citation: FIN § 1460

text: A commercial bank shall not rediscount, borrow money, or hypothecate its assets as security for money borrowed except to the extent and upon the conditions set forth in this division.

chapter: 14. Loans and Investments

article: 1. General Provisions

path: 1.1. BANKING > 14. Loans and Investments > 1. General Provisions


kind: section

code: FIN

citation: FIN § 1461

text: Assets hypothecated by a commercial bank as security for moneys borrowed shall not exceed in value the amount borrowed by more than 50 percent except with the prior written consent of the commissioner.

history: (History: Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)

division: 1.1. BANKING

article: 1. General Provisions


citation: FIN § 1462

text:
A commercial bank may borrow money by discounting or otherwise, and may borrow money secured by real property owned by the bank, to an amount not in excess of its shareholders’ equity, but shall not borrow money except as provided in Sections 1464 and 1465 in excess of such amount without the prior written approval of the commissioner.

The amounts of moneys so borrowed by a commercial bank together with the amount of any of its deposits secured by surety bonds shall not at any one time exceed the amount of its shareholders’ equity without the prior written approval of the commissioner.

article: 1. General Provisions


citation: FIN § 1463

text: A commercial bank may hypothecate its assets in any manner provided by law to secure the deposits of moneys of the United States, of postal savings funds, of estates in bankruptcy cases, of the State of California, or of any political subdivision, public corporation, or district of the State of California. With the prior approval of the commissioner a bank may hypothecate its assets to secure moneys payable to other states.

article: 1. General Provisions


citation: FIN § 1464

text: A commercial bank may borrow for the purpose of buying from the United States, United States bonds, United States Treasury certificates, or notes or other obligations of the United States.

article: 1. General Provisions


citation: FIN § 1465

text: A commercial bank may rediscount with, borrow money from, or hypothecate its assets as security for money borrowed from a Federal Reserve bank, the Federal Deposit Insurance Corporation, or the Federal Home Loan Bank.

article: 1. General Provisions


citation: FIN § 1466

text: A commercial bank may issue negotiable certificates of deposit transferable by endorsement and delivery and nonnegotiable certificates transferable only on the books of the bank.

article: 1. General Provisions


citation: FIN § 1467

text: A commercial bank located in a place the population of which does not exceed 5,000 persons according to the most recent official federal or state census may act as agent for any fire, life, or other insurance company authorized to do business in California by soliciting and selling insurance and collecting premiums and may receive for such services such fees and commissions as may be agreed upon with the insurance company if the bank is engaged in such business on October 1, 1949, and is duly licensed under the Insurance Code, and may act also as the broker or agent for others in making or procuring loans on real property located within 100 miles of the place in which the bank is located and may receive for such services a fee or a commission if it is engaged in such business on October 1, 1949, and is duly licensed. In engaging in either of such businesses the bank shall comply with all rules and regulations of the commissioner relating thereto and shall not guarantee either the principal or interest of any loan procured by it as broker or agent or assume or guarantee the payment of any premium on insurance policies written through it as agent or broker or guarantee the truth of any statement made by an insured in filing an application for insurance.

article: 1. General Provisions


citation: FIN § 1470

text:
(a) In this article and in Article 4 (commencing with Section 1710) of Chapter 19, “affiliate,” when used with respect to a specified person, means any person controlling, controlled by, or under common control with, the specified person, directly or indirectly, through one or more intermediaries.

(b) “Control” has the meaning set forth in Section 1250.

(c) “Regulated corporation” means any corporation or limited liability company or similar entity in which a bank makes an equity investment and which the bank controls.

(d) “Securities issued by a person” means any debt, equity, or other security issued by a person, and any and all affiliates of that person, issued for the benefit of that person or for the benefit of an affiliate of that person.

article: 2. Loan and Investment Limitations

path: 1.1. BANKING > 14. Loans and Investments > 2. Loan and Investment Limitations


citation: FIN § 1471

text:
(a) Subject to the limitations and exceptions in Sections 1481 and 1510, a bank may hold both obligations made by a person, and securities issued by that same person.

(b) The total amount of obligations and securities held by a bank pursuant to subdivision (a) shall not exceed 25 percent of the sum of the shareholders’ equity, allowance for loan and lease losses, capital notes and debentures of the bank.

article: 2. Loan and Investment Limitations


citation: FIN § 1472

text: Subject to prior approval by the commissioner and to any limitations the commissioner may impose, the limitations in Sections 1471, 1481, and 1510 shall not apply to loans made by a bank to, and the bank’s investments in securities of, its regulated corporations.

article: 2. Loan and Investment Limitations


citation: FIN § 1473

text: Sections 1481 and 1510 shall not apply to investments held by a bank prior to January 1, 2009. All authorizations regarding investments by a bank issued by the commissioner prior to January 1, 2009, are terminated.

history: (History: Amended by Stats. 2013, Ch. 334, Sec. 37. (SB 537) Effective January 1, 2014.)

article: 2. Loan and Investment Limitations


citation: FIN § 1480

text:
For the purpose of this article:

(a) “Obligations” means the total sums for the payment of which a person is obligated, primarily or secondarily, to a commercial bank.

(b) Obligations of a person include obligations of others to a commercial bank arising out of loans made by the bank for the benefit of the person.

(c) Obligations of an individual include the obligations of a partnership or association for which obligations the individual is liable.

(d) Obligations of a partnership include the obligations of its members who are liable for its obligations.

(e) Obligations of a corporation include the obligations of all subsidiaries in which it owns or controls a majority interest, except to the extent and under such restrictions as the commissioner may prescribe in specific instances upon special application made by any bank prior to the creation of the obligations.

(f) Obligations of a sovereign government or agency include the obligations of instrumentalities or political subdivisions of the government or agency, except to the extent and under such restrictions as the commissioner may prescribe in specific instances upon special application made by any bank prior to the creation of the obligations.

(g) Obligations of a limited liability company include the obligations of all subsidiaries in which it owns or controls a majority interest, except to the extent and under any restrictions the commissioner may prescribe in specific instances upon special application made by any bank prior to the creation of the obligations.

article: 3. Loan Limits

path: 1.1. BANKING > 14. Loans and Investments > 3. Loan Limits


citation: FIN § 1481

text:
The obligations, as defined in Section 1480, excepting the obligations described in Section 1485 and the obligations described in Section 1483, of any one person owing to a commercial bank at any one time shall not exceed the following limitations:

(a) Obligations which are unsecured shall not exceed 15 percent of the sum of the shareholders’ equity, allowance for loan losses, capital notes, and debentures of the bank.

(b) Obligations, secured and unsecured, in all shall not exceed 25 percent of the sum of the shareholders’ equity, allowance for loan losses, capital notes, and debentures of the bank.

The calculation in subdivision (a) and this subdivision shall conform to a commercial bank’s one-time election to opt out of the requirement to include all components of accumulated other comprehensive income pursuant to, and in accordance with, the authority granted in paragraph (2) of subdivision (b) of Section 324.22 of Part 324 of Title 12 of the Code of Federal Regulations.

Obligations arising out of the discount of commercial or business paper actually owned by the person negotiating the same and endorsed by such person without limitation, together with the secured and unsecured obligations, if any, of such person, shall not exceed 40 percent of the sum of the shareholders’ equity, allowance for loan losses, capital notes, and debentures of the bank.

No commercial bank shall be required, solely by reason of the amendments of this article, to dispose of or reduce any loan which complied with the applicable limitations of this division at the time such loan was made, nor shall any such bank be prevented solely by reason of the provisions of this article from renewing any such loan from time to time.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 101. (SB 1498) Effective January 1, 2023.)

article: 3. Loan Limits


citation: FIN § 1482

text: An obligation shall not be deemed secured by personal property or collateral unless the personal property or collateral held as security is of a kind which has not been declared ineligible by the commissioner and unless it has a market value at least 15 percent greater than the amount of the obligations secured thereby or, if the security is a bank deposit, it shall have a face value at least equal to the amount of the obligations secured thereby. The commissioner may by general regulation declare any particular kinds or classes of personal property ineligible as security. An obligation shall not be deemed secured by real property unless the obligation and the lien securing the same conform to the provisions of Section 1486, 1489, 1494, 1495, or 1496 or the first sentence of Section 1493. Secured and unsecured loans shall be represented by separate notes and shall not be combined in any way within one note or notes.

article: 3. Loan Limits


citation: FIN § 1483

text:
(a) In addition to the limitations contained in Section 1481 a commercial bank may issue letters of credit and a commercial bank may accept drafts or bills of exchange drawn upon it having not more than six months’ sight to run, exclusive of days of grace, which grow out of transactions involving the importation or exportation of goods; or which grow out of transactions involving the domestic shipment of goods; or which are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples. A commercial bank shall not accept such drafts or bills in the aggregate to an amount exceeding 150 percent of the sum of its shareholders’ equity, allowance for loan losses, capital notes, and debentures or, when authorized by the commissioner, to an amount exceeding 200 percent of the sum of its shareholders’ equity, allowance for loan losses, capital notes, and debentures. A commercial bank shall not accept such drafts or bills for any one person to an amount exceeding 10 percent of the sum of its shareholders’ equity, allowance for loan losses, capital notes, and debentures, unless the bank is and remains secured by either attached documents or some other actual security growing out of the same transaction as the acceptance.

