text:
(a) For any licensee, a disciplinary action taken by the State of California, another state, an agency of the federal government, or another country for an action substantially related to the activity regulated under this division may be grounds for disciplinary action by the commissioner. A certified copy of the record of the disciplinary action taken against the licensee by the State of California, other state, agency of the federal government, or other country shall be conclusive evidence of the events related therein.

(b) Nothing in this section shall preclude the commissioner from applying a specific statutory provision in this division providing for discipline against a licensee as a result of disciplinary action taken against a licensee by the State of California, another state, an agency of the federal government, or another country.

history: (History: Added by Stats. 2003, Ch. 473, Sec. 16. Effective January 1, 2004.)


kind: section

code: FIN

text:
(a) A schedule of the fees charged by a licensee shall be posted in a conspicuous place in the place of business of the licensee and its agents. A licensee and its agents shall not charge fees in excess of the posted fees.

(b) Each licensee and its agents shall prominently post on the premises of each office of the licensee and on the premises of each agent, a notice clearly stating that checks or money orders issued by the licensee or its agents are not insured by the federal government, the state government, or any other public or private entity. This notice shall be printed in English and in the same language principally used by the licensee or any agent of the licensee to advertise, solicit, or negotiate, either orally or in writing, with respect to the purchase of checks or money orders. The information required in this notice shall be clear, legible, and in letters not less than one-half inch in height. The notice shall be posted in a conspicuous location in the unobstructed view of the public within the premises. In those locations operated by an agent of the licensee, the agent, and not the licensee, shall be responsible for the failure to properly post the required notice.

history: (History: Amended by Stats. 1992, Ch. 869, Sec. 8. Effective January 1, 1993.)

chapter: 4. Licensee Regulations

path: 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS > 4. Licensee Regulations


text: A licensee under this division shall not sell checks payable to bearer, to cash, or to the purchaser, but a licensee may sell a check in which the name of the payee is not designated in any way if the check does not exceed one hundred fifty dollars ($150) in amount.

history: (History: Amended by Stats. 1955, Ch. 774.)

division: 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS


text: No licensee shall advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast, in any manner whatsoever, any statement or representation which is false, misleading, or deceptive, or which omits to state material information, or which refers to the supervision of such licensee by the State of California or any department or official thereof. The commissioner may order any licensee to desist from any conduct which he shall find to be a violation of the foregoing provisions.

history: (History: Added by Stats. 1951, Ch. 257.)


text:
An agreement between one licensed to engage in the business of selling checks, drafts, money orders, or other commercial paper serving the same purpose, and one undertaking to act in that business as an agent of the licensee, shall be in writing.

Such a licensee shall not pay such an agent any compensation as consideration for becoming an agent, other than that specified in their written agency agreement, in any manner, directly or indirectly, or by any method, practice or device whatsoever.

The commissioner may order any licensee to desist from any conduct which the commissioner shall find to be a violation of the foregoing provisions of this section.

history: (History: Amended by Stats. 1983, Ch. 660, Sec. 11.)


text: Nothing in this chapter shall be construed as authorizing the examination, inspection or auditing of the books and records of any client of a business agent while such books and records are in the possession of the business agent without the express consent of the client.

history: (History: Added by Stats. 1957, Ch. 498.)


text:
The total charges received by a prorater, or any other person for the prorater’s services, may not exceed in the aggregate twelve percent (12%) for the first three thousand dollars ($3,000), eleven percent (11%) for the next two thousand dollars ($2,000), and ten percent (10%) for any of the remaining payments distributed by a prorater to the creditors of a debtor, except for payments made on recurrent obligations. Recurring obligations shall be defined for the purpose of this section as follows: current rent payments, current utility payments, current telephone bills, current alimony payments, current monthly insurance premium payments, and payments made on obligations which are secured by a first mortgage or first deed of trust on real property.

(a) Notwithstanding the provisions of Section 12315, upon compliance with the provisions of Sections 12315.1, and 12320, an origination fee of a sum not to exceed fifty dollars ($50) may be charged;

(b) A fee not to exceed four dollars ($4) per disbursement on recurring obligations, consisting of current rent payments or obligations which are secured by a first mortgage or first trust deed on real property, may be charged.

(c) A fee not to exceed one dollar ($1) on other recurring obligations.

When a debtor has not canceled or defaulted on the performance of his contract with the prorater within 12 months after execution of the prorate contract, the prorater shall refund any origination fee charged to the debtor. At least once each month the prorater shall pay not less than 70 percent of all funds received from the debtor to the creditors of the debtor.

history: (History: Amended by Stats. 1972, Ch. 999.)


text: A cancellation fee or termination penalty may not be charged to a debtor.

history: (History: Added by Stats. 1972, Ch. 999.)


text: A prorater shall not receive any fee unless he has the consent of at least 51 percent of the total amount of indebtedness and of the number of creditors listed in the prorater’s contract with the debtor, or such like number of creditors have accepted a distribution of payment.


text: A prorater shall notify, in writing, all creditors listed in the prorate contract of the debtors desire to engage the services of the prorater within five days of the effective date of the contract as defined in Section 12320. The notification shall include a notice as to the proposed monthly payment to be made to the creditor. Every contract between a prorater and a debtor shall list every debt to be prorated with the creditor’s name, and disclose the total of all such debts.


text: If a prorater contracts for, receives or makes any charge in excess of the maximum permitted by this division, except as the result of an accidental and bona fide error, the prorater’s contract with the debtor shall be void and the prorater shall return to the debtor all charges received from the debtor.


text: A prorater shall not purchase from a creditor any obligation of a debtor.


text:
A prorater shall not take:

(a) Any contract, promise to pay, or other instrument which has any blank spaces when signed by a debtor;

(b) Any negotiable instrument for the prorater’s charges;

(c) Any note, wage assignment, real estate or chattel mortgage, or other security to secure the prorater’s charges;

(d) Any confession of judgment or power of attorney to confess judgment against the debtor or to appear for the debtor in a judicial proceeding.

(e) Concurrent with the signing of the contract or as part of the contract or as part of the application for the contract a release of any obligation to be performed on the part of the prorater.


text:
Every contract between a prorater and a debtor shall:

(a) List every debt to be prorated with the creditor’s name and disclose the total of all such debts;

(b) Provide payments reasonably within the ability of the debtor to pay in precise terms;

(c) Disclose in precise terms the rate and amount of the prorater’s charge;

(d) Disclose the approximate number and amount of installments required to pay the debts in full;

(e) Disclose the name and address of the prorater and of the debtor;

(f) Contain such other provision or disclosures as the commissioner shall determine is necessary for the protection of the debtor and the proper conduct of business by a prorater.


text: A prorater shall deliver a copy of any contract or agreement between the prorater and a debtor to the debtor immediately after the debtor executes it, and the debtor’s copy shall be executed by the prorater. A contract shall not be effective until a debtor has made a payment to the prorater for distribution to his creditors.


text: Unless paid by check or money order a prorater shall deliver a receipt to a debtor for each payment within five (5) days after receipt of a payment.


text: At least once in each six (6) months, the prorater shall render an accounting to the debtor which shall itemize the total amount received from the debtor, the total amount paid to each creditor, the total amount which any creditor has agreed to accept as payment in full on any debt owed him by the debtor, the amount of charges deducted, and any amount held in reserve. A prorater shall in addition render such an account to a debtor within seven days after written demand.


text: A prorater shall not lend money or credit.


text:
A prorater shall not:

(a) Offer, pay, or give any cash, fee, gift, bonus, premium, reward, or other compensation to any person for referring any prospective customer to the prorater;

(b) Receive any cash, fee, gift, bonus, premium, reward, or other compensation from any person other than the debtor in connection with his activities as a prorater.


text: A prorater shall not solicit or require a debtor to purchase or agree to purchase any policy of insurance.


text: A special prorater shall not advertise in any manner or otherwise hold himself out to the public as a general prorater or as qualified to do business as a general prorater unless he holds a valid unrevoked general proraters license.


text:
Nothing in this division shall be deemed to authorize the performance, directly or indirectly, of an act or acts constituting the practice of law by a prorater, business agent, check seller, or by any person, firm, corporation or organization described, or engaging in a transaction specified in subdivision (a), (b), (d), (e), (f), (g), or (h) of Section 12100.

