 1985.)

article: 2. General Definitions


citation: FIN § 5115

text:
“Real estate loan” means a loan or other obligation secured by a lien on real estate, if:

(a) The security property is real estate as defined pursuant to Section 658 of the Civil Code.

(b) The security interest of the association may be enforced as a real estate mortgage, deed of trust, or its equivalent.

(c) The security property is capable of separate appraisal.

(d) The association relies substantially upon the real estate as primary security for the loan.

(e) With regard to security property which is a leasehold or other interest for a period of years, the term of interest extends, or is subject to extension or renewal at the option of the association, for a term of at least five years following maturity of the loan.

history: (History: Amended by Stats. 1984, Ch. 225, Sec. 4. Effective June 21, 1984.)

article: 2. General Definitions


citation: FIN § 5116

text: “Savings account” means that part of the savings liability of an association that is credited to the holder of the account. A savings account may be referred to as a deposit. For the purposes of Sections 6661, 6662, and 6663 and Article 4 (commencing with Section 6725) through Article 10 (commencing with Section 7000), inclusive, of Chapter 5 of this division, the term “savings account” includes shares, demand accounts, savings deposits and other savings accounts of federal associations.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 1.7. Effective September 26, 1985.)

article: 2. General Definitions


citation: FIN § 5117

text: “Savings bank” means a savings bank organized under this division.

history: (History: Added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 2. General Definitions


text: “Savings institution” means a financial institution as defined in Section 5102.

history: (History: Added by Stats. 1984, Ch. 868, Sec. 2.5.)

article: 2. General Definitions


citation: FIN § 5118

text: “Savings liability” means the aggregate amount of savings accounts of depositors, including interest credited to the accounts, less redemptions and withdrawals.

article: 2. General Definitions


citation: FIN § 5119

text: “Service corporation” means a corporation, other than a wholly owned subsidiary referred to in Section 7300 or a wholly owned subsidiary doing business as a finance subsidiary in accordance with the requirements of 12 C.F.R. 563.132, in which at least 80 percent of the shares of stock having voting power are owned by one or more associations or federal associations. As used in this section “voting power” shall have the same meaning as defined in Section 194.5 of the Corporations Code.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 8.6.)

article: 2. General Definitions


citation: FIN § 5120

text:
“Statutory net worth” or “net worth” means the sum of the following:

(a) Issued and outstanding capital stock.

(b) Issued and outstanding capital certificates.

(c) Paid-in surplus.

(d) Retained earnings.

(e) Pledged savings accounts of a mutual association with the approval of the commissioner.

(f) General reserves and other amounts as the commissioner prescribes.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 1.76. Effective September 26, 1985.)

article: 2. General Definitions


citation: FIN § 5121

text: “Stock association” means an association for which the articles of incorporation authorize the issuance of capital stock.

article: 2. General Definitions


citation: FIN § 5122

text: “Stockholder” means the holder of one or more shares of any class of capital stock of a capital stock association which is organized and operating pursuant to the provisions of this division.

article: 2. General Definitions


citation: FIN § 5123

text: “Thrift institution” means an association, a cooperative bank, a homestead association, a building and loan association, a federal association, a federal savings bank, a state or federal credit union, an industrial loan company, and a supervised thrift and residential financing institution of a substantially similar nature.

article: 2. General Definitions


citation: FIN § 5124

text: “Withdrawal value” means the amount credited to a savings account less lawful deductions, as shown by the records of the association.

article: 2. General Definitions


citation: FIN § 5203

text:
(a) The name, rights, powers, privileges, and immunities of each association in existence on the effective date of this division shall be governed by the provisions of this division to the same extent and effect as if the association had been incorporated pursuant to this division. The articles of incorporation and bylaws of an association existing on the effective date of this division may be amended to conform to the provisions of this division, with or without the issuance or approval by the commissioner of conformed copies of those documents, and the provisions in the articles and bylaws are superseded to the extent that they are inconsistent with the provisions of this division, except that the obligations of the existing association between the association and its stockholders, members, or any valid contract between the stockholders or members of the association or between the association and any other persons, existing at the time this division takes effect, shall not be impaired by the provisions of this division. With these exceptions, each association in existence on the effective date of this division shall possess all the rights, powers, privileges, and immunities and shall be subject to all the duties, liabilities, disabilities, and restrictions conferred and imposed by this division, notwithstanding anything to the contrary in its articles of incorporation, bylaws, or rules.