(b) With respect to a bank which issues an acceptance, the limitations contained in this section shall not apply to that portion of an acceptance which is issued by such bank and which is covered by a participation agreement sold to another institution.

article: 3. Loan Limits


citation: FIN § 1484

text: With the approval of the commissioner a commercial bank may accept drafts or bills of exchange drawn upon it having not more than three months’ sight to run, exclusive of days of grace, drawn by banks or bankers in foreign countries for the purpose of furnishing dollar exchange as required by the usages of trade in the respective countries; provided, no commercial bank shall accept such drafts or bills of exchange for any one bank to any amount exceeding 10 percent of the sum of the shareholders’ equity, allowance for loan losses, capital notes, and debentures of the accepting bank unless the draft or bill of exchange is accompanied by documents conveying or securing title or unless the bank is secured by some other adequate security. A commercial bank shall not accept such drafts or bills, whether secured or unsecured, in the aggregate to an amount exceeding 50 percent of the sum of its shareholders’ equity, allowance for loan losses, capital notes, and debentures.

article: 3. Loan Limits


citation: FIN § 1485

text:
The limitations of Section 1481 shall not apply to the following and the following shall not be included among the obligations of a person for the purpose of applying these limitations:

(a) Loans secured by obligations of the United States or by obligations unconditionally guaranteed both as to principal and interest by the United States, having a market value at least 10 percent in excess of the loans secured thereby.

(b) Loans in an amount and of a type or class previously approved in writing by the commissioner that are secured by not less than a like amount of obligations of the United States or by obligations unconditionally guaranteed both as to principal and interest by the United States.

(c) Loans to the extent that they are covered by guarantees or by commitments to take over or to purchase without recourse made by (1) any Federal Reserve bank, (2) the United States, (3) any department, bureau, board, commission, agency, or establishment of the United States, including any corporation wholly owned directly or indirectly by the United States, or (4) any small business development corporation, urban development corporation, or rural development corporation incorporated pursuant to Part 5 (commencing with Section 14000) of Division 3 of Title 1 of the Corporations Code.

(d) Drafts or bills of exchange drawn in good faith against actual existing values with negotiable bills of lading attached, whether or not accepted by the drawee.

(e) Bankers’ acceptances of other banks which are eligible for rediscount with a Federal Reserve bank.

(f) Obligations resulting from daily clearances through any clearinghouse association.

(g) Obligations that are fully guaranteed or fully insured or covered by a commitment to fully guarantee or fully insure by the Federal Housing Administration.

(h) Obligations, including portions thereof, to the extent secured by a segregated deposit account in the lending bank, provided a security interest in the deposit has been perfected under applicable law, and subject to all of the following conditions:

(1) Where the deposit is eligible for withdrawal before the secured obligation matures, the lending bank shall establish internal procedures to prevent release of the security without the lending bank’s prior consent.

(2) A deposit that is denominated and payable in a currency other than that of the obligation that it secures may be eligible for this exception if the currency is freely convertible to United States dollars.

(A) This exception applies only to that portion of the obligation that is covered by the United States dollar value of the deposit.

(B) The lending bank shall establish procedures to periodically revalue foreign currency deposits to ensure that the loan or extension of credit remains fully secured at all times.

(i) Obligations described in Section 1510.

history: (History: Amended by Stats. 2013, Ch. 334, Sec. 38. (SB 537) Effective January 1, 2014.)

article: 3. Loan Limits


citation: FIN § 1486

text:
A commercial bank may lend on the security of a first lien on real property or a first lien on a leasehold under a lease which does not expire, or which has been extended or renewed so that it does not expire, for at least 10 years beyond the maturity date of the loan, if:

(a) The term of the loan does not exceed 10 years and the amount does not exceed 60 percent of the sound market value of the property or leasehold, together with the improvements located on the property which are made subject to the lien, as determined by proper appraisal.

(b) The term of the loan does not exceed 30 years, is repayable in substantially equal installments not less often than monthly (or a variation therefrom as may be authorized under a loan executed pursuant to Section 1916.5 or 1916.8 of the Civil Code), with payments commencing not later than 60 days from the date of the loan or, in the case of a construction loan, commencing not later than one year from the date of the loan, and the amount does not exceed 90 percent of the sound market value of the property or leasehold, together with the improvements located on the property which are made subject to the lien, as determined by proper appraisal, provided, however, the loan may exceed 90 percent of the sound market value of the property or leasehold if that portion of the loan which is in excess of 90 percent is guaranteed or insured by a private insurer licensed by the Insurance Commissioner.

(c) The loan is made pursuant to and in conformance with regulations adopted under Section 1916.12 of the Civil Code.

(d) The loan is on a farm or productive agricultural lands, the term does not exceed 30 years, is repayable in substantially equal installments not less often than annually, and the amount does not exceed 90 percent of the sound market value of the property or leasehold, together with the improvements located on the property which are made subject to the lien, as determined by proper appraisal.

(e) The term of the loan does not exceed six months and the amount does not exceed 85 percent of the sound market value of the property or leasehold, together with the improvements located on the property which are made subject to the lien, as determined by proper appraisal.

(f) The term of the loan does not exceed 60 months, the amount does not exceed 85 percent of the sound market value of the property or leasehold, together with the improvements located on the property which are made subject to the lien, as determined by proper appraisal, and the loan is for the purpose of financing building operations under a plan providing for payment of the loan or providing for refinancing by loans otherwise permitted by this chapter.

A commercial bank may make a loan without regard to the above restrictions when necessary to facilitate the sale of real property owned by the bank.

article: 3. Loan Limits


citation: FIN § 1487

text:
(a) The provisions of any deed of trust or mortgage on real property which authorize any state or nationally chartered bank to accelerate the maturity date of the principal and interest on any loan secured thereby or to exercise any power of sale or other remedy contained in the deed of trust or mortgage, upon the failure of the trustor or mortgagor to pay, at the times provided under the terms of the deed of trust or mortgage, any taxes, rents, assessments, or insurance premiums with respect to the real property securing the loan, or upon the failure to pay any advances made with respect to the deed of trust or mortgage by the state or nationally chartered bank, shall be enforceable whether or not an impairment of the security interest in the real property has resulted from the failure of the trustor or mortgagor to pay the taxes, rents, assessments, insurance premiums, or advances.

(b) “State or nationally chartered bank,” as used in this section and Section 1488, includes any person authorized by this state to make or arrange loans secured by real property, or a holding company of a state or nationally chartered bank or any successor in interest.

article: 3. Loan Limits


citation: FIN § 1488

text: The provisions of any deed of trust or mortgage on real property which authorize any state or nationally chartered bank to receive and control the disbursement of the proceeds of any policy of fire, flood, or other hazard insurance respecting the real property shall be enforceable whether or not an impairment of the security interest in the property has resulted from the event that caused the proceeds of the insurance policy to become payable.

article: 3. Loan Limits


citation: FIN § 1489

text:
A commercial bank may lend on the security of a first lien on real property or a first lien on a leasehold under a lease which does not expire, or which has been extended or renewed so that it does not expire, for at least 10 years beyond the maturity date of the loan, if the criteria of any of the following subdivisions are satisfied:

(a) The loan is fully guaranteed or insured or covered by a commitment to guarantee or insure by the United States, the Federal Housing Administrator, or by any other agency of the United States which the commissioner shall have approved for the purposes of this subdivision as an issuer of insurance or guarantees of loans on real property, whether the proceeds of the guarantee or insurance is payable in cash or in obligations of the United States.

(b) The loan is fully guaranteed by the United States or any agency thereof pursuant to the “Servicemen’s Readjustment Act of 1944” or any act of Congress supplementary or amendatory thereof, or, if a portion of the loan is so guaranteed, then if the unguaranteed portion of the loan does not exceed 80 percent of the sound market value of the property or leasehold for loan purposes as determined by proper appraisal.