Without limiting the generality of the foregoing and other applicable laws, the following act or acts, when done by the owner, manager or employee of a prorater, in connection with a prorating transaction, shall be deemed to constitute the unlawful practice of law:

(a) Preparation, advising or signing of a release of attachment or garnishment, stipulation, affidavit for exemption, compromise agreement or other legal or court document;

(b) The furnishing of legal advice or performance of legal services of any kind.

No prorater (including an owner, manager or employee of a prorater) shall (1) represent that he or she is authorized or competent to furnish legal advice or perform legal services; (2) assume authority on behalf of creditors or a debtor or accept a power of attorney authorizing it to employ or terminate the services of an attorney or to arrange the terms of or compensate for such services; (3) communicate with the debtor or creditor or any other person in the name of an attorney or upon the stationery of an attorney or prepare any form or instrument which only attorneys are authorized to prepare.

history: (History: Amended by Stats. 1983, Ch. 660, Sec. 12.)


text:
(a) No collection agency may be maintained in the same premises as a prorating organization unless such prorating organization is exempt under the provisions of this division.

(b) No prorater’s license shall be issued to a collection agency.


text: It shall be unlawful for any prorater to disclose the list of creditors of a debtor to any individual or firm for the purpose of soliciting the accounts and such disclosure shall be ground for revocation of license.


text: The commissioner shall have power and authority to promulgate rules and regulations governing the form and wording of advertising to be used by proraters. The issuance, distribution or placement of any advertising by a prorater which is in conflict with such rules and regulations shall be ground for the revocation of its license.


text: Within the organization of each prorater corporation, either as an owner, officer, or employee, there shall be one or more persons possessing a minimum of five years experience in consumer credit extension or credit collection activity. At least one such qualified person shall be stationed on duty at each business location during the time the location is open for business.

history: (History: Repealed and added by Stats. 1972, Ch. 1285.)


text:
(a) It is unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division.

(b) It is unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination, with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division.

history: (History: Added by Stats. 2007, Ch. 101, Sec. 15. Effective January 1, 2008.)


text:
The commissioner may, upon reasonable opportunity to be heard, suspend or revoke any license issued pursuant to this division, if he finds that:

(a) The licensee has failed to report within 10 days the establishment of a mobile unit, branch office, or agency location, or has failed upon demand of the commissioner pursuant to Section 12301.4 of this code to terminate and cancel any agency.

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

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

history: (History: Amended by Stats. 1968, Ch. 869.)

chapter: 5. Revocation of Licenses

path: 3. CHECK SELLERS, BILL PAYERS, AND PRORATERS > 5. Revocation of Licenses


text: The commissioner may upon three days’ notice and a hearing, suspend any license for a period not exceeding 30 days, pending investigation.

history: (History: Enacted by Stats. 1951, Ch. 364.)


text: The commissioner may by order summarily suspend or revoke the license of a licensee who fails to pay the license fee prescribed by Section 12214 within 10 days after notice by the commissioner that such fee is due and payable. If, after such an order is made, a request for hearing is filed in writing and hearing is not held within 60 days thereafter, the order is rescinded as of its effective date.

history: (History: Amended by Stats. 1972, Ch. 644.)


text: Except where a shorter time for setting the hearing is prescribed in this division, all hearings under this division shall be conducted in accordance with Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code and in all cases the commissioner shall have all the powers granted therein.


text: Every order, decision, license, or other official act of the commissioner is subject to review in accordance with law.


text:
(a) The commissioner may, after appropriate notice and opportunity for hearing, by order, censure or suspend for a period not exceeding 12 months, or bar from any position of employment, management, or control any licensee, any nonprofit community service organization subject to Section 12104, or any other person, if the commissioner finds either of the following:

(1) That the censure, suspension, or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, which violation was either known or should have been known by the person committing or causing it or has caused material damage to the licensee, nonprofit community service organization, or to the public.

(2) That the person has been convicted of or pleaded nolo contendere to any crime, or has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense involving dishonesty, fraud, or deceit, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the business in accordance with the provisions of this division.

(b) Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Division 3 of Title 2 of the Government Code). Upon receipt of a request, the matter shall be set for hearing to commence within 30 days after such receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of such notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing.

(c) Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure or exempt from licensure under Section 12104 of the law.

(d) Persons suspended or barred under this section are prohibited from participating in any business activity of a licensee or a person exempt from licensure under Section 12104 and from engaging in any business activity on the premises where a licensee or a person exempt from licensure under Section 12104 is conducting business.

history: (History: Added by Stats. 2007, Ch. 101, Sec. 16. Effective January 1, 2008.)


text: It is the intent of the Legislature in enacting this division to enhance the safety of consumers using automated teller machines in California without discouraging the siting of automated teller machines in locations convenient to consumers’ homes and workplaces. Since decisions concerning safety at automated teller machine sites are inherently subjective and because safety is a relative matter, the Legislature intends to establish as the standard of care applicable to operators of automated teller machines, in connection with user safety, the substantial compliance with the objective standards of Chapter 4 (commencing with Section 13040), the information requirements of Chapter 5 (commencing with Section 13050), and the good faith consideration of other safety issues as prescribed in Chapter 3 (commencing with Section 13030). The Legislature further recognizes the need for uniformity as to the establishment of automated teller machine safety standards and intends with this division to supersede and preempt any rule, regulation, code, statute, or ordinance of any city, county, city and county, municipality, or local agency regarding customer safety at automated teller machines in California.

history: (History: Added by Stats. 1990, Ch. 825, Sec. 1.)

chapter: 1. Intent

path: 4. AUTOMATED TELLER MACHINES: USER SAFETY > 1. Intent


text:
As used in this division:

(a) “Access area” means any paved walkway or sidewalk which is within 50 feet of an automated teller machine. The term does not include publicly maintained sidewalks or roads, as defined in Section 555 or Section 527 of the Vehicle Code.

(b) “Access device” shall have the same meaning as set forth in Federal Reserve Board Regulation E (12 C.F.R. Part 205), promulgated pursuant to the Electronic Fund Transfer Act (15 U.S.C. 1601 et seq.).

(c) “Automated teller machine” means any electronic information processing device located in California which accepts or dispenses cash in connection with a credit, deposit, or convenience account. The term does not include devices used solely to facilitate check guarantees or check authorizations, or which are used in connection with the acceptance or dispensing of cash on a person-to-person basis, such as by a store cashier.

(d) “Candlefoot power” means the light intensity of candles on a horizontal plane at 36 inches above ground level and five feet in front of the area to be measured.

(e) “Control” of an access area or defined parking area means to have the present authority to determine how, when, and by whom it is to be used, and how it is to be maintained, lighted, and landscaped.

(f) “Customer” means a natural person to whom an access device has been issued for personal, family, or household use.

(g) “Defined parking area” means that portion of any parking area open for customer parking which is (1) contiguous to an access area with respect to an automated teller machine; (2) regularly, principally, and lawfully used for parking by users of the automated teller machine while conducting automated teller machine transactions during hours of darkness; and (3) owned or leased by the operator of the automated teller machine or owned or controlled by the party leasing the automated teller machine site to the operator. The term does not include any parking area which is not open or regularly used for parking by users of the automated teller machine who are conducting automated teller machine transactions during hours of darkness. A parking area is not open if it is physically closed to access or if conspicuous signs indicate that it is closed. If a multiple level parking area satisfies the conditions of this subdivision and would therefore otherwise be a defined parking area, only the single parking level deemed by the operator of the automated teller machine to be the most directly accessible to the users of the automated teller machine shall be a defined parking area.

(h) “Hours of darkness” means the period that commences 30 minutes after sunset and ends 30 minutes before sunrise.

(i) “Operator” means any bank, savings association, credit union, industrial loan company, savings bank, or other business entity, or any person who operates an automated teller machine.

chapter: 2. Definitions

path: 4. AUTOMATED TELLER MACHINES: USER SAFETY > 2. Definitions


text:
On or before July 1, 1991, with respect to all existing installed automated teller machines in this state, and any automated teller machines installed after July 1, 1991, the operator shall adopt procedures for evaluating the safety of the automated teller machine. These procedures shall include a consideration of the following:

(a) The extent to which the lighting for the automated teller machine complies or will comply with the standards required by Chapter 4 (commencing with Section 13040).