(b) The power of each association in existence on the effective date of this division pursuant to its articles of incorporation or bylaws to issue voting interests to savings account holders, shall not be impaired by any provision of this division.

history: (History: Repealed and added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 3. General Provisions

path: 2. SAVINGS ASSOCIATION LAW > 1. Short Title, General Definitions, and General Provisions > 3. General Provisions


citation: FIN § 5204

text:
(a) Wherever it is stated in this division that an agreement or contract contrary to any of the division’s provisions is void, the statement is limited to the particular portion of the agreement or contract that is contrary to the provision, and the entire agreement or contract is not void unless the particular part is not a separable portion.

Unless expressly so provided by the commissioner, the violation of any provision of this division does not render invalid any agreement, contract, stock, savings account, note, trust deed, mortgage, or other instrument.

(b) No provision of this division imposing any liability, either civil or criminal, applies to any act done or omitted in good faith in conformity with any rule, regulation, approval, consent, order, direction, or other act of the commissioner, even if the rule, regulation, approval, consent, order, direction, or other act of the commissioner is amended, rescinded, or determined invalid by judicial or other authority, after the act or omission.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 1.78. Effective September 26, 1985.)

article: 3. General Provisions


citation: FIN § 5205

text: Whenever the term “ association” is used in any provision of law, such term shall be deemed to include savings banks organized under this division; and wherever the term “federal association” is so used, such term shall be deemed to include federal savings banks.

article: 3. General Provisions


text:
(a) All references in this division to financial statements, balance sheets, income statements, and statements of changes in financial position of an association and all references to assets, liabilities, earnings, retained earnings, shareholders’ equity, and similar accounting items of an association, mean financial statements or items prepared or determined in conformity with generally accepted accounting principles then applicable which fairly present in conformity with generally accepted accounting principles the matters that they purport to present, subject to any specific accounting treatment required or permitted by any provision of this division, or by any regulation or order issued under this division.

(b) The commissioner may, by regulation or order, require any financial statement or accounting item of an association to be prepared or determined in a manner other than in conformity with generally accepted accounting principles if it is found that the other manner of preparation or determination is necessary or appropriate to carry out the purposes or provisions of this division. A report utilizing accounting methods required pursuant to the provisions of this subdivision shall not be available for other than purposes as provided by the commissioner.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 1.8. Effective September 26, 1985.)

article: 3. General Provisions


citation: FIN § 5206

text: Whenever the terms “board of directors,” “directors,” or “director” are used in any provision of law, such terms shall mean, with respect to savings banks organized under this division, “board of trustees,” “trustees,” or “trustee.”

history: (History: Amended by Stats. 1984, Ch. 868, Sec. 3.5.)

article: 3. General Provisions


citation: FIN § 5207

text: If any provision, clause, or phrase of this division or application to any person or circumstance is held invalid, its invalidity shall not affect other provisions or applications of this division that can be given effect without the invalid provisions or application, and to this end, the provisions of this division are separable.

article: 3. General Provisions


citation: FIN § 5208

text: This division, being a comprehensive coverage of its subject matter, shall not be deemed to be impliedly repealed, in whole or in part, by subsequent legislation not specifically repealing it, if that construction can be avoided.