(c) The loan is one in which the Small Business Administration cooperates through agreements to participate on an immediate or deferred basis under the Small Business Act, as amended.

article: 3. Loan Limits


citation: FIN § 1490

text: A commercial bank shall not lend in the aggregate more than 5 percent of its assets upon the security of the stock of any one corporation or upon the security of the bonds of any one obligor except bonds of the United States or for the payment of which the credit of the United States is pledged, bonds of the State of California or for the payment of which the credit of the State of California is pledged, and bonds of any county, city and county, city, metropolitan water district, school district, or irrigation district of the State of California which qualify as investments for savings banks.

article: 3. Loan Limits


citation: FIN § 1491

text:
No loan shall be made by any commercial bank upon the securities of one or more corporations, the payment of which loan is undertaken, in whole or in part, severally, but not jointly, by two or more persons in any of the following circumstances:

(a) If the borrowers or underwriters are obligated absolutely or contingently to purchase the securities, or any of them, collateral to the loan, unless the borrowers or underwriters have paid on account of the purchase of the securities an amount in cash, or its equivalent, equal to at least 25 percent of the several amounts for which they remain obligated in completing the purchase of the securities.

(b) If the commercial bank making the loan is liable, directly or indirectly, or contingently, for the repayment of the loan or any part thereof.

(c) If its term, including any renewal thereof by agreement, express or implied, exceeds the period of one year.

(d) Or to an amount under any circumstances in excess of 25 percent of the sum of the commercial bank’s shareholders’ equity, allowance for loan losses, capital notes, and debentures.

article: 3. Loan Limits


citation: FIN § 1492

text: Nothing in this chapter restricts a commercial bank in taking any lien on or pledge of any property as additional security for a loan already made in good faith.

article: 3. Loan Limits


citation: FIN § 1493

text: A commercial bank holding a first lien on real property may take, or purchase and hold, or loan upon another and immediately junior lien but all such loans shall not exceed in the aggregate 90 percent of the sound market value of the property as determined by proper appraisal. A commercial bank may loan not to exceed the face value of a deed of trust or mortgage which constitutes a first lien upon real property, but in no event shall any such loan exceed 90 percent of the sound market value of the property covered by said mortgage or deed of trust as determined by proper appraisal.

article: 3. Loan Limits


citation: FIN § 1494

text:
A commercial bank may lend on the security of a first security interest on stock or a membership certificate issued to a tenant-stockholder or resident-member by a completed fee simple cooperative housing corporation, as defined in Section 216 of the U.S. Internal Revenue Code, and the assignment by way of security of the borrower’s interest in the proprietary lease or right of tenancy in property issued by such cooperative housing corporation, provided all of the real property owned by such corporation is located within the state, and further provided, that:

(a) The term of the loan does not exceed 30 years, is repayable in substantially equal installments (or such variation therefrom as may be authorized under a loan executed pursuant to Section 1916.5 or 1916.8 of the Civil Code), not less often than monthly, with payments commencing not later than 60 days from the date of the loan, and the amount does not exceed 80 percent of the sound market value of such certificates of stock or membership certificates; and

(b) The proprietary lease or right of tenancy in the property provides:

(1) That no sublease in excess of one year, amendment or modification to such proprietary lease or right of tenancy in the property shall be permitted or created without the lender’s prior written consent, and

(2) That in the event of the borrower’s default under such loan, the lender shall have the right, without the prior consent or approval of the cooperative housing corporation, to sell such shares or membership certificates at public or private sale following at least 30 days prior written notice to the borrower and to the cooperative housing corporation, at the address of the premises subject to the proprietary lease or right of tenancy in the property, and assign such proprietary lease or right of tenancy in the property to the purchaser who shall agree as a condition of such assignment to cure any defaults thereunder.

For all purposes of this division, such loan shall be considered a secured residential real estate loan and shall be subject to rules and regulations implementing the provisions of this section issued by the commissioner.

article: 3. Loan Limits


citation: FIN § 1495

text:
(a) A commercial bank may make amortized loans upon the security of residential real property to finance the purchase and installation of material or equipment designed to promote energy conservation or the efficient use of energy in the residential real property securing the loan, if all of the following apply:

(1) The residential real property securing the loan consists of not more than four dwelling units.

(2) The loan is made in connection with a concurrent loan authorized under Section 1486.

(3) The loan is in an amount not to exceed 10 percent of the loan made under the authority of Section 1486.

(b) A commercial bank may make additional advances, or additional loans, to an existing borrower in order to finance the purchase and installation of material and equipment designed to promote energy conservation or the efficient use of energy in the residential real property securing the loan, if all of the following apply:

(1) The residential real property securing the loan consists of not more than four dwelling units.

(2) The aggregate of the additional loan or advance and the unpaid balance of the existing loan will not exceed that percent of the appraised value of the residential real property securing the loan permitted by Section 1486 immediately after the purchase and installation of such material and equipment.

history: (History: Amended by Stats. 2013, Ch. 334, Sec. 39. (SB 537) Effective January 1, 2014.)

article: 3. Loan Limits


citation: FIN § 1496

text:
For the purpose of determining whether any loan or investment is secured by a first lien on real property as required by any provision of this division, none of the following shall be deemed a prior encumbrance unless any installment or payment thereunder, other than a rental or royalty under a lease, is due and delinquent:

(a) The lien of any tax, assessment, or bond levied or issued by any state or territory of the United States or by any district, political subdivision, or municipal corporation thereof, except the lien of an assessment levied against a particular parcel of real property and of any bond given or issued pursuant to law in lieu of the payment of the assessment.

(b) A lien created by a contract and given to secure the payment for water to be furnished under the contract for the irrigation of the real property or any part thereof.

(c) A lease of the real property under which all rents or royalties are reserved to the owner.

(d) The lien of a bond given or issued pursuant to law in lieu of the payment of an assessment levied against a particular parcel of real property and the lien of any assessment levied to pay that bond, if the unpaid balance of the bond and the amount of the loan or investment combined do not exceed the percentage of the sound market value of the real property permitted to be so loaned or invested by any provision of this division.

(e) A lien given to secure the payment of any assessment or subscription to meet the requirements of any law of the United States in respect to any irrigation project of the United States in any state or territory of the United States which may be levied, made, or received by any corporation or association formed to carry out the provisions of that law, if the unpaid balance of the assessment or subscription and the amount of the loan or investment combined do not exceed the percentage of the sound market value of the real property permitted to be so loaned or invested by any provision of this division.

article: 3. Loan Limits


citation: FIN § 1497

text: No loan made by any bank in excess of any limitations contained in this division or which is made in violation of any of the provisions of this division shall be invalid or illegal as to the lender for that reason, nor shall any loan made to any bank in excess of the amounts permitted by this division be invalid or illegal as to the lender for that reason.

article: 3. Loan Limits


citation: FIN § 1498

text:
(a) Any state-chartered bank that extends consumer credit to a covered borrower, as those terms are defined in Part 232 (commencing with Section 232.1) of Subchapter M of Chapter I of Subtitle A of Title 32 of the Code of Federal Regulations, as published on July 22, 2015, on page 43560 in Number 140 of Volume 80 of the Federal Register, shall comply with the applicable provisions of Section 987 of Title 10 of the United States Code, as amended by 126 Stat. 1785 (Public Law 112-239), and Part 232 (commencing with Section 232.1) of Subchapter M of Chapter I of Subtitle A of Title 32 of the Code of Federal Regulations, as amended on the date described above.

(b) A state-chartered bank that does not market or extend consumer credit to covered borrowers, as those terms are defined under Part 232 (commencing with Section 232.1) of Subchapter M of Chapter I of Subtitle A of Title 32 of the Code of Federal Regulations, as amended on the date described in subdivision (a), shall not be in violation of Section 394 of the Military and Veterans Code.

history: (History: Amended by Stats. 2017, Ch. 514, Sec. 1. (SB 266) Effective January 1, 2018.)

article: 3. Loan Limits


citation: FIN § 1510

text:
The total amount invested by a bank in the securities issued by a person shall not exceed 15 percent of the sum of the shareholders’ equity, allowance for loan and lease losses, capital notes and debentures of the bank, except:

(a) Obligations of the United States and those for which the faith and credit of the United States are pledged for the payment of principal and interest.

(b) Bonds, consolidated bonds, collateral trust debentures, or other obligations issued by the Federal Financing Bank, the United States Postal Service, federal land banks, or federal intermediate credit banks established under the Federal Farm Loan Act; in debentures and consolidated debentures issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933; in consolidated notes, bonds, debentures, and other obligations issued by federal land banks, federal intermediate credit banks, and banks for cooperatives under the Farm Credit Act of 1971; in the bonds of any federal home loan bank established under the Federal Home Loan Bank Act; and in stock, bonds, debentures, participations, and other obligations of or issued by the Student Loan Marketing Association, the Federal National Mortgage Association, the Government National Mortgage Association, and the Federal Home Loan Mortgage Corporation.

(c) Obligations of the State of California and those for which the credit of the State of California is pledged for the payment of principal and interest.

(d) Obligations of a local agency or district of the State of California having the power, without limit as to rate or amount, to levy taxes to pay the principal and interest of the bonds upon all property within its boundaries subject to taxation by the local agency or district.

(e) Capital stock of the Federal Reserve bank serving the district in which the bank is located.