(b) The presence of landscaping, vegetation, or other obstructions in the area of the automated teller machine, the access area, and the defined parking area.

(c) The incidence of crimes of violence in the immediate neighborhood of the automated teller machine, as reflected in the records of the local law enforcement agency and of which the operator has actual knowledge.

chapter: 3. Location and Installation

path: 4. AUTOMATED TELLER MACHINES: USER SAFETY > 3. Location and Installation


text: It is not the intent of the Legislature in enacting this chapter to impose a duty to relocate or modify automated teller machines upon the occurrence of any particular events or circumstances, but rather to establish a standard of good faith for the evaluation of all automated teller machines as provided herein.

division: 4. AUTOMATED TELLER MACHINES: USER SAFETY


text:
(a) Each operator of an automated teller machine installed on or after July 1, 1991, shall comply with Section 13041 commencing on the date the automated teller machine is installed. Compliance with Section 13041 by operators as to automated teller machines existing as of July 1, 1991, shall be optional until July 1, 1993, and mandatory thereafter. This subdivision shall apply to an operator of an automated teller machine only to the extent that the operator controls the access area or defined parking area to be lighted.

(b) If an access area or a defined parking area is not controlled by the operator of the automated teller machine, and if the person who leased the automated teller machine site to the operator controls the access area or defined parking area, the person who controls the access area or defined parking area shall comply with Section 13041 as to any automated teller machine installed on or after July 1, 1991, commencing on the date the automated teller machine is installed; and as to any automated teller machine existing as of July 1, 1991, no later than on July 1, 1993.

chapter: 4. Lighting

path: 4. AUTOMATED TELLER MACHINES: USER SAFETY > 4. Lighting


text:
The operator, owner, or other person responsible therefor, shall provide lighting during hours of darkness with respect to an open and operating automated teller machine and any defined parking area, access area, and the exterior of an enclosed automated teller machine installation according to the following standards:

(a) There shall be a minimum of 10 candlefoot power at the face of the automated teller machine and extending in an unobstructed direction outward five feet.

(b) There shall be a minimum of two candlefoot power within 50 feet from all unobstructed directions from the face of the automated teller machine. In the event the automated teller machine is located within 10 feet of the corner of the building and the automated teller machine is generally accessible from the adjacent side, there shall be minimum of two candlefoot power along the first 40 unobstructed feet of the adjacent side of the building.

(c) There shall be a minimum of two candlefoot power in that portion of the defined parking area within 60 feet of the automated teller machine.


text: Customers receiving access devices shall be furnished by the respective issuers thereof with notices of basic safety precautions which customers should employ while using an automated teller machine. This information shall be furnished by personally delivering or by mailing the information to each customer whose mailing address as to the account to which the access device relates is in this state. This information shall be furnished with respect to access devices issued on or after July 1, 1991, at or before the time the customer is furnished with his or her access device. With respect to a customer to whom an “accepted access device” (as defined in Federal Reserve Board Regulation E) has been issued prior to July 1, 1991, the information shall be delivered or mailed to the customer on or before December 31, 1991. Only one notice need be furnished per household, and if access devices are furnished to more than one customer for a single account or set of accounts or on the basis of a single application or other request for the access devices, only a single notice need be furnished in satisfaction of the notification responsibilities as to all those customers. The information may be included with other disclosures related to the access device furnished to the customer, such as with any initial or periodic disclosure statement furnished pursuant to the Electronic Fund Transfer Act.

chapter: 5. Consumer Education

path: 4. AUTOMATED TELLER MACHINES: USER SAFETY > 5. Consumer Education


text:
The provisions of this division shall not apply with respect to any automated teller machine which is:

(a) Located inside of a building, unless it is a freestanding installation which exists for the sole purpose of providing an enclosure for the automated teller machine.

(b) Located inside of a building, except to the extent a transaction can be conducted from outside the building.

(c) Located in any area, including any access area, building, enclosed space, or parking area which is not controlled by the operator.

chapter: 6. Exemptions

path: 4. AUTOMATED TELLER MACHINES: USER SAFETY > 6. Exemptions


text: This division supersedes and preempts all rules, regulations, codes, statutes, or ordinances of all cities, counties, cities and counties, municipalities, and local agencies regarding customer safety at automated teller machines located in California.

chapter: 7. Effect of Compliance

path: 4. AUTOMATED TELLER MACHINES: USER SAFETY > 7. Effect of Compliance


text:
(a) No operator of an automated teller machine (ATM) in this state shall impose any surcharge upon a customer for the usage of that machine whether or not the customer is using an access device issued by that operator unless that surcharge is clearly disclosed to the customer electronically on the automated teller machine. Unless the disclosure is made prior to the customer being obligated to pay the surcharge, the customer shall be provided an opportunity to cancel that transaction without incurring any surcharge. This subdivision does not apply to a point of sale transaction at an ATM.

(b) If the sale of a good or service is conducted at the ATM, the operator of that ATM shall disclose to the customer electronically on the ATM the total price of the good or service and any fee charged solely for the usage of the ATM. Unless the disclosure is made prior to the customer being obligated to pay for the good or service, the customer shall be provided with an opportunity to cancel the transaction without incurring any obligation.

(c) If a surcharge is imposed on a customer using an access device not issued by the operator, the operator shall disclose that the customer may also be charged an additional fee by his or her own institution.

(d) As used in this section, “operator,” “automated teller machine,” “customer,” and “access device” have the meanings set forth in Section 13020. The term “surcharge” means any charge imposed by the operator of the ATM solely for use of the ATM. The term “service” includes, but is not limited to, receiving a statement of account activity.

history: (History: Amended by Stats. 1996, Ch. 98, Sec. 1. Effective January 1, 1997. Operative July 1, 1997, by Sec. 2 of Ch. 98.)

division: 4.5. AUTOMATED TELLER MACHINE SURCHARGE DISCLOSURE


text:
(a) In enacting this section, the Legislature finds and declares all of the following:

(1) It is in the best interest of consumers in this state to be aware of fees they may be charged for using point-of-sale devices prior to being obligated to pay those fees.

(2) In 1996, the Legislature enacted Assembly Bill 3366 (Chapter 98 of the Statutes of 1996), which required operators of automatic teller machines (ATMs) to electronically disclose fees for transactions at those ATMs. That legislation did not require disclosure of fees at point-of-sale devices.

(3) In order to maximize consumer awareness of fees at point-of-sale devices, and to create equity between operators of ATMs and operators of point-of-sale devices, it is the intent of the Legislature in enacting this section to require the maximum feasible disclosure of fees at point-of-sale devices.

(b) No operator of a point-of-sale device in this state shall impose any fee upon a customer for the use of that device unless that fee is disclosed to the customer prior to the customer being obligated to pay for any goods or services. That disclosure shall be placed on or at the point-of-sale device as follows:

(1) For all point-of-sale devices, the fee disclosure shall be on a label meeting federal standards.

(2) For point-of-sale devices purchased on or after January 1, 2001, that have electronic displays, the fee disclosure shall also be electronic.

(c) For purposes of this section, the term “point-of-sale device” includes any device used for the purchase of a good or service where a personal identification number (PIN) is required, but does not include an access device as defined in subdivision (b) of Section 13020.

(d) For the purposes of this section, the term “operator of a point-of-sale device” means the person who imposes the fee on a customer for using a point-of-sale device to pay for a good or service.

history: (History: Amended by Stats. 1998, Ch. 485, Sec. 71. Effective January 1, 1999.)

path: 4.5. AUTOMATED TELLER MACHINE SURCHARGE DISCLOSURE


text:
(a) Whenever a point-of-sale system is changed or modified to include a video touch screen or any other nontactile keypad, the point-of-sale device that would include the video touch screen or nontactile keypad shall also be equipped with either of the following:

(1) A tactually discernible numerical keypad similar to a telephone keypad containing a raised dot with a dot base diameter between 1.5 millimeters and 1.6 millimeters and a height between 0.6 millimeters and 0.9 millimeters on the number 5 key that enables a visually impaired person to enter his or her own personal identification number or any other personal information necessary to process the transaction in a manner that provides the opportunity for the same degree of privacy input and output available to all individuals.