article: 3. General Provisions


citation: FIN § 5209

text: Insofar as the provisions of this division are inconsistent with any other law in effect at the time the provisions of this division are enacted, the provisions of this division shall control. Except as provided in subdivision (a) of Section 6500, nothing within this section is intended to provide for preemption of other provisions of law expressly overruling the provisions of this division and enacted subsequent to the effective date of the inconsistent provision within this division.

article: 3. General Provisions


citation: FIN § 5300

text: Every person who willfully violates or willfully fails to comply with any of the provisions of this division is guilty of a public offense. Except where the offense is declared to be a felony or a misdemeanor or a different punishment is prescribed, a person convicted under this section shall be punished by a fine of not more than ten thousand dollars ($10,000), or by imprisonment in the county jail not exceeding one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 100. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

article: 4. Penalties

path: 2. SAVINGS ASSOCIATION LAW > 1. Short Title, General Definitions, and General Provisions > 4. Penalties


citation: FIN § 5301

text:
(a) The commissioner may refer such evidence as is available concerning any violation of this division or of any regulation, order issued by the commissioner, or of any condition imposed in writing by the commissioner in connection with any grant of any application or request by the savings association or of a written agreement between the savings association and the commissioner to the Attorney General or to the district attorney of the county in which the violation occurred, who may, with or without such a referral, institute appropriate civil or criminal proceedings under this division.

(b) The commissioner and his or her counsel, deputies, or assistants may, upon request of the Attorney General or district attorney, assist the Attorney General or district attorney in presenting law or facts at any trial in these proceedings.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 11.)

article: 4. Penalties


citation: FIN § 5302

text:
(a) Whoever knowingly violates subdivision (a) or (b) of Section 6525.5 shall be punished by a fine of not more than one million dollars ($1,000,000) for each day the violation continues, by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for 2, 3, or 4 years, or by both that fine and imprisonment.

(b) Any person who is subject to an order issued pursuant to Section 8201 who knowingly violates the order, directly or indirectly, shall be punished by a fine of not more than one million dollars ($1,000,000) for each day violation continues, by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for 2, 3, or 4 years, or by both that fine and imprisonment.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 101. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

article: 4. Penalties


citation: FIN § 5303

text: Any officer, director, employee, or agent of any association who (a) willfully makes or knowingly concurs in the making or publishing of a false or untrue material entry in any book, record, report, statement concerning the business or affairs of the association, or statement of condition or in connection with any transaction of the association, with intent to deceive any officer or director thereof, or with intent to deceive any agency or examiner, whether private or public, employed or lawfully appointed to examine into the association’s condition or to examine into any of the association’s affairs or transactions, or with intent to deceive any public officer, office, or board to which the association is required by law to report or that has authority by law to examine into the association’s affairs or transactions, (b) with like intent, willfully omits to make a material new entry of any matter particularly pertaining to the business, property, condition, affairs, transactions, assets, or accounts of the association in any appropriate book, record, report, or statement of the association, which entry is required to be made by law or generally accepted accounting principles applicable to a savings institution, or (c) with like intent, willfully alters, abstracts, conceals, refuses to allow to be inspected by the commissioner or the commissioner’s deputies or examiners, or destroys any books, records, reports, or statements of the association made, written, or kept, or required to be made, written, or kept by him or her or under his or her direction, shall be punished by a fine of not more than one million dollars ($1,000,000), by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or four years, or by both that fine and imprisonment.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 102. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

article: 4. Penalties


citation: FIN § 5304

text:
(a) It is unlawful for any person to corruptly give, offer, or promise anything of value to any other person, with intent to influence or reward any institution-affiliated party in connection with any business or transaction of a savings association.

(b) It is unlawful for any institution-affiliated party to corruptly solicit or demand for the benefit of any person, or corruptly accept or agree to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business or transaction of the savings association.