(f) Capital stock of a federal home loan bank in the manner provided in the Federal Home Loan Bank Act.

(g) Capital stock of the Federal Deposit Insurance Corporation.

article: 4. Investments

path: 1.1. BANKING > 14. Loans and Investments > 4. Investments


citation: FIN § 1511

text:
Section 1510 shall not apply to investments made pursuant to this section. A bank may invest in shares of an investment company (1) registered with the Securities and Exchange Commission pursuant to the federal Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.) and for which the shares are registered under the federal Securities Act of 1933 (15 U.S.C. Sec. 77a et seq.), and (2) the portfolio of which consists solely of the following:

(a) Debt obligations in which a bank is permitted to invest without limitation pursuant to subdivision (a), (b), (c), or (d) of Section 1510 and repurchase agreements fully collateralized by those obligations.

(b) Loans of federal funds and similar loans of unsecured day(s) funds, maturing in six months or less to institutions insured by the Federal Deposit Insurance Corporation Federal Funds. Loans under this subdivision are limited to transactions described in subsection (a) or (b) of Section 32.102 of Title 12 of the Code of Federal Regulations involving investment companies in which the entire beneficial interest is held exclusively by depository institutions, as permitted by Section 204.123 of Title 12 of the Code of Federal Regulations.

(c) Cash or its equivalent.

article: 4. Investments


citation: FIN § 1512

text: Notwithstanding Section 1510, a bank may purchase, acquire, or hold the stock of any corporation pursuant to a plan of reorganization approved by the commissioner by which all of the stock of one or more banks organized under the laws of this state shall be acquired and immediately reissued proportionately to the stockholders of the acquiring bank.

article: 4. Investments


citation: FIN § 1513

text: If any commercial bank has made investments which it was authorized to make at the time they were made it shall not be required to dispose of such investments by reason of adoption of the Banking Code, this code, or any amendments to this article.

article: 4. Investments


citation: FIN § 1514

text:
(a) A commercial bank may organize, sponsor, operate, control, or render investment advice to, an investment company, or underwrite, distribute, or sell securities of any investment company which has qualified to sell its securities in this state pursuant to Part 2 (commencing with Section 25100) of Division 1 of Title 4 of the Corporations Code, if the officers and employees of the bank who sell these securities meet such standards with respect to training, experience, and sales practices as established by the commissioner or the commissioner’s designee. For the purpose of this section, “investment company” means an investment company as defined in the Investment Company Act of 1940 (15 U.S.C., Sec. 80a-1 et seq.).

(b) The amendments made to this section by the act adding this subdivision shall become operative on July 1, 2026.

history: (History: Amended by Stats. 2026, Ch. 28, Sec. 16. (SB 170) Effective June 29, 2026. Operative July 1, 2026, by its own provisions.)

article: 4. Investments


citation: FIN § 1515

text: A bank or trust company may acquire stock in settlement or reduction of a loan or in exchange for an investment previously made in good faith where the acquisition of the stock is necessary in order to minimize or avoid loss arising out of the loan or investment. The limitation in Section 1510 shall not apply to the stock acquired in accordance with this section. Whenever any stock that is acquired in accordance with this section can be sold for an amount sufficient to reimburse the bank or trust company for all loss arising out of the loan for which the stock was security or arising out of the original investment by the bank or trust company, the bank or trust company shall sell the same or shall convert the stock to an investment subject to Section 1510.

history: (History: Amended by Stats. 2013, Ch. 334, Sec. 40. (SB 537) Effective January 1, 2014.)

article: 4. Investments


citation: FIN § 1520

text: Whenever the public administrator becomes the administrator of the estate of a decedent who at the time of his death left money on deposit with a commercial bank, the public administrator may allow such deposit to remain in the commercial bank and may deposit therein to the account of the decedent any moneys of said estate not required for current expenses of administration, and in such cases the public administrator need not deposit the same with the county treasurer. Moneys so deposited, whether by the decedent or by the public administrator, may be withdrawn upon the order of the public administrator countersigned by a judge of the superior court when required for the purpose of administration or otherwise.

article: 5. Miscellaneous

path: 1.1. BANKING > 14. Loans and Investments > 5. Miscellaneous


citation: FIN § 1521

text:
A commercial bank accepting savings deposits shall provide by its bylaws or by contract with its savings depositors the time and condition on which repayment is to be made to such depositors. The bank shall not waive any requirement of notice before payment of any savings deposit except as to all savings deposits.

Whenever there is any call by savings depositors for repayment of a greater amount than the bank may have disposable for that purpose, the bank must not make any new loan or investment until such excess call has ceased.

article: 5. Miscellaneous


citation: FIN § 1522

text: For the purposes of any law authorizing or providing for the deposit of funds with a savings bank, a commercial bank accepting savings deposits shall be deemed a savings bank.

article: 5. Miscellaneous


citation: FIN § 1530

text: Chapter 15 (commencing with Section 1530) is a restatement of Division 7 (commencing with Section 18000) as that division pertains to the licensing and regulation of industrial banks and to the insurance of deposits of industrial banks. Chapter 15 is a continuation, simplification, and recodification of the licensing and regulation of deposit-taking industrial banks.

chapter: 15. Industrial Banks

article: 1. General Provisions

path: 1.1. BANKING > 15. Industrial Banks > 1. General Provisions


citation: FIN § 1531

text:
(a) Any reference in a provision of any statute or regulation of this state to banks or commercial banks includes industrial banks.

(b) Subdivision (a) does not apply in any of the following cases:

(1) In case the provision or a related provision expressly provides otherwise.

(2) In the case of any provision of Division 1.6 (commencing with Section 4800) or this division.

article: 1. General Provisions


citation: FIN § 1532

text: The Industrial Loan Account of the Financial Institutions Fund is renamed to be the Industrial Bank Account.

article: 1. General Provisions


citation: FIN § 1533

text:
(a) The commissioner shall annually levy on and collect from industrial banks authorized to transact industrial banking business in this state, pro rata on the basis of total assets, an assessment in a total amount that is sufficient in the commissioner’s judgment to (1) meet the expenses of the department in administering laws relating to industrial banks or to the industrial banking business that are not otherwise provided for and (2) provide a reasonable reserve for contingencies.

(b) The amount of the annual assessment on any industrial bank authorized to transact the industrial banking business shall be the greater (1) five thousand dollars ($5,000) or (2) the sum of the products determined by multiplying (A) increments of the bank’s or trust company’s total assets by (B) percentages of the base assessment rate according to the following table:Total Assets (In Percentage of Base Millions)Assessment RateFirst $2 100.0Next $18 50.0Next $80 12.0Next $100 6.25Next $800 6.0Next $1,000 4.0Next $4,000 3.5Next $14,000 3.0Next $20,000 2.5Excess over $40,000 1.5(c) (1) For purposes of the annual assessment, the total assets of an industrial bank authorized to transact industrial banking business shall be determined as of a date fixed by the commissioner. However, if an industrial loan company is not authorized to transact industrial banking business as of that date but is so authorized as of the date when the annual assessment is levied, its total assets for purposes of the annual assessment shall be determined as of the date of the levy.

(2) (A) In determining for purposes of the annual assessment on the total assets of industrial banks that are authorized to transact industrial banking business and that have one or more foreign (other state) branch offices or facilities, the assets of the foreign (other state) branch offices and facilities shall be excluded from total assets. However, the commissioner may order the assets of foreign (other state) branch offices and facilities to be included in total assets if and to the extent that it is necessary or advisable in the commissioner’s judgment to (i) meet the expenses of the department on account of foreign (other state) branch offices and facilities that are not otherwise provided for and (ii) provide a reasonable reserve for contingencies.

(B) If the commissioner finds that an industrial bank authorized to transact industrial banking business allocated any asset to a foreign (other state) branch office or facility for the purpose, in whole or in part, of reducing its annual assessment, the commissioner may, for purposes of calculating the annual assessment on the industrial bank, reallocate the asset to the industrial bank’s head office.

(d) The base assessment rate for each annual assessment shall be fixed by the commissioner but shall not exceed two dollars and twenty cents ($2.20) per one thousand dollars ($1,000) of total assets.

article: 1. General Provisions


citation: FIN § 1540

text: Each industrial bank shall be an insured bank at all times while it is engaged in the industrial banking business.

article: 2. Industrial Bank Business

path: 1.1. BANKING > 15. Industrial Banks > 2. Industrial Bank Business


citation: FIN § 1541

text: Subject to any order or regulation of the commissioner, an industrial bank may accept deposits evidenced by a deposit account or by certificates, that are redeemable prior to their stated maturity, but may not accept demand deposits.

article: 2. Industrial Bank Business


citation: FIN § 1542

text:
In addition to other provisions of this division that are otherwise applicable to an industrial bank, the following provisions of this division apply to the industrial bank as if it were a California state commercial bank:

(a) Chapter 4 (commencing with Section 1070).