(2) Other technology, such as a radio frequency identification device, fingerprint biometrics, or some other mechanism that enables a visually impaired person to access the video touch screen device with his or her personal identifier and to process his or her transaction in a manner that provides the opportunity for the same degree of privacy input and output available to all individuals.

(b) (1) On or before January 1, 2010, any existing point-of-sale system, except as provided in paragraph (2), that includes a video touch screen or any other nontactile keypad shall also be equipped with a tactually discernable keypad or other technology as described in subdivision (a).

(2) At locations equipped with two or less point-of-sale machines, only one point-of-sale machine shall be required to be equipped with a tactually discernible keypad or other technology on or before January 1, 2010, as described in subdivision (a).

(c) On and after January 1, 2006, a manufacturer or distributor shall be required to offer for availability touch screen or other nontactile point-of-sale devices to be used and sold in this state that are equipped with tactually discernible keypads or other technology as described in subdivision (a) that enable a visually impaired person to enter his or her own personal identification number or any other personal information necessary to process a transaction in a manner that ensures personal privacy of the information being entered.

(d) As used in this section, “point-of-sale device” includes any device used by a customer for the purchase of a good or service where a personal identification number (PIN) is required, but does not include the following:

(1) An automated teller machine as defined in subdivision (c) of Section 13020.

(2) A point-of-sale device that is equipped to, or exclusively services, motor fuel dispensers.

(e) A unit is not in compliance with this section unless it includes a device, whether internal or external to the unit, that does not lend itself to easy removal, allows visually impaired users easy access, and otherwise meets the terms and conditions of this section. If the device is freestanding, it shall be permanently attached to the unit by means of a braided wire or some other tether.

(f) This section shall not be construed to preclude or limit any other existing right or remedy as it pertains to point-of-sale devices and accessibility.

history: (History: Amended by Stats. 2005, Ch. 49, Sec. 1. Effective January 1, 2006.)


text:
(a) Subject to the requirements of Section 13080, an agreement to operate or share an automated teller machine may not prohibit, limit, or restrict the right of the operator or owner of the automated teller machine to charge a customer conducting a transaction using an account from a financial institution that is located outside the United States an access fee or surcharge not otherwise prohibited under state or federal law.

(b) Notwithstanding subdivision (a), nothing in this section shall be construed to prohibit or otherwise limit the ability of an operator or owner of an automated teller machine to voluntarily enter into an agreement regarding participation in a surcharge free network.

(c) For purposes of this section, the terms “operator” and “automated teller machine” have the meanings set forth in Section 13020.

(d) For the purposes of this section, the term “owner” means any entity that is not an operator under Section 13020, but that owns an automated teller machine.

history: (History: Added by Stats. 2005, Ch. 256, Sec. 1. Effective January 1, 2006.)


text: This division shall be known as the “California Credit Union Law.”

history: (History: Repealed and added by Stats. 1979, Ch. 112.)

division: 5. CREDIT UNIONS

chapter: 1. General Provisions

article: 1. Definitions

path: 5. CREDIT UNIONS > 1. General Provisions > 1. Definitions


text: The definitions given in this division govern the construction of this division unless the context otherwise requires.

article: 1. Definitions


text: This division is applicable to any person, other than a federal credit union engaging in the business of a credit union in this state. For purposes of this division, “person” shall have the meaning set forth in Section 5065 of the Corporations Code.

history: (History: Added by Stats. 2002, Ch. 734, Sec. 3. Effective September 20, 2002.)

article: 1. Definitions


text: If and to the extent that any provision of this division is preempted by federal law, the provision shall not apply and shall not be enforced.

history: (History: Added by Stats. 2002, Ch. 734, Sec. 4. Effective September 20, 2002.)

article: 1. Definitions


text: A credit union is a cooperative, organized for the purposes of promoting thrift and savings among its members, creating a source of credit for them at rates of interest set by the board of directors, and providing an opportunity for them to use and control their own money on a democratic basis in order to improve their economic and social conditions. As a cooperative, a credit union conducts its business for the mutual benefit and general welfare of its members with the earnings, savings, benefits, or services of the credit union being distributed to its members as patrons.

history: (History: Amended by Stats. 1984, Ch. 209, Sec. 1.)

article: 1. Definitions


text:
(a) Except as provided in subdivision (b), all provisions of law applicable to nonprofit mutual benefit corporations generally (including, but not limited to, the Nonprofit Mutual Benefit Corporation Law (Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code)) shall apply to credit unions. However, whenever any provision of this division applicable to credit unions is inconsistent with any provision of law applicable to nonprofit mutual benefit corporations generally, the provision of this division shall apply and the inconsistent provision of law applicable to nonprofit mutual benefit corporations generally shall not apply to a credit union.

(b) Notwithstanding the provisions of subdivision (a), the following provisions of the Corporations Code are not applicable to credit unions:

(1) Section 7131.

(2) Subdivision (a) of Section 7132.

(3) Section 7142.

(4) Subdivision (c) of Section 7223.

(5) Subdivision (c) of Section 7225.

(6) Article 4 (commencing with Section 7240) of Chapter 2 of Part 3 of Title 1.

(7) Chapter 11 (commencing with Section 8110) of Part 3 of Division 2 of Title 1.

(8) Chapter 16 (commencing with Section 8610) of Part 3 of Division 2 of Title 1.

(9) Chapter 17 (commencing with Section 8710) of Part 3 of Division 2 of Title 1.

history: (History: Added by Stats. 2002, Ch. 734, Sec. 5. Effective September 20, 2002.)

article: 1. Definitions


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

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 114. (SB 1498) Effective January 1, 2023.)

article: 1. Definitions


text: “Impaired capital” means that the losses or projected losses of a credit union are such that the book value of a member’s share is reduced below 100 percent of the monetary amount of that share when initially purchased plus any accumulated dividends.

history: (History: Added by Stats. 1982, Ch. 716, Sec. 1.)

article: 1. Definitions


text: Unless otherwise defined in this division, “insolvent” means a credit union has ceased to pay its debts in the ordinary course of business, or cannot pay its debts as they become due, or is insolvent within the meaning of the federal bankruptcy law.

history: (History: Added by Stats. 1982, Ch. 716, Sec. 2.)

article: 1. Definitions


text: “Credit manager” means a natural person approved by the board of directors and employed by a credit union to supervise the lending activities of the credit union in accordance with the loan policies established by the board of directors and consistent with the applicable state and federal law and regulations. A credit manager may be but is not required to be a member of the credit union.

history: (History: Added by Stats. 1982, Ch. 691, Sec. 1.)

article: 1. Definitions


text: “Obligation” means any contractual obligation to the credit union for money borrowed or credit extended or guaranteed from its members, including, but not limited to, loans, lines of credit, agreements to extend credit, and lease agreements.

history: (History: Added by Stats. 1984, Ch. 789, Sec. 1.)

article: 1. Definitions


text: The use by any person, other than those authorized by this division, of any name or title which contains the phrase “credit union,” is a misdemeanor. Nonprofit associations, which are formed for the mutual benefit and protection of credit unions, by credit unions organized under this division, or under the provisions of the statutes of the United States applicable to credit unions or any nonprofit association formed for the mutual benefit and protection of credit union employees by bona fide employees of credit unions, may use the phrase “credit union” in the name or title designating any such association.

history: (History: Added by Stats. 1979, Ch. 112.)

article: 2. General

path: 5. CREDIT UNIONS > 1. General Provisions > 2. General


text: Any person who willfully and knowingly makes, circulates, or transmits to another or others any statement or rumor, written, printed or by word of mouth, which is untrue in facts and is directly or by inference derogatory to the financial condition or affects the solvency or financial standing of any credit union doing business in this state, or who knowingly counsels, aids, procures, or induces another to start, transmit, or circulate any such statement or rumor, is guilty of a misdemeanor and shall be punished by a fine of not more than one thousand dollars ($1,000) or by imprisonment for not more than one year, or both.

article: 2. General


text: In addition to the powers enumerated in this division, every credit union has the general powers conferred upon corporations by the Nonprofit Mutual Benefit Corporation Law of this state unless restricted by this division.

history: (History: Amended by Stats. 1981, Ch. 714, Sec. 131.)

article: 2. General


text:
(a) For purposes of this section, the following definitions apply:

(1) “Fee” means a nonsufficient funds fee or an overdraft fee.