(c) Any person who violates subdivision (a) or (b) shall be punished by a fine of not more than one million dollars ($1,000,000) or three times the value of the thing given, offered, promised, solicited, demanded, accepted, or agreed to be accepted, whichever is greater, by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for 2, 3, or 4 years, or by both that fine and imprisonment. However, if the value of the thing given, offered, promised, solicited, demanded, accepted, or agreed to be accepted does not exceed one thousand dollars ($1,000), the offense shall instead be punishable by a fine of not more than one thousand dollars ($1,000), by imprisonment in a county jail for not more than one year, or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment.

(d) This section does not apply to bona fide salary, wages, fees, or other compensation paid, or expenses paid or reimbursed, in the usual course of business or where the amount of money or monetary worth of the thing of value is one hundred dollars ($100) or less.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 103. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

article: 4. Penalties


citation: FIN § 5305

text: Any institution-affiliated party who abstracts or willfully misapplies any of the money, funds, or property of the savings association, or willfully misapplies its credit, is guilty of a felony and shall be punished by a fine of not more than one million dollars ($1,000,000), by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for 2, 3, or 4 years, or by both that fine and imprisonment. However, if the amount abstracted or willfully misapplied does not exceed two hundred fifty dollars ($250), the offense shall instead be punishable by a fine of not more than one thousand dollars ($1,000), by imprisonment in a county jail for not more than one year, or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 104. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

article: 4. Penalties


citation: FIN § 5306

text: Any institution-affiliated party who knowingly executes, or attempts to execute, a scheme or artifice to defraud a savings association or to obtain any of the moneys, funds, credits, assets, securities or other property owned by or under the custody or control of a savings association by means of false or fraudulent pretenses, representations, or promises, shall be punished by a fine of not more than one million dollars ($1,000,000), by imprisonment in state prison for 2, 3, or 4 years, or by both that fine and imprisonment.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 18.)

article: 4. Penalties


citation: FIN § 5307

text: Whoever willfully and knowingly makes, issues, circulates, transmits, or causes or knowingly permits to be made, issued, circulated, or transmitted, any statement or rumor which is written, printed, reproduced in any manner, or communicated by word of mouth, that is untrue in fact and is directly or by inference false, or malicious in that it is calculated to injure the reputation or business, financial condition, or standing of any association shall be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail not exceeding one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 105. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

article: 4. Penalties


citation: FIN § 5308

text: Whoever knowingly makes or causes to be made, directly or indirectly, or through any agency whatsoever, any false statement or report, or willfully overvalues any land, property, or security, for the purpose of influencing in any way the action of any association upon any application, advance, discount, purchase or repurchase agreement, commitment, or loan or the change or extension of any of these transactions by renewal, deferment of action, or otherwise, or the acceptance, release, or substitution of security for these transactions shall be punished by a fine of not more than ten thousand dollars ($10,000) or, by imprisonment in the county jail not exceeding one year or in the state prison, or by both that fine and imprisonment.

history: (History: Added by renumbering Section 5301 by Stats. 1990, Ch. 1118, Sec. 10.)

article: 4. Penalties


citation: FIN § 5309

text:
(a) A person shall be sentenced to consecutive terms for each violation of Section 5303, 5304, 5305, or 5306 up to a mandatory term of 20 years in state prison if all of the following are charged in the accusatory pleading and admitted by the defendant, or found to be true by the trier of fact:

(1) The person is an institution affiliated party.

(2) The person engaged in a pattern and practice of activity involving multiple violations of Section 5303, 5304, 5305, or 5306.

(3) The person acted with intent to cause substantial harm, or with reckless disregard of the possibility of causing substantial harm, to the savings institution.

(4) The violations did in fact result in substantial harm to the savings institution.

(b) No part of a consecutive sentence required pursuant to subdivision (a) may be suspended or revoked by the court.

(c) Nothing in subdivision (a) shall limit the court’s discretion to sentence the defendant to a consecutive term longer than provided for in that subdivision, if otherwise permitted by law.