(b) Chapter 4.5 (commencing with Section 1090).

(c) Chapter 5 (commencing with Section 1100).

(d) Chapter 8 (commencing with Section 1280).

(e) Chapter 10 (commencing with Section 1320).

(f) Chapter 11 (commencing with Section 1380).

(g) Chapter 12 (commencing with Section 1400).

(h) Chapter 13 (commencing with Section 1450).

(i) Chapter 14 (commencing with Section 1460).

(j) Chapter 16 (commencing with Section 1550).

(k) Chapter 17 (commencing with Section 1620).

(l) Chapter 18 (commencing with Section 1660).

(m) Chapter 19 (commencing with Section 1670).

(n) Chapter 5 (commencing with Section 500) of Division 1.

(o) Chapter 6 (commencing with Section 550) of Division 1.

(p) Division 1.6 (commencing with Section 4800).

article: 2. Industrial Bank Business


citation: FIN § 1550

text:
No corporation shall engage in the trust business unless:

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

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

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

chapter: 16. Trust Companies

article: 1. General Provisions

path: 1.1. BANKING > 16. Trust Companies > 1. General Provisions


citation: FIN § 1551

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

article: 1. General Provisions


citation: FIN § 1552

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

article: 1. General Provisions


citation: FIN § 1553

text:
The following persons are exempt from Section 1550:

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

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

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

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

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

article: 1. General Provisions


citation: FIN § 1554

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

article: 1. General Provisions


citation: FIN § 1555

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

(a) To deliver bonds and receive payments therefor.

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

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

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

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

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

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

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

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

article: 1. General Provisions


citation: FIN § 1556

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

(a) Any California state bank.

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

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

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

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

article: 1. General Provisions


citation: FIN § 1557

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

article: 1. General Provisions


citation: FIN § 1560

text: It is the intent of the Legislature that the provisions of this article, insofar as they are contained in the regulations regarding fiduciary activities of national banks (Part 9 (commencing with Section 9.1) of Title 12 of the Code of Federal Regulations) of the Office of the Comptroller of the Currency, conform, and be interpreted by anyone construing the provisions of this article to so conform, to those regulations, any rule or interpretation promulgated thereunder by the Office of the Comptroller of the Currency, and to any interpretation issued by an official or employee of the Office of the Comptroller of the Currency duly authorized to issue the interpretation.

article: 2. Fiduciary Activities

path: 1.1. BANKING > 16. Trust Companies > 2. Fiduciary Activities


citation: FIN § 1561

text:
For purposes of Section 1562, the following terms have the following meanings:

(a) “Bank” means any of the following:

(1) A commercial bank, industrial bank, or trust company incorporated under the laws of this state.

(2) A foreign (other state) bank that may establish a branch office in this state in accordance with Article 2 (commencing with Section 1680) of Chapter 19.

(b) “Fiduciary Regulations” means the regulations regarding fiduciary activities of national banks promulgated by the Office of the Comptroller of the Currency (Part 9 (commencing with Section 9.1) of Title 12 of the Code of Federal Regulations), as amended from time to time.

(c) “Affiliate” has the meaning set forth in Section 150 of the Corporations Code.

(d) “Applicable law” means the law of the state, another state, or other jurisdiction governing a bank’s fiduciary relationships, any applicable federal laws governing those relationships, or any court order pertaining to those relationships.

(e) “Custodian under a uniform gifts to minors act” means a fiduciary relationship established pursuant to the California Uniform Transfers to Minors Act (Part 9 (commencing with 3900) of Division 4 of the Probate Code).

(f) “Fiduciary account” means an account administered by a bank acting in a fiduciary capacity.

(g) “Fiduciary capacity” means trustee, executor, administrator, registrar of stocks and bonds, transfer agent, guardian, assignee, receiver, or custodian under a uniform gifts to minors act; investment adviser, if the bank receives a fee for its investment advice; any capacity in which the bank possesses investment discretion on behalf of another; or any other similar capacity.

(h) “Fiduciary powers” means the powers granted a bank by virtue of its receipt of the authority to engage in trust business from the commissioner.

(i) “Guardian” means the guardian or conservator, by whatever name used by law, of the estate of a minor, an incompetent person, an absent person, or a person over whose estate a court has taken jurisdiction, other than under bankruptcy or insolvency laws.

(j) “Investment discretion” means, with respect to an account, the sole or shared authority, whether or not that authority is exercised, to determine what securities or other assets to purchase or sell on behalf of that account. A bank that delegates its authority over investments and a bank that receives delegated authority over investments shall both be deemed to have investment discretion.

(k) “Trust office” means an office of a bank, other than a main office, at which the bank engages in the trust business. A trust office that engages in core banking business, as defined in subdivision (b) of Section 1670, is considered a branch office of the bank.

(l) “Trust representative office” means a facility as defined in subdivision (c) of Section 1670.

article: 2. Fiduciary Activities


citation: FIN § 1562

text:
(a) Sections 9.4 to 9.6, inclusive, Sections 9.8 to 9.15, inclusive, and Sections 9.18 to 9.101, inclusive, of the Fiduciary Regulations in all of their particular, including footnotes, are hereby referred to, incorporated by reference into this article, and adopted.

(b) All references to the term “national bank” or “national banks” used in the Fiduciary Regulations shall mean “bank” or “banks” for purposes of this article.

article: 2. Fiduciary Activities


citation: FIN § 1570

text:
Every trust company shall deposit with the State Treasurer money or securities of the character described in Section 1572 as security for its court and private trusts as follows:

(a) If the trust company’s principal place of business is situated in a city the population of which does not exceed 100,000 persons, it shall deposit with the State Treasurer money or securities having a market value of at least fifty thousand dollars ($50,000) as security for the faithful performance and execution of all court trusts accepted by it, and money or securities having a market value of at least fifty thousand dollars ($50,000) as security for the faithful performance and execution of all private trusts accepted by it.

Whenever any such trust company receives trust funds or property, other than real property, from court trusts accepted by it to the amount of five hundred thousand dollars ($500,000), it shall forthwith give the commissioner written notice thereof, and within 30 days thereafter shall make an additional deposit with the State Treasurer of money or securities having a market value of fifty thousand dollars ($50,000) as security for its court trusts, and money or securities having a market value of fifty thousand dollars ($50,000) as additional security for its private trusts.

(b) If the trust company’s principal place of business is situated in a city the population of which exceeds 100,000 persons, it shall deposit with the State Treasurer money or securities having a market value of at least one hundred thousand dollars ($100,000) as security for the faithful performance and execution of all court trusts accepted by it, and money or securities having a market value of at least one hundred thousand dollars ($100,000) as security for the faithful performance and execution of all private trusts accepted by it.

article: 3. Deposits with State Treasurer

path: 1.1. BANKING > 16. Trust Companies > 3. Deposits with State Treasurer


citation: FIN § 1571

text: Whenever any trust company receives trust funds or property, other than real property, from court trusts accepted by it to the amount of one million dollars ($1,000,000), it shall forthwith give the commissioner written notice thereof, and within 30 days thereafter shall make an additional deposit with the State Treasurer of money or securities having a market value of fifty thousand dollars ($50,000). For each additional five hundred thousand dollars ($500,000) of such trust funds thereafter received by any trust company from court trusts a similar notification in writing shall forthwith be given to the commissioner and a further deposit of money or securities having a market value of twenty-five thousand dollars ($25,000) shall be made within 30 days thereafter by such trust company with the State Treasurer until money or securities having a market value of five hundred thousand dollars ($500,000) have been so deposited.

article: 3. Deposits with State Treasurer


citation: FIN § 1572

text:
Security deposited with the Treasurer by trust companies pursuant to Section 1570 or 1571 shall consist of the following:

(a) Bonds or other interest-bearing notes or obligations of the United States or those for which the faith and credit of the United States are pledged for the payment of principal and interest.

(b) Bonds of the State of California or those for which the faith and credit of the State of California are pledged for the payment of principal and interest or in registered warrants of the State of California.

(c) Obligations and securities of the type described in subdivisions (a) to (g), inclusive, of Section 1510.

(d) Obligations and assets of the type described in subdivisions (a) to (c), inclusive, of Section 1511.

(e) Loans secured by a first lien on real property and otherwise complying with the provisions of subdivision (a) of Section 1486.