(2) “Nonsufficient funds fee” means a fee resulting from the initiation of a transaction that exceeds the member’s available account balance if the member’s credit union declines to make the payment.

(3) “Overdraft fee” means a fee resulting from the processing of a transaction that exceeds a member’s available account balance.

(b) (1) A credit union shall provide a notice to a member each time the credit union assesses a fee that meets all of the following requirements:

(A) The notice shall be provided to the member using a communication method designated by the member for receiving this type of notice.

(B) The notice shall be provided on the same business day the transaction that resulted in the fee occurred, unless it is not feasible to provide the notice that day, in which case the notice shall be provided on the next business day.

(C) The notice shall contain all of the following:

(i) The date of the transaction.

(ii) The type of transaction.

(iii) Whether the transaction was declined or processed.

(iv) If applicable, the amount of the overdraft that results from the transaction.

(v) If applicable, the amount necessary to return the account to a positive balance.

(vi) If applicable, the consequences of not returning the account to a positive balance within a certain timeframe.

(vii) If applicable, the amount of time the member has to return the account to a positive balance to avoid the consequences described in clause (vi).

(2) If the account has more than one accountholder, provision of the notice described in paragraph (1) to any accountholder shall be sufficient.

(c) Beginning January 1, 2026, a credit union shall not charge a fee exceeding fourteen dollars ($14) or the amount set by the federal Consumer Financial Protection Bureau for the fee, whichever is lower.

history: (History: Added by Stats. 2024, Ch. 521, Sec. 1. (SB 1075) Effective January 1, 2025.)

article: 2. General


text:
(a) Credit unions shall be incorporated under the Nonprofit Mutual Benefit Corporation Law of this state.

(b) The Secretary of State shall not file the articles of incorporation of a credit union organized pursuant to subdivision (a) unless the approval of the commissioner is endorsed thereon.

(c) The Secretary of State shall not file articles of incorporation setting forth a name in which “credit union” or related words appear unless the approval of the commissioner is attached. This section shall not apply to the articles of any corporation subject to the California Credit Union Law on which the approval of the commissioner is endorsed.

history: (History: Amended by Stats. 2002, Ch. 734, Sec. 6. Effective September 20, 2002.)

chapter: 2. Formation

article: 1. Incorporation and Bylaws

path: 5. CREDIT UNIONS > 2. Formation > 1. Incorporation and Bylaws


text:
The articles of incorporation of every credit union shall set forth the following:

(a) The name of the corporation, which shall include the phrase “credit union.”

(b) (1) The following statement:

The purpose of the corporation is to engage in credit union business and any other lawful activities which are not prohibited to a credit union by applicable laws or regulations.

(2) By December 31, 2003, each credit union that immediately prior to the enactment of this section was authorized to operate as a credit union shall amend its articles to comply with the provisions of paragraph (1). Notwithstanding Section 7813.5 of the Corporations Code, the amendment of the articles of a credit union as required by paragraph (1) may be adopted by approval of the board alone.

(c) The name and street address in this state of the corporation’s initial agent for service of process in accordance with subdivision (b) of Section 8210 of the Corporations Code.

(d) The names and addresses of five or more persons appointed to act as initial directors.

(e) The street address of the corporation.

(f) The mailing address of the corporation, if different from the street address.

history: (History: Amended by Stats. 2012, Ch. 494, Sec. 53. (SB 1532) Effective January 1, 2013.)

article: 1. Incorporation and Bylaws


text:
(a) The articles shall be signed by each director named in the articles, acknowledged pursuant to Section 5030 of the Corporations Code and filed in the office of the Secretary of State.

(b) Corporate existence shall begin upon the filing of the articles and shall continue perpetually, unless otherwise expressly provided by law.

history: (History: Amended by Stats. 2002, Ch. 734, Sec. 8. Effective September 20, 2002.)

article: 1. Incorporation and Bylaws


text:
(a) The provisions of Section 14101, except as provided in subdivision (b) of that section, shall not apply to a credit union organized prior to January 1, 1981, but the articles of the credit union shall continue to be governed by the law applicable as of December 31, 1980, until an amendment of its articles pursuant to subdivision (b).

(b) Except as provided in subdivision (b) of Section 14101, a credit union organized prior to January 1, 1981, may amend its articles to conform to Section 14101 except that an initial agent for service of process shall not be set forth and the names and addresses of initial directors shall be deleted. The amendment may be adopted by the board of directors alone.

history: (History: Amended by Stats. 2002, Ch. 734, Sec. 9. Effective September 20, 2002.)

article: 1. Incorporation and Bylaws


text:
(a) Every credit union shall, within 90 days after the filing of its original articles and annually thereafter during the applicable filing period in each year, file, in a form prescribed by the Secretary of State, a statement containing: (1) the name of the credit union and the Secretary of State’s file number; (2) the names and complete business or residence addresses of its chief executive officers, secretary, and chief financial officer; (3) the street address of its principal office, if any; (4) if the credit union chooses to receive renewal notices and any other notifications from the Secretary of State by electronic mail instead of by United States mail, a valid electronic mail address for the credit union or for the credit union’s designee to receive those notices; and (5) the mailing address of the credit union, if different from the street address of its principal office.

(b) The statement required by subdivision (a) shall also designate, as the agent of the credit union for the purpose of service of process, a natural person residing in this state or any domestic or foreign business corporation that has complied with Section 1505 of the Corporations Code and whose capacity to act as an agent has not terminated. If a natural person is designated, the statement shall set forth that person’s complete business or residence street address. If a corporate agent is designated, no address for it shall be set forth.

(c) For the purposes of this section, the applicable filing period for a credit union shall be the calendar month during which its original articles were filed and the immediately preceding five calendar months. The Secretary of State shall provide a notice to each credit union to comply with this section approximately three months prior to the close of the applicable filing period. The notice shall state the due date for compliance and shall be sent to the last address of the credit union according to the records of the Secretary of State if the credit union has elected to receive notices from the Secretary of State by electronic mail. Neither the failure of the Secretary of State to provide the notice nor the failure of the credit union to receive it is an excuse for failure to comply with this section.

(d) Whenever any of the information required by subdivision (a) is changed, the credit union may file a current statement containing all the information required thereby. In order to change its agent for service of process or the address of the agent, the corporation must file a current statement containing all the information required by subdivisions (a) and (b). Whenever any statement is filed pursuant to this section, it supersedes any previously filed statement and the statement in the articles as to the agent for service of process and the address of the agent.

(e) An agent designated for service of process pursuant to subdivision (b) may deliver to the Secretary of State, on a form prescribed by the Secretary of State for filing, a signed and acknowledged written statement of resignation as an agent for service of process containing the name of the credit union and Secretary of State’s file number of the credit union, the name of the agent, and a statement that the agent is resigning. Thereupon the authority of the agent to act in such capacity shall cease and the Secretary of State forthwith shall notify the credit union of the filing of the statement of resignation.

(f) If a natural person who has been designated agent for service of process pursuant to subdivision (b) dies or resigns or no longer resides in the state, or if the corporate agent for such purpose resigns, dissolves, withdraws from the state, forfeits its right to transact intrastate business, has its corporate rights, powers, and privileges suspended or ceases to exist, the credit union shall forthwith file a new statement designating a new agent conforming to the requirements of subdivision (a).

(g) The resignation of an agent may be effective if, on a form prescribed by the Secretary of State containing the name of the credit union and Secretary of State’s file number for the credit union and the name of the agent for service of process, the agent disclaims having been properly appointed as the agent.

(h) The Secretary of State may destroy or otherwise dispose of any statement or resignation filed pursuant to this section after it has been superseded by the filing of a new statement.