(d) Nothing in subdivision (a) shall limit the court’s discretion to order consecutive sentences for violations of Section 5303, 5304, 5305, or 5306 under any other provision of law.

history: (History: Added by renumbering Section 5307 (as added by Stats. 1990, Ch. 118, Sec. 18.5) by Stats. 1991, Ch. 1091, Sec. 30.)

article: 4. Penalties


citation: FIN § 5310

text:
(a) Any person violating or conspiring to violate Sections 5303, 5304, 5305, or 5306 shall be subject to a civil penalty in an amount assessed by the court in a civil action under this section.

(b) The maximum amount of the penalty which may be imposed under this section shall be determined in accordance with the following:

(1) Except as provided by paragraphs (2) and (3), the civil penalty shall not exceed one million dollars ($1,000,000).

(2) In the case of a continuing violation, the amount of the civil penalty may exceed the amount described in paragraph (1), but may not exceed the lesser of one million dollars ($1,000,000) for each day the violation continues or five million dollars ($5,000,000).

(3) If any person derives pecuniary gain from the violation, or if the violation results in pecuniary loss to a person other than the violator, the amount of the civil penalty may exceed the amounts described in paragraphs (1) and (2) but may not exceed the amount of that gain or loss.

(c) A civil action to recover a civil penalty under this section shall be brought in the name of the people of the State of California by the Attorney General, who shall be required to establish the right to recovery by a preponderance of the evidence.

(d) For the purpose of conducting a civil investigation in contemplation of proceeding under this section, the Attorney General may do all of the following:

(1) Administer oaths and affirmations.

(2) Take evidence.

(3) By subpoena or subpoena duces tecum, summon witnesses and require the production of any books, papers, correspondence, memoranda, or other records which the Attorney General deems relevant or material to the inquiry.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 19.)

article: 4. Penalties


citation: FIN § 5311

text:
(a) Any fine or civil penalty imposed under this chapter shall be based upon the ability of the defendant to pay. In setting the amount of the fine or civil penalty, consideration shall also be given to the seriousness of the offense, the amount of any pecuniary gain by the defendant, and the amount of any pecuniary loss, other than defendant’s own loss, caused by the offense.

(b) A civil penalty may not be imposed against a person under this chapter if that person has been punished by a fine or imprisonment for the same violation.

(c) A fine may not be imposed under this chapter if a civil penalty has previously been imposed for the same violation.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 19.5.)

article: 4. Penalties


citation: FIN § 5320

text: If a person is convicted of a violation of Section 5303, 5304, 5305, or 5306, or is convicted of a felony for a violation of Section 25540 or 25541 of the Corporations Code in connection with the operation of a lending institution subject to the jurisdiction of the department pursuant to this division, or is convicted of a felony violation of Section 487 or 504 of the Penal Code in connection with the operation of a lending institution subject to the jurisdiction of the department pursuant to this division any property which constitutes or is derived from proceeds traceable to that violation is subject to forfeiture pursuant to this article.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 549. Effective January 1, 1997. Operative July 1, 1997.)

article: 5. Criminal Forfeiture

path: 2. SAVINGS ASSOCIATION LAW > 1. Short Title, General Definitions, and General Provisions > 5. Criminal Forfeiture


citation: FIN § 5321

text:
(a) The prosecuting agency shall, prior to, in conjunction with, or subsequent to the criminal proceeding, file a petition of forfeiture with the superior court of the county in which the defendant has been or will be charged with the underlying criminal offense. The petition shall allege that the defendant has engaged in acts chargeable as crimes pursuant to the criminal provisions enumerated in Section 5320 and shall identify the property subject to forfeiture. A notice regarding the petition shall be provided, by personal service or registered mail, to every person who may have an interest in the property specified in the petition. However, if the notice cannot be given by registered mail or personal delivery, the notice shall be published for at least three successive weeks in a newspaper of general circulation in the county where the property is located. The notice shall state that any interested person may file a verified claim with the superior court stating the amount of their claimed interest and an affirmation or denial of the prosecuting agency’s allegation. The notice shall set forth the time within which a claim of interest in the property seized is required to be filed.