(f) Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the International Finance Corporation, or the African Development Bank.

article: 3. Deposits with State Treasurer


citation: FIN § 1573

text: Such money or securities shall be approved by the commissioner and be deposited with the Treasurer upon the written order of the commissioner. Upon receiving any such deposit the Treasurer shall give his or her receipt therefor and thereafter subject to the provisions of this chapter shall hold such deposits for the sole benefit of the beneficiaries of the class of trust business for the security and protection of which the same were deposited. The state is responsible for the custody and safe return of any money or securities so deposited. The Treasurer shall deposit any such moneys under the provisions of Sections 16370 to 16375 of the Government Code.

article: 3. Deposits with State Treasurer


citation: FIN § 1574

text: Securities deposited pursuant to this article may be exchanged from time to time, with the approval of the commissioner, for other like securities of equal market value. Upon written request to the commissioner, any trust company shall be entitled to withdraw from the Treasurer, from time to time, any amount of its securities so deposited in excess of the amount it is required to maintain on deposit in order to conform with the requirements of this article. Upon receiving a written request for such withdrawal or exchange, and satisfactory proof of the facts warranting the same, the commissioner shall forthwith deliver to the Treasurer a written order directing the withdrawal or exchange of such securities so as to conform with the provisions of this section. The Treasurer shall comply with such written order. So long as the trust company so depositing such securities shall continue solvent, it shall have the right and shall be permitted by the Treasurer to receive the interest and dividends on any securities deposited by it.

article: 3. Deposits with State Treasurer


citation: FIN § 1575

text: Should any security deposited pursuant to this article so depreciate in value as to reduce the deposit below the amount required by this article, additional money or securities shall be deposited promptly in amount sufficient to meet such requirements. The commissioner may make an investigation of the value of any security deposited pursuant to this article, at the time such security is presented for deposit or at any time thereafter, whenever in his judgment such investigation is necessary. The commissioner may make such charge as may be reasonable and proper for such investigation.

article: 3. Deposits with State Treasurer


citation: FIN § 1576

text: When any revaluation of securities is made by the commissioner pursuant to Section 1575, other than at the time such securities are presented for deposit, United States Government securities having a maturity date less than five years from the date of such revaluation shall be valued at not less than par.

article: 3. Deposits with State Treasurer


citation: FIN § 1577

text: The money and securities deposited pursuant to this article shall be subject to sale and the same or the proceeds thereof shall be subject to disposal by the State Treasurer only on the order of a court of competent jurisdiction and for the benefit respectively of the beneficiaries of that class of trust business for the security and protection of which the securities were deposited.

article: 3. Deposits with State Treasurer


citation: FIN § 1578

text: The commissioner may, pursuant to Section 329, levy a civil penalty against any trust company that fails to comply with this article.

article: 3. Deposits with State Treasurer


citation: FIN § 1580

text: A trust company may invest its contributed capital only in the securities and properties in which a commercial bank is permitted to invest its funds pursuant to Sections 800 to 819, inclusive, and in loans on real property which commercial banks are permitted to make pursuant to Article 3 (commencing with Section 1480) of Chapter 14.

article: 4. Investments

path: 1.1. BANKING > 16. Trust Companies > 4. Investments


citation: FIN § 1581

text: Trust funds received by any trust company in connection with its trust business, if invested, shall be invested as provided in Part 4 (commencing with Section 16000) of Division 9 of the Probate Code.

article: 4. Investments


citation: FIN § 1582

text:
(a) As used in this section:

(1) “Fund” means any investment company registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), as amended from time to time.

(2) “Trust” means any court trust or private trust.

(3) “Trust Law” means Division 9 (commencing with Section 15000) of the Probate Code.

(b) Within the standards established by trust law, including, but not limited to, Division 9 (commencing with Section 15000) of the Probate Code, a trust company acting in any capacity under a trust may, in the exercise of its investment discretion unless the trust instrument provides expressly to the contrary, invest and reinvest in the securities of or other interests in any fund to which the trust company or its affiliate is providing services including, but not limited to, services as an investment adviser, sponsor, distributor, custodian, agent, registrar, administrator, servicer, or manager, and for which the trust company or its affiliate receives compensation.

(c) Before or within 30 days after the initial investment upon the exercise of discretionary powers authorized by subdivision (b), the trust company, acting in any capacity under a trust, shall furnish written notice of the exercise of the discretionary powers and a copy of the prospectus relating to the securities to all persons to whom the trust company is required to render statements of account pursuant to applicable provisions of the Trust Law or to whom the trust company regularly provides a statement of account unless specifically waived in writing.

(d) With respect to any trust so invested, the trust company shall disclose to all persons identified in subdivision (c), at least annually by prospectus, statement of account, or other written notice, a brief description of the fees or rates charged by the trust company and its affiliates for its services as investment adviser or investment manager to the fund.

(e) In connection with an investment or reinvestment authorized by subdivision (b), the portion of compensation a trust company receives from the trust reasonably attributable to investment advisory or investment management services to the trust shall be reduced (but not below zero) by an amount equal to compensation that is received by the trust company or its affiliates for providing investment advisory or investment management services to the fund for the portion of the trust invested in the fund.

article: 4. Investments


citation: FIN § 1583

text: Any trust company or bank authorized to engage in the trust business holding trust funds awaiting investment or distribution may deposit or leave on deposit such funds with any state or national bank. Such funds shall not, however, be deposited or left with the same corporation or association depositing or leaving on deposit such funds or with any corporation or association holding or owning a majority of the capital stock of the trust company or bank making or leaving such deposit, unless such corporation or association shall first pledge, as security for such deposit, securities eligible for investment by savings banks having a market value of not less than the funds so deposited. No security shall be required with respect to any part of such deposits which is insured under the provisions of any law of the United States.

article: 4. Investments


citation: FIN § 1584

text:
Any trust company acting in any capacity under a court or private trust or when acting in such capacity with one or more persons as cofiduciary or cofiduciaries, unless the instrument creating such trust contains a provision to the contrary, may, with the consent of such cofiduciary or cofiduciaries cause any stock or other securities held in any such capacity to be registered in the name of a nominee or nominees of such trust company and any trust company when acting as depositary or custodian for the trustee of any other court or private trust, unless the instrument creating the trust contains a provision to the contrary, may, with the consent of the trustee of such other trust, cause any stock or other securities held by it in such capacity to be registered in the name of a nominee or nominees of such trust company. Any such trust company shall be liable for any loss occasioned by the acts of any nominee of such trust company with respect to such stock or other securities so registered. The records of such trust company shall at all times show the ownership of any such stock or other securities and of those held in bearer form. Such stock or other securities and those held in bearer form shall at all times be kept by such trust company separate and apart from its other assets and may be kept by such trust company:

(a) In a manner such that all certificates representing the stock or other securities from time to time constituting the assets of a particular estate, trust or other fiduciary account are held separate from those of all other estates, trusts or accounts; or

(b) In a manner such that, without certification as to ownership attached, certificates representing stock or other securities of the same class of the same issuer and from time to time constituting assets of particular estates, trusts or other fiduciary accounts are held in bulk, including, to the extent feasible, the merging of certificates of small denomination into one or more certificates of large denomination, provided that a trust company, when operating under the method of safekeeping security certificates described in this subdivision, shall be subject to such rules and regulations as, in the case of state chartered institutions, the commissioner and, in the case of national bank associations, the Comptroller of the Currency, may from time to time issue. Such trust company shall, on demand by any party to an accounting by such trust company as fiduciary or on demand by the attorney for such party, certify in writing the stock or other securities held by such trust company as such fiduciary for such party.

No domestic or foreign corporation or the registrar or transfer agent of any such corporation shall be liable for registering or causing to be registered on the books of such corporation any share or shares or other securities in the name of any nominee of such trust company or for transferring or causing to be transferred on the books of any such corporation any share or shares or other securities theretofore registered by such corporation in the name of any nominee of such trust company as herein provided when the transfer is made upon the authorization of such nominee.

article: 4. Investments


citation: FIN § 1585

text:
(a) For purposes of this section, two or more trust companies shall be deemed to be affiliated if they are members of the same affiliated group, within the meaning of Section 1504 of the Internal Revenue Code.

(b) Any trust company may establish and administer common trust funds composed of property permitted by law for the investment of trust funds, for the purpose of furnishing investments to any one or more of the following: (1) itself, as fiduciary; (2) itself and others, as cofiduciaries; (3) any affiliated trust company including, without limitation, any foreign (other state) affiliated trust company, as fiduciary; and (4) any affiliated trust company including, without limitation, any foreign (other state) affiliated trust company and others, as cofiduciaries. Any trust company may as such fiduciary or cofiduciary invest funds which it lawfully holds for investment in interests in common trust funds administered by itself or by any affiliated trust company including, without limitation, any foreign (other state) affiliated trust company, if such investment is not prohibited by the instrument, judgment, decree, order, or statute creating or governing such fiduciary relationship, and if, in the case of cofiduciaries, the trust company procures the consent of its cofiduciaries to such investment.