(i) This section shall not be construed to place any person dealing with the credit union on notice of or in any duty to inquire about the existence or content of the statement filed pursuant to this section.

history: (History: Amended by Stats. 2014, Ch. 834, Sec. 49. (SB 1041) Effective January 1, 2015.)

article: 1. Incorporation and Bylaws


text:
(a) No amendment of the articles of a credit union shall become effective unless the certificate of amendment or other instrument setting forth the amendment is filed with the Secretary of State with the commissioner’s approval endorsed thereon. The amendment shall become effective upon being filed with the Secretary of State. Promptly after the amendment becomes effective, the credit union shall file with the commissioner a copy of the certificate of amendment or other instrument certified by the Secretary of State.

(b) An amendment of the articles set forth in an agreement of merger that requires the approval of the commissioner shall not be subject to the provisions of subdivision (a). An amendment meeting this criteria shall become effective at the time the merger becomes effective, pursuant to this division.

history: (History: Added by Stats. 2002, Ch. 734, Sec. 10. Effective September 20, 2002.)

article: 1. Incorporation and Bylaws


text:
(a) Amendments to the articles of incorporation of any credit union may be adopted by resolution of the board of directors, which is also adopted by a vote of a majority of the members of the credit union present, in person or by proxy, as provided in the credit union’s bylaws, at any regular or special meeting of the members for which notice of the proposed amendments has been given; provided, however, that a minimum vote of at least 10 percent of the entire membership entitled to vote on the question votes in favor of the amendment and those voting in favor of the amendment constitute a majority of the members participating in the vote.

(b) The commissioner may approve the amendment according to the resolution adopted by the board of directors if approved by less than 10 percent of the entire membership as provided in this section if the commissioner finds, upon the written and verified application filed by the board of directors, that (1) notice of the meeting called to consider the amendment or the ballot for written vote on the amendment was mailed to each member entitled to vote upon the question, (2) the notice or ballot disclosed the purpose of the meeting or the written vote, (3) the notice or ballot informed the membership that approval of the amendment might be sought pursuant to this section, and (4) a majority of the votes cast upon the question were in favor of the amendment.

(c) Notwithstanding subdivision (a) and Section 7812 of the Corporations Code, a credit union may amend its articles of incorporation to change its name with the approval of its board of directors and without the approval of its members.

history: (History: Amended by Stats. 1998, Ch. 539, Sec. 1. Effective January 1, 1999.)

article: 1. Incorporation and Bylaws


text:
(a) No restated articles of a credit union shall become effective unless the certificate setting forth the restated articles, with the commissioner’s approval endorsed thereon, is filed with the Secretary of State. The restated articles shall become effective upon being filed with the Secretary of State.

(b) Promptly after the restated articles become effective, the credit union shall file with the commissioner a copy of the certificate setting forth the restated articles, certified by the Secretary of State.

history: (History: Added by Stats. 2002, Ch. 734, Sec. 11. Effective September 20, 2002.)

article: 1. Incorporation and Bylaws


text:
(a) No certificate of correction of a credit union shall become effective unless the certificate, with the commissioner’s approval endorsed thereon, is filed with the Secretary of State. The certificate of correction shall become effective upon being filed with the Secretary of State.

(b) Promptly after the certificate of correction becomes effective, the credit union shall file with the commissioner a copy of the certificate of correction, certified by the Secretary of State.

history: (History: Added by Stats. 2002, Ch. 734, Sec. 12. Effective September 20, 2002.)

article: 1. Incorporation and Bylaws


text:
(a) No certificate of revocation by a credit union shall become effective unless the certificate, with the commissioner’s approval endorsed thereon, is filed with the Secretary of State. The certificate of revocation shall become effective upon being filed with the Secretary of State.

(b) Promptly after the certificate of revocation becomes effective, the credit union shall file with the commissioner a copy of the certificate of revocation, certified by the Secretary of State.

history: (History: Added by Stats. 2002, Ch. 734, Sec. 13. Effective September 20, 2002.)

article: 1. Incorporation and Bylaws


text:
The bylaws shall prescribe the manner in which the business of the credit union shall be conducted with reference to the following matters:

(a) The purpose of the credit union.

(b) The qualification for membership.

(c) Determination of the month, time, and place of the annual meeting; the manner of conducting meetings; the method by which members shall be notified of meetings; and the number of members which shall constitute a quorum.

(d) The authorized number of directors, the number of directors necessary to constitute a quorum, and the powers and duties of officers elected by the directors.

(e) The membership, powers, and duties of the supervisory or audit committee, as applicable.

(f) The membership, powers, and duties of the credit committee or if applicable, the general powers, responsibilities, and duties of the credit manager.

(g) The manner in which the bylaws may be amended.

history: (History: Amended by Stats. 2017, Ch. 561, Sec. 57. (AB 1516) Effective January 1, 2018.)

article: 1. Incorporation and Bylaws


text: No membership shares, certificates for funds or other securities shall be issued by any credit union until it has applied for and obtained from the commissioner a certificate authorizing it to act as a credit union.

article: 2. Certificate to Act as a Credit Union

path: 5. CREDIT UNIONS > 2. Formation > 2. Certificate to Act as a Credit Union


text: Applications for a certificate to act as a credit union shall be made in writing to the commissioner, setting forth such information as the commissioner requires. The application shall be verified by one or more officers of the credit union authorized by its board of directors.

article: 2. Certificate to Act as a Credit Union


text: At the time of filing an application to operate as a credit union, the applicant shall pay to the commissioner a filing fee of five dollars ($5).

article: 2. Certificate to Act as a Credit Union


text: Upon the filing of the application for a certificate to act as a credit union, the commissioner shall examine the application together with the other papers and documents filed therewith. The commissioner may make any further investigation of the applicant and its affairs that he deems advisable.

article: 2. Certificate to Act as a Credit Union


text: If the commissioner determines that the applicant has satisfied the provisions of this division and does not find facts constituting reasons for denial as specified in Section 14155, the commissioner shall issue and deliver a certificate to the applicant to engage in business in accordance with the provisions of this division.

history: (History: Amended by Stats. 1980, Ch. 974, Sec. 3.)

article: 2. Certificate to Act as a Credit Union


text:
Upon reasonable notice and opportunity to be heard, the commissioner may deny the application for a certificate to act as a credit union or an expansion of the field of membership of an existing credit union for any of the following reasons:

(a) The field of membership of the applicant is contrary to the principles of organizing credit unions, including principles of organizing credit unions based on common bond of occupation, association, or groups within a well-defined neighborhood, community or rural district.

(b) A false statement of a material fact has been made in the application for certificate.

(c) Any officer, director, or committee member of the applicant has, within the last 10 years, been (1) convicted of or pleaded nolo contendere to a crime, or (2) committed any act involving dishonesty, fraud, or deceit, which crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with the provisions of this division.

(d) The applicant or any officer, director, or committee member of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of a foreign jurisdiction.

(e) The number of persons eligible for membership is less than 500.

(f) The applicant’s showing as to the economic feasibility of the proposed credit union is inadequate. Notwithstanding anything to the contrary, nothing shall prohibit a credit union from admitting to membership any corporation formed to provide services to credit unions or to credit union members in which the credit union holds shares pursuant to Sections 14650 and 14651 and any limited liability company formed to provide services to credit unions or to credit union members in which the credit union holds membership or economic interests pursuant to Section 14651.

history: (History: Amended by Stats. 1998, Ch. 539, Sec. 1.4. Effective January 1, 1999.)

article: 2. Certificate to Act as a Credit Union


text: Each certificate issued under this division remains in full force and effect until surrendered and accepted by the commissioner, or until suspended or revoked by the commissioner.

history: (History: Amended by Stats. 1989, Ch. 516, Sec. 1.)

article: 2. Certificate to Act as a Credit Union


text: The powers of supervision and examination of all credit unions organized under the provisions of this division are vested in the commissioner.

history: (History: Repealed and added by Stats. 1979, Ch. 112.)

article: 1. General

path: 5. CREDIT UNIONS > 3. Administration and Powers of the Commissioner > 1. General


text: There is in the Division of Financial Institutions of the Department of Financial Protection and Innovation the Office of Credit Unions. The Office of Credit Unions has charge of the execution of the laws of this state relating to credit unions or to the credit union business.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 115. (SB 1498) Effective January 1, 2023.)