(b) If the property alleged to be subject to forfeiture is real property, the prosecuting agency shall, at the time of filing the petition of forfeiture, record a lis pendens in each county in which the real property is situated which specifically identifies the property by legal description, the name of the owner of record as shown on the latest equalized assessment roll, and assessor’s parcel number. The judgment of forfeiture shall not affect the interest in real property of any third party which was acquired prior to the recording of the lis pendens.

(c) If a petition of forfeiture is filed pursuant to this section prior to filing of the complaint in a criminal action, the prosecuting agency shall provide concurrent notice to any parties subject to the proposed forfeiture that they are targets of an anticipated criminal action.

(d) If a petition of forfeiture is filed pursuant to this section prior to the filing of a complaint in a criminal action, the petition and any injunctive order shall be dismissed by operation of law, unless a criminal complaint or grand jury indictment is filed within 120 days after the filing of the petition. If a petition is dismissed pursuant to this section, it shall not be refiled, except upon the filing of a criminal complaint or grand jury indictment.

history: (History: Amended by Stats. 1992, Ch. 1280, Sec. 2. Effective January 1, 1993.)

article: 5. Criminal Forfeiture


citation: FIN § 5322

text:
(a) Any person claiming an interest in the property may, at any time within 30 days from the date of the first publication of the notice of seizure, or within 30 days after receipt of actual notice, file with the superior court of the county in which the action is pending a verified claim stating his or her interest in the property or proceeds. A verified copy of the claim shall be given by the claimant to the Attorney General or district attorney, as appropriate.

(b) (1) If, at the end of the time set forth in subdivision (a), an interested person, other than the defendant, has not filed a claim, the court, upon motion, shall declare that the person has defaulted upon his or her alleged interest, and it shall be subject to forfeiture upon proof of the provisions of subdivision (d).

(2) The defendant may admit or deny that the property is subject to forfeiture pursuant to the provisions of this article. If the defendant fails to admit or deny or to file a claim of interest in the property or proceeds, the court shall enter a response of denial on behalf of the defendant.

(c) (1) The forfeiture proceeding shall be set for hearing in the superior court in which the underlying criminal offense will be tried.

(2) If the defendant is found guilty of the underlying offense, the issue of forfeiture shall be promptly tried, either before the same jury or before a new jury in the discretion of the court, unless waived by the consent of all parties.

(d) At the forfeiture hearing, the prosecuting agency shall have the burden of establishing beyond a reasonable doubt that the defendant was engaged in actions in violation of Sections 5303, 5304, 5305, and 5306 and that the property specified in the petition otherwise meets the criteria for forfeiture under Section 5320. If a jury is the trier of fact, the verdict shall be unanimous in order to impose the forfeiture.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 20.)

article: 5. Criminal Forfeiture


citation: FIN § 5323

text:
(a) Concurrent with, or subsequent to, the filing of the petition, the prosecuting agency may move the superior court for the following pendente lite orders to preserve the status quo of the property alleged in the petition of forfeiture:

(1) An injunction to restrain all interested parties and enjoin them from transferring, encumbering, hypothecating or otherwise disposing of that property.

(2) Appointment of a receiver to take possession of, care for, manage, and operate the assets and properties so that such property may be maintained and preserved.

(b) No preliminary injunction may be granted or receiver appointed without notice, that meets the requirements of Section 5321, to all the interested parties, including actual notice to targets of the anticipated criminal action, and a hearing to determine that such an order is necessary to preserve the property, pending the outcome of the criminal proceedings, and that there is probable cause to believe that the property alleged in the forfeiture proceedings are proceeds or property interests forfeitable under Section 5320. However, a temporary restraining order may issue pending that hearing pursuant to the provisions of Section 527 of the Code of Civil Procedure.