(c) Each common trust fund established hereunder shall be treated as an entity separate and distinct from the fiduciary relationships participating therein. No fiduciary in administering a participating fiduciary relationship shall be required to make any apportionment or allocation between the principal and income of this relationship different from that made for the common trust fund. No participating fiduciary relationship, nor any person having an interest in that relationship, shall have or be deemed to have any ownership in any particular property of the common trust fund, but each participating fiduciary relationship shall have a proportionate undivided interest in the fund and its income, and the ownership of all property of the common trust fund shall be in the trustee of the fund.

(d) This section shall apply to fiduciary relationships now in existence or hereafter established, whether the same be revocable or irrevocable. The commissioner, at his or her direction, may make an examination of any common trust fund established hereunder at the times and to the extent as he or she may deem advisable. The provisions of the Corporate Securities Law shall not apply to the creation, administration, or termination of common trust funds, nor to participation therein.

article: 4. Investments


citation: FIN § 1586

text:
With regard to any participation certificates heretofore issued by any trust company, secured by a trust deed or mortgage, the full legal title in the deed or mortgage and debt (referred to in this section as “security”) shall be held by the trust company issuing the certificates as trustee of an express trust, with all powers necessary to extend, renew, enforce, collect, and liquidate the same, acquire title to the property covered thereby either through foreclosure or by voluntary conveyance; manage, lease, sell (either for cash or upon deferred payments), exchange, or otherwise realize upon the security or property and distribute the net proceeds thereof. All sums so realized shall, as and when received by such trustee, after payment of its compensation and all costs, charges, and expenses, including brokers’ commissions and advances for taxes and assessments, incurred or made in connection with the protection, administration, and liquidation of the security or property, be distributed to the trusts or persons who are beneficiaries of the trust, as their interests may appear therein. The rights and interests therein of any such beneficiary failing to contribute on demand its or his pro rata of sums advanced, expended, or required by the trust company in the protection, administration, or liquidation of the trust shall be subject to a lien for all sums, with legal interest thereon advanced, expended, or required for any of such purposes by the trustee or by any other beneficiary of the trust.

The trust in such security or property shall continue in the trust company so long as any of the certificates are outstanding, irrespective of any distribution of the certificates from the trust in which the same are held.

The purpose of this section is to define and clarify the rights and obligations of trust companies and of all persons and trusts interested in participation certificates issued under any authority of law.

article: 4. Investments


citation: FIN § 1600

text:
A trust company has the following powers:

(a) It may act, or may be appointed by any court to act, in like manner as an individual, as executor, administrator, guardian or conservator of estates, assignee, receiver, depositary, trustee, custodian, or in any other fiduciary or representative capacity for any purpose permitted by law, may act as transfer agent or registrar of corporate stocks and bonds, may buy and sell securities for the account of customers, and may accept and execute any trust business permitted by any law of this or any other state or of the United States to be taken, accepted, or executed by an individual; and

(b) A trust company, upon becoming a member of the Federal Reserve System, shall continue to have such powers as may then or thereafter be conferred upon it by the laws of this state, subject to such federal rules, regulations, and laws as may govern state banks exercising trust powers or trust companies which become members of the Federal Reserve System.

article: 5. Miscellaneous

path: 1.1. BANKING > 16. Trust Companies > 5. Miscellaneous


citation: FIN § 1601

text:
For the purposes of this chapter, all trusts and other business permitted to be accepted or executed by a trust company are hereby classified and defined as either court trusts or private trusts.

A “court trust” is one in which a trust company acts under appointment, order, or decree of any court, as executor, administrator, guardian, conservator, assignee, receiver, depositary, or trustee, or in which it receives on deposit money or property from a public administrator, under any provision of this code, or from any executor, administrator, guardian, assignee, receiver, depositary, or trustee, under any order or decree of any court.

A “private trust” is every other trust, agency, fiduciary relationship, or representative capacity.

article: 5. Miscellaneous


citation: FIN § 1602

text:
A trust company, its officers and employees, shall not disclose any information to any person concerning the existence, condition, management, and administration of any private trust confided to it, except:

(a) Where such disclosure is specifically authorized by the terms of the trust.

(b) Where such disclosure is determined by an officer of the trust company to be necessary in the administration of such trust.

(c) Where such disclosure is required by a court of competent jurisdiction or by a subpoena issued by an attorney pursuant to Section 1985 of the Code of Civil Procedure.

(d) Where such disclosure is made to, or upon the instructions of, any party executing the trust instrument.

(e) Where such disclosure refers to an irrevocable trust, to, or upon the instructions of, any beneficiary thereunder whether or not presently entitled to receive benefits therefrom.

(f) Where such disclosure is made to the commissioner in the course of an examination.

article: 5. Miscellaneous


citation: FIN § 1603

text: The commissioner shall examine the court trust business of a trust company at least once every 24 months and shall examine the private trust business at such times and to such extent as he or she may deem necessary or advisable.

article: 5. Miscellaneous


citation: FIN § 1604

text: In making the reports to the commissioner required by this division, every trust company shall report, in addition to the other facts called for, separately, the amount of real property and the amount of personal property held by such trust company in both its court trusts and in its private trusts.

article: 5. Miscellaneous


citation: FIN § 1605

text:
Any court having jurisdiction of any executor, administrator, guardian, conservator, assignee, receiver, depositary, or trustee, upon the application of any such officer or trustee or upon the application of any person having an interest in the estate or property administered by such officer or trustee, after such notice to the other parties in interest as the court may direct, or without notice if all parties in interest consent thereto, and after a hearing upon such application, may authorize or direct such officer or trustee, whether such person has duly qualified or not, to deposit any moneys then in his hands or which may come into his hands thereafter, and such portion or all of the personal assets of such estate as the court shall deem proper for safekeeping, with any such trust company. Upon such deposit being made the court shall by an order of record reduce the bond to be given, or theretofore given, by such officer or trustee so as to cover only the estate remaining in the hands of such officer or trustee. The money and property so deposited shall thereupon and thereafter be held by such trust company under the order and direction of the court.

Such trust company shall not be required to give any bond or security, except as provided in this division, in case of any deposit of moneys or other personal assets with it under this section. Its responsibility for the safekeeping of personal assets so deposited with it shall be that of a bailee for hire.

article: 5. Miscellaneous


citation: FIN § 1606

text: Securities held by a trust company by direction of any court order issued pursuant to Section 1605 may be deposited in a securities depository, as defined in Section 30004, which is licensed under Section 30200 or exempted from licensing thereunder by Section 30005 or 30006.

article: 5. Miscellaneous


citation: FIN § 1607

text: Whenever an executor, administrator, guardian or conservator of estates, assignee, receiver, depositary, or trustee is required to qualify by taking and subscribing an oath or to make an affidavit, any trust company acting in any such capacity may satisfy such requirement by the oath or affidavit of its president, vice president, secretary, assistant secretary, manager, trust officer, or assistant trust officer. Any such trust company shall be liable for its failure to perform any of the duties required by law to be performed by an individual acting in like capacity and shall be subject to the same penalties for such failure as would be applicable to an individual.

article: 5. Miscellaneous


citation: FIN § 1608

text: Whenever any corporation desires to withdraw from and discontinue doing a trust business, it shall furnish to the commissioner satisfactory evidence of its release and discharge from all the obligations and trusts which it has assumed or which have been imposed on it by law. Thereupon the commissioner shall revoke his or her certificate of authority to do a trust business, and the State Treasurer shall return to it all of the securities deposited by it. Thereafter such corporation shall not be permitted to use and shall not use the word “trust” in its corporate name, or in connection with its business.

article: 5. Miscellaneous


citation: FIN § 1609

text: The validity or legality of any act or proceeding done or taken by any trust company, relating to or in connection with the administration of its court and private trusts, shall not be affected or impaired by the neglect or failure of such trust company, or of any officer or employee thereof, to comply with any of the provisions of this division. All such acts and proceedings done or taken prior to the revocation of its certificate of authority to do a trust business by the commissioner, under the provisions of this division, or the revocation by any court or judge thereof of the appointment, order, or decree theretofore entered in such trust matter, shall be as valid and effective for all purposes as if any such neglect or failure had not occurred.

article: 5. Miscellaneous


citation: FIN § 1610

text: Nothing in this chapter shall make it unlawful for any person or corporation to engage in the business of receiving and holding money in escrow or of acting as trustee under deeds of trust given solely for the purpose of securing obligations for the repayment of money other than corporate bonds.

article: 5. Miscellaneous


citation: FIN § 1611

text: A bank or trust company shall not mingle trust funds received by it with other assets of the corporation or association and such funds shall not be used in the conduct of its business except to the extent that such funds are deposited with the same corporation or association in accordance with the provisions of this division. Any officer of any bank or association who knowingly violates or consents to the violation of this section is guilty of a felony.