chapter: 3. Administration and Powers of the Commissioner

article: 1. General


text: The chief officer of the Office of Credit Unions is the Deputy Commissioner of the Office of Credit Unions. The Deputy Commissioner of the Office of Credit Unions, under the direction and on behalf of the Senior Deputy Commissioner of Financial Protection and Innovation for the Division of Financial Institutions, shall administer the laws of this state relating to credit unions or the credit union business. The Deputy Commissioner of the Office of Credit Unions shall be appointed by the Governor and shall hold office at the pleasure of the Governor. The Deputy Commissioner of the Office of Credit Unions shall receive an annual salary as fixed by the Governor.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 116. (SB 1498) Effective January 1, 2023.)

article: 1. General


text: The commissioner may establish or waive such rules and regulations as may be reasonable or necessary to carry out the purposes and provisions of this division.

history: (History: Amended by Stats. 1983, Ch. 263, Sec. 1.)

article: 1. General


text: The commissioner may by regulation authorize credit unions organized under the provisions of this division to engage in any activity authorized by law or regulation for credit unions organized under the laws of the United States. Any such regulation shall expire on the first day of January two years following the end of the calendar year in which such regulation was promulgated.

history: (History: Amended by Stats. 1982, Ch. 270, Sec. 1.)

article: 1. General


text: Upon request of the commissioner, a credit union shall furnish to the commissioner an authorization for examination of financial records of any capital funds, undivided profits, and reserve funds, maintained in a financial institution, in accordance with the procedures set forth in Section 7473 of the Government Code.

history: (History: Amended by Stats. 1980, Ch. 1097, Sec. 2.)

article: 1. General


text: If the commissioner upon any examination, or from any report made to the commissioner, finds any credit union is violating the provisions of this division or the rules made pursuant to this division, or has impaired capital, or is insolvent, or is conducting its business in an unsafe or unauthorized manner, the commissioner may notify the credit union to, and the credit union shall, cease these practices. The commissioner may notify the credit union to, and the credit union shall, temporarily suspend or entirely cease the transaction of any new business or the portion thereof as is ordered by the commissioner. Within 10 days from the date of a notification or order pursuant to this section, the credit union may request a hearing. Neither the request for a hearing nor the hearing itself shall stay the notification or order issued by the commissioner under this section.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 571. Effective January 1, 1997. Operative July 1, 1997.)

article: 1. General


text: The commissioner may, upon reasonable notice and opportunity to be heard, suspend or revoke any certificate if the commissioner finds that the credit union has violated any provisions of this division or any rule or regulation of the commissioner made pursuant to this division, or if any fact or condition exists which, if it had existed at the time of the original application for certificate, reasonably would have warranted the commissioner in refusing originally to issue such certificate.

history: (History: Amended by Stats. 1980, Ch. 974, Sec. 5.)

article: 1. General


text: In any proceeding under this law, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

history: (History: Added by Stats. 1979, Ch. 112.)

article: 1. General


text:
The commissioner may, after appropriate notice and opportunity for hearing, by order censure, or suspend for a period not exceeding 12 months, or bar from any position of employment or management of, any credit union, any officer, director, or employee of, or person performing similar functions for, a credit union, if the commissioner finds that:

(1) The censure, suspension or bar is in the public interest, that the person has committed a violation of this division or rule of the commissioner, and that the violation was either willful or caused, or will probably cause, material damage to the credit union or any member thereof.

(2) Any officer, director, employee of, or person performing similar functions for a credit union has been convicted of, or pleaded nolo contendere to, a crime, or has been held liable in a civil action by final judgment if the crime or civil action involved fraud, embezzlement, fraudulent conversion or misappropriation of property.

history: (History: Amended by Stats. 1982, Ch. 716, Sec. 4.)

article: 1. General


text:
(a) Whenever it appears to the commissioner that any person has engaged in or is about to engage in any acts or practices constituting a violation of any provision of this division or any rule or order adopted pursuant to this division, the commissioner may in the commissioner’s discretion bring an action in the name of the people of the State of California in the superior court to enjoin the acts or practices or to enforce compliance. Upon a proper showing a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and a receiver or conservator, which may include the commissioner, may be appointed for the defendant or the defendant’s assets, and any other ancillary relief may be granted as appropriate. A receiver or conservator appointed by the court pursuant to this section may, with the approval of the court, exercise all of the powers of the defendant’s officers, directors, trustees, or persons who exercise similar powers and perform similar duties, including the powers expressly authorized by subdivision (b) of Section 14300.

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

history: (History: Repealed and added by Stats. 1990, Ch. 1202, Sec. 2.)

article: 1. General


text:
In determining for purposes of this division whether the capital of any credit union is adequate, the commissioner shall consider the following:

(a) The nature and volume of the business and the proposed business of the credit union.

(b) The amount, nature, quality, and liquidity of the assets of the credit union.

(c) The amount and nature of the liabilities, including contingent liabilities, of the credit union.

(d) The history of, and prospects for, the credit union to earn and retain income.

(e) The nature and scope of the operations of the credit union.

(f) The performance of the management of the credit union.

(g) Any other factors as are, in the opinion of the commissioner, relevant.

history: (History: Added by Stats. 2002, Ch. 734, Sec. 15. Effective September 20, 2002.)

article: 1. General


text:
(a) The commissioner, whenever in his or her opinion such action is necessary or appropriate to carry out his or her duties, may call a meeting of the board of directors of a credit union.

(b) A meeting of the board of a credit union called by the commissioner shall be held upon four days’ notice by first class mail or 24 hours’ notice delivered personally or by telephone. The notice shall be given by the commissioner or, if the commissioner so orders, by an officer of the credit union.

(c) A meeting of the board of a credit union called by the commissioner shall be held at the head office of the credit union, the department office closest to the head office of the credit union, or any other place within a reasonable distance to the head office of the credit union as may be designated by the commissioner and specified in the notice of that meeting.

(d) The expenses of the credit union pertaining to a meeting of the board of a credit union called by the commissioner shall be paid by the credit union.

history: (History: Added by Stats. 2010, Ch. 532, Sec. 46. (AB 1268) Effective January 1, 2011.)

article: 1. General


text:
(a) (1) The commissioner may at any time investigate into the affairs and examine the books, accounts, records, files, and any office within or outside of this state used in the business of every credit union, whether it acts or claims to act under or without authority of this division.

(2) The commissioner and the commissioner’s duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a credit union referred to in paragraph (1).

(3) The officers and employees of a credit union being examined shall exhibit to the examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power.

(b) (1) The commissioner shall examine every credit union organized under the laws of this state to the extent and whenever and as often as the commissioner shall deem it advisable but in no case less than once every two years.

(2) For purposes of this subdivision, an examination made by the commissioner in conjunction with or with assistance from the National Credit Union Administration or a credit union regulatory agency of another state of the United States is deemed to be an examination made by the commissioner.

(3) For purposes of this subdivision, an examination made by the National Credit Union Administration pursuant to an alternating examination schedule approved by both the commissioner and the National Credit Union Administration is deemed to be an examination made by the commissioner.

(4) This subdivision does not require the commissioner to make an examination onsite at the offices of a credit union.

history: (History: Amended by Stats. 2021, Ch. 762, Sec. 1. (SB 269) Effective January 1, 2022.)

article: 2. Examinations and Reports

path: 5. CREDIT UNIONS > 3. Administration and Powers of the Commissioner > 2. Examinations and Reports


text: The commissioner upon the written consent of any credit union officer or director may make any examination of the credit union in any regularly established office of the commissioner.

article: 2. Examinations and Reports


text:
(a) A credit union with total assets equal to or greater than ten million dollars ($10,000,000) shall, within 105 days after the end of each fiscal year or within any extended time that the commissioner may specify, file with the commissioner an audit report for the fiscal year.

(b) The audit report called for in subdivision (a) shall comply with all of the following provisions:

(1) The audit report shall contain the audited financial statements of the credit union for, or as of the end of, the fiscal year, prepared in accordance with generally accepted accounting principles that the commissioner may specify, and any other information that the commissioner may specify.