(1) In determining whether to issue a preliminary injunction or temporary restraining order in a proceeding brought by a prosecuting agency in conjunction with or subsequent to the underlying criminal proceeding, the court shall weigh the relative degree of certainty of the outcome on the merits and the consequences to each of the parties of granting the interim relief. If the prosecution is likely to prevail on the merits and the potential harm to the public outweighs the potential harm to the defendants and the interested parties, the court should grant injunctive relief. The court shall give significant weight to the following factors:

(A) The public interest in preserving liquid capital and other financial assets pendente lite.

(B) The difficulty of preserving financial assets pendente lite where the underlying alleged crimes involve issues of fraud and moral turpitude.

(C) The fact that the requested relief is being sought by a public prosecutor on behalf of alleged victims of financial crimes.

(D) The likelihood that substantial public harm has occurred where financial crimes are alleged to have been committed.

(2) In determining whether to issue a permanent injunction or temporary restraining order in a proceeding brought by a prosecuting agency before the filing of a complaint in the underlying criminal proceeding, the court shall weigh the relative degree of certainty of the outcome on the merits and the consequences to each of the parties of granting the interim relief.

(3) No injunctive order issued under this section shall impair the ability of a defendant or interested party to pay the actual legal fees or retainer for his or her legal defense to the criminal charges and the petition for forfeiture.

(c) Notwithstanding any other provision of law, the court in granting these motions may order a surety bond or undertaking to preserve the property interests of the interested parties, but the court shall give significant weight to the unique circumstances of public agencies, as opposed to private litigants, in determining whether to order a surety bond or undertaking.

(d) The court shall, in making its orders, seek to protect the interests of those who may be involved in the same enterprise as the defendant, but who were not involved in the commission of the violation of a crime enumerated in Section 5320.

history: (History: Amended by Stats. 1992, Ch. 1280, Sec. 3. Effective January 1, 1993.)

article: 5. Criminal Forfeiture


citation: FIN § 5324

text:
(a) If the trier of fact at the forfeiture hearing finds that the alleged property or proceeds is forfeitable pursuant to Section 5320, the court shall declare that property or proceeds forfeited to the state or local governmental entity, subject to distribution as provided in Section 5325. No property solely owned by a bona fide purchaser for value shall be subject to forfeiture.

(b) If the trier of fact at the forfeiture hearing finds that the alleged property is forfeitable pursuant to Section 5320, but does not find that a person holding a valid lien, mortgage, security interest, or interest under a conditional sales contract acquired that interest with actual knowledge that the property was to be used for a purpose for which forfeiture is permitted, and the amount due to that person is less than the appraised value of the property, that person may pay to the state or the local governmental entity which initiated the forfeiture proceeding, the amount of the difference between the appraised value of the property and the amount of the lien, mortgage, security interest, or interest under a conditional sales contract. Upon that payment, the state or local governmental entity shall relinquish all claims to the property. If the holder of the interest elects not to make that payment to the state or local governmental entity, the property shall be deemed forfeited to the state or local governmental entity and any indicia of ownership of the property shall be forwarded. The appraised value shall be determined as of the date judgment is entered either (a) by agreement between the holder of the lien, mortgage, security interest, or interest under a conditional sales contract and the governmental entity involved or (b) if they cannot agree, then by a court-appointed appraiser for the county in which the action is brought. A person holding a valid lien, mortgage, security interest, or interest under a conditional sales contract shall be paid the appraised value of his or her interest.

(c) If the amount due to a person holding a valid lien, mortgage, security interest, or interest under a conditional sales contract is less than the value of the property and the person elects not to make payment to the governmental entity, the property shall be sold at public auction by the county if the district attorney is the prosecutor, by the city if the city attorney is the prosecutor, or by the Department of General Services if the Attorney General is the prosecutor. Notice of the sale shall be provided by one publication in a newspaper published and circulated in the city, community, or locality where the sale is to take place.

article: 5. Criminal Forfeiture