article: 5. Miscellaneous


citation: FIN § 1612

text: Notwithstanding any other provision of law, any bank and any trust company holding securities in a fiduciary capacity or while engaged in a trust business, or while acting in any capacity under a court or private trust, or while acting in that capacity with one or more persons as cofiduciary or cofiduciaries, unless the instrument creating the trust contains a provision to the contrary, is authorized to deposit or arrange for the deposit of the securities in a securities depository, as defined in Section 30004, which is licensed under Section 30200 or exempted from licensing thereunder by Section 30005 or 30006. When securities are so deposited, they may be held in the custody of the securities depository in which they are deposited or in the custody of any other securities depository so licensed or exempted and in which the securities depository in which the securities were deposited maintains an account, or in the custody of any bank or trust company with authority to accept custody of the securities, that accepts custody of the securities on behalf of a securities depository. The securities may be held in the name of the nominee of the securities depository in which they are deposited, or in the name of the nominee of any other securities depository with which the securities depository in which they are deposited maintains an account. The custodian of securities so deposited may merge certificates representing securities of the same class of the same issuer and may hold those certificates in bulk with any other securities deposited in any securities depository by any person regardless of the ownership of the securities, and certificates of small denomination may be merged into one or more certificates of larger denomination. Any bank or trust company that deposits or arranges for the deposit of the securities in a securities depository shall maintain records that at all times show the ownership of the deposited securities. A bank or trust company depositing securities pursuant to this section shall be subject to such rules and regulations as in the case of state chartered institutions, the commissioner and, in the case of national banking associations, the Comptroller of the Currency may from time to time issue. This section shall apply to securities now held or hereafter held by a bank or trust company in the above designated capacities. A bank or trust company may, but shall not be required to, own capital stock of a securities depository in which it deposits securities pursuant to this section.

article: 5. Miscellaneous


citation: FIN § 1613

text: Notwithstanding any other provision of law, any bank and any trust company holding securities in a fiduciary capacity or while engaged in a trust business, or while acting in any capacity under a court or private trust, or while acting in that capacity with one or more persons as cofiduciary or cofiduciaries, unless the instrument creating the trust contains a provision to the contrary, is authorized to deposit or arrange for the deposit with a federal reserve bank of any such securities the principal and interest of which the United States or any department, agency, or instrumentality thereof has agreed to pay, or has guaranteed payment, to be credited to one or more accounts on the books of the federal reserve bank in the name of the bank or trust company, to be designated fiduciary or safekeeping accounts, to which accounts other similar securities may be credited. Any bank or trust company that deposits or arranges for the deposit of securities pursuant to this section shall maintain records that at all times show the ownership of the securities deposited. A bank or trust company depositing securities pursuant to this section shall be subject to such rules and regulations as in the case of state-chartered institutions, the commissioner and, in the case of national banking associations, the Comptroller of the Currency, may from time to time issue. Ownership of, and other interests in, the securities credited to such account may be transferred by entries on the books of the federal reserve bank without physical delivery of any securities. A bank or trust company acting as custodian for a fiduciary shall, on demand by the fiduciary, certify in writing to the fiduciary the securities deposited by the bank or trust company pursuant to this section for the account of the fiduciary. A fiduciary shall, on demand by any party to its accounting, certify in writing to that party the securities deposited for its account as a fiduciary pursuant to this section. This section shall apply to all fiduciaries and custodians for fiduciaries, acting on the effective date of this section or who thereafter may act regardless of the state of the instrument or court order by which they are appointed.

article: 5. Miscellaneous


citation: FIN § 1620

text:
Notice to a bank operating a safety deposit department or to a company conducting a safety deposit business of an adverse claim (the person making the adverse claim being hereafter in this section called “adverse claimant”) to any personal property in a safe-deposit box maintained by a bank or company and rented to any person, or to any personal property held by the bank or company in safekeeping or storage for any person shall be disregarded, and the bank or company, notwithstanding such notice, shall permit access to the box to the person to whom it is rented or shall deliver the contents thereof to or on the order of the person or shall deliver the property held in storage or safekeeping to or on the order of the person for whom it is held, without any liability on the part of the bank or company; subject, however, to the exceptions provided in subdivisions (a) and (b) of this section:

(a) If an adverse claimant delivers to the bank at the office at which the safe-deposit box is maintained or the property is held his or her affidavit stating that of his or her own knowledge the person in whose name the box stands or for whom the property is held is a fiduciary for the adverse claimant and that he or she has reason to believe that fiduciary is about to misappropriate the contents of the box or the property, and stating the facts upon which the claim of fiduciary relationship and the belief are founded, the bank or company shall refuse access to the safe-deposit box or refuse to deliver the personal property for a period of not more than three court days (including the day of delivery) from the date that the bank or company received the adverse claimant’s affidavit, without liability on its part and without liability for the sufficiency or truth of the facts alleged in the affidavit.

(b) If at any time, either before, after, or in the absence of the filing of an affidavit by the adverse claimant, the adverse claimant procures and serves upon the bank or company at the office at which the safe-deposit box is maintained or the property is held a restraining order, injunction, or other appropriate order against the bank or company from a court of competent jurisdiction in an action in which the adverse claimant and all persons in whose names the box stands or for whom the property is held are parties, the bank or company shall comply with that order or injunction, without liability on its part.

(c) The provisions of this section shall be applicable even though the name of the person appearing on the bank’s or company’s books as the renter of the box or as the depositor of the property held in storage or safekeeping is modified by a qualifying or descriptive term such as “agent,” “trustee,” or other word or phrase indicating that the person may not be the owner in his or her own right of the contents of the box or of the property held in storage or safekeeping.

(d) Before giving access to any safe-deposit box, the bank or company may demand payment to it of all costs and expenses of opening the safe-deposit box and all costs and expenses of repairing any damage to the safe-deposit box caused by the opening thereof.

(e) Notwithstanding subdivisions (a) and (b), if a central location has been designated by the bank pursuant Section 684.115 of the Code of Civil Procedure for service of legal process, as that term is defined in Section 684.110 of the Code of Civil Procedure, the adverse claimant shall serve a notice of adverse claim or related affidavit, order, injunction, or other order contemplated herein at the central location. If a central location has not but should have been designated by the bank pursuant Section 684.115 of the Code of Civil Procedure for service of legal process, as that term is defined in Section 684.110 of the Code of Civil Procedure, the adverse claimant may serve a notice of adverse claim or related affidavit, order, injunction, or other order contemplated herein at any branch or office of the institution located in this state.

history: (History: Amended by Stats. 2012, Ch. 484, Sec. 14. (AB 2364) Effective January 1, 2013.)

chapter: 17. Safe Deposit

article: 1. General Provisions

path: 1.1. BANKING > 17. Safe Deposit > 1. General Provisions


citation: FIN § 1630

text: Every bank conducting a safe-deposit business shall be entitled to the special remedies set forth in this article in enforcing the liabilities of safe-deposit box renters and of safekeeping and storage depositors.

article: 2. Remedies for Nonpayment of Rent

path: 1.1. BANKING > 17. Safe Deposit > 2. Remedies for Nonpayment of Rent


citation: FIN § 1631

text: If the rental of any safe-deposit box is not paid within six months from the day it is due, the bank, or at any time thereafter and while such rental remains unpaid, may mail a notice to the person in whose name such box stands on its records stating that if the amount due for such rental is not paid on or before a specified day, which must be at least 30 days after the date of mailing such notice, the bank will cause such box to be forced open.

article: 2. Remedies for Nonpayment of Rent


citation: FIN § 1632

text: At any time after the date specified in such notice, if the rental for such safe-deposit box to the date of payment and the cost of giving such notice have not been paid, the bank, in the presence of two of its employees, one of whom shall be an officer of the bank, may cause such box to be opened and the contents thereof to be removed and inventoried. The inventory shall be signed by such persons.

article: 2. Remedies for Nonpayment of Rent


citation: FIN § 1633

text:
The following persons, and no others, are entitled to receive from the bank a copy of the inventory:

(a) An executor of the decedent’s will.

(b) The administrator of the decedent’s estate.

(c) The attorney for the executor or administrator.

(d) A tenant of the safe-deposit box.

(e) Any heir of the decedent or beneficiary under the decedent’s will.

(f) Any person whom the superior court having jurisdiction by order directs should be allowed to obtain a copy of the inventory.

article: 2. Remedies for Nonpayment of Rent


citation: FIN § 1634

text: All contents removed from a safe-deposit box pursuant to Section 1632 shall be retained by the bank for at least two years unless sooner delivered to or on the order of the person in whose name such box stood on the records of the bank. The bank shall deliver the contents of such box to or on the order of the person in whose name such box stood on its records, upon payment to it before such contents are sold or destroyed, of all rental due at the time of opening the box, the cost of giving notice, the charges for opening the box and for custody of the contents, and any other proper charges. The bank may deliver such contents on the order of the person in whose name such box stood on its records, irrespective of any information disclosed by the contents indicating ownership thereof by any other person.

article: 2. Remedies for Nonpayment of Rent