(2) The audit report shall be based upon an audit of the credit union, conducted in accordance with generally accepted auditing standards, and any other requirements that the commissioner may specify.

(3) The audit report shall be prepared by an independent certified public accountant or independent public accountant who is acceptable to the commissioner.

(4) The audit report shall include, or be accompanied by, a certificate or opinion of the independent certified public accountant or independent public accountant that is satisfactory in form and content to the commissioner. If the certificate or opinion is qualified, the commissioner may order the credit union to take any action that the commissioner may find necessary or advisable to enable the independent certified public accountant or independent public accountant to remove the qualification.

(c) A credit union with total assets of less than ten million dollars ($10,000,000) shall, within 105 days after the end of each fiscal year or within any extended time that the commissioner may specify, file with the commissioner an audit report for the fiscal year.

(d) The audit report called for in subdivision (c) may comply with all the provisions of subdivision (b), or may consist of alternative procedures acceptable to the commissioner. An alternative procedures audit may be performed by any of the following:

(1) An independent certified public accountant.

(2) An independent public accountant.

(3) The credit union’s supervisory or audit committee, as applicable, provided that the audit complies with the requirements of Section 14253.

(e) Notwithstanding subdivision (d), the commissioner may reject an alternative procedures audit that he or she determines is not satisfactory. If the commissioner rejects an alternative procedures audit for any reason, he or she may order a credit union to obtain an audit that is satisfactory to the commissioner.

(f) The commissioner may, by order or regulation, either unconditionally or upon specified terms and conditions, grant an exemption from this section in any case where the commissioner finds that the requirements of this section are not necessary or advisable.

history: (History: Amended by Stats. 2016, Ch. 353, Sec. 2. (AB 2274) Effective January 1, 2017.)

article: 2. Examinations and Reports


text: A credit union shall, when requested by the commissioner, submit its unaudited financial statements, prepared in accordance with generally accepted accounting principles and consisting of at least a balance sheet and statement of income as of the date and for the period specified by the commissioner. The commissioner may require the submission of such reports on a monthly or other periodic basis.

article: 2. Examinations and Reports


text:
(a) Except as provided in subdivisions (b) and (c), within 10 business days of opening, closing, or relocating a branch office, a credit union shall notify the commissioner in writing of the action, including the street and mailing addresses of the branch office.

(b) A credit union shall not establish a branch office in another state of the United States without the approval of the governmental authority with jurisdiction to license or charter credit unions in that state. “State” has the meaning set forth in Section 207.

(c) A credit union shall not establish a branch office in a foreign nation without the prior written approval of the commissioner. “Foreign nation” has the meaning set forth in Section 175.

history: (History: Amended by Stats. 2014, Ch. 64, Sec. 15. (AB 2742) Effective January 1, 2015.)

article: 2. Examinations and Reports


text: Every credit union shall make other special reports to the commissioner as the commissioner may from time to time require. Such reports shall be in the form and filed at such date as prescribed by the commissioner, and shall if required by him, be verified in such manner as he prescribes.

article: 2. Examinations and Reports


text:
(a) If any credit union fails to file with the commissioner any report required by this division on or before the day designated for the filing of the report or, if the time for filing the report is extended by the commissioner, within the extended time, or fails to include in the report any matter required by the commissioner, the failure is grounds for the suspension or revocation of the certificate authorizing the credit union to act as a credit union.

(b) If any credit union fails to file with the commissioner any report required by this division or by any order or regulation of the commissioner, on or before the day designated for the filing of the report or, if the time for filing the report is extended by the commissioner, within the extended time, or fails to include in the report any matter required by the commissioner, the commissioner may order the credit union to pay to the commissioner a civil penalty imposed pursuant to Section 329.

history: (History: Amended by Stats. 2014, Ch. 64, Sec. 16. (AB 2742) Effective January 1, 2015.)

article: 2. Examinations and Reports


text: Investigation and examination reports prepared by the commissioner’s duly designated representatives shall not be public records. The reports may be disclosed to the officers, directors, members of the supervisory committee, members of the credit committee, and key management personnel of the credit union that is the subject of a report for the purpose of corrective action by those persons. The examination report may also be disclosed to internal and external auditors and attorneys that are retained by the subject credit union, but only to the extent necessary for the auditors and attorneys to perform work related to issues addressed in the examination report. The disclosure shall not operate as a waiver of the exemption specified in Section 7929.000 of the Government Code.

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 109. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)

article: 2. Examinations and Reports


text:
For purposes of this chapter, the following terms shall have the following meanings:

(a) “Officer with a subject institution” means the position of director, officer, or employee with the subject institution.

(b) “Subject institution” means any of the following:

(1) A California credit union.

(2) A subsidiary of a California credit union.

(3) A foreign, whether other state or other nation, credit union, other than a federal credit union, that maintains an office in this state, with respect to the office.

(4) Any other person, other than a federal credit union, conducting business in this state.

(c) “Subject person,” when used with respect to a subject institution, means any of the following:

(1) A director, officer, employee, or agent of the subject institution.

(2) A member, consultant, joint venture partner, or other person that participates in the affairs of a subject institution.

(3) An independent contractor, including an appraiser or accountant, who knowingly or recklessly participates in any of the following acts if the act caused or is likely to cause a material financial loss to, or a significant adverse effect on, the subject institution.

(A) A violation of any applicable law, regulation, or order.

(B) A breach of fiduciary duty.

(C) An unsafe or unsound act.

(d) “Violation” includes any act done alone or with other persons for or toward causing, bringing about, participating in, counseling, aiding, or abetting a violation of any applicable statute, regulation, provision of a written order issued by the commissioner, or provision of a written operating agreement signed by the commissioner and a subject institution or subject person.

history: (History: Repealed and added by Stats. 2002, Ch. 734, Sec. 18. Effective September 20, 2002.)

article: 3. Enforcement

path: 5. CREDIT UNIONS > 3. Administration and Powers of the Commissioner > 3. Enforcement


text: Any requirement in this chapter for notice or hearing before the commissioner issues an order may be waived by the person to whom the order is issued.

history: (History: Repealed and added by Stats. 2002, Ch. 734, Sec. 20. Effective September 20, 2002.)

article: 3. Enforcement


text:
(a) The commissioner may bring an action in the name of the people of this state in the superior court to enjoin any violation of, to enforce compliance with, or to collect any penalty or other liability imposed under, this division or any regulation or order issued under this division. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted, and a monitor, receiver, conservator, or other designated fiduciary or officer of the court may be appointed for the defendant or the defendant’s assets, or other relief may be granted as appropriate.

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

(c) If the commissioner finds that it is in the public interest, the commissioner may include in an action authorized by subdivision (a) a claim for ancillary relief, including a claim for restitution, disgorgement, or damages on behalf of the person injured by the act or practice constituting the subject matter of the action, and the court shall have jurisdiction to award ancillary relief.

(d) Neither the provision of subdivision (a) that authorizes the appointment of a monitor, receiver, conservator, or other designated fiduciary or officer of the court, nor any provision of subdivision (b) or (c), applies to any of the following:

(1) A California credit union that is authorized by the commissioner to transact credit union business.

(2) A foreign, whether other state or other nation, credit union that maintains an office in this state in accordance with federal law, the law of this state, and the law of the credit union’s domicile.

(e) The provisions of this section that authorize the commissioner to bring actions and seek relief are not intended to, and do not, affect any right that another person may have to bring the same or similar actions or to seek the same or similar relief.

history: (History: Repealed and added by Stats. 2002, Ch. 734, Sec. 22. Effective September 20, 2002.)

article: 3. Enforcement


text:
(a) The commissioner may, without any prior notice or hearing, order a person to cease and desist from violating Section 14150 if either of the following criteria are met:

(1) The commissioner finds that the person has violated Section 14150.

(2) The commissioner finds that there is reasonable cause to believe that the person will imminently violate Section 14150.

(b) (1) (A) Within 30 days after an order is issued pursuant to subdivision (a), the person to whom the order is issued may file with the commissioner an application for a hearing on the order.

(B) If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner, or within any longer period to which the person consents, the order shall be deemed rescinded.

(C) Within 30 days after the hearing, or within any longer period to which the person consents, the commissioner shall affirm, modify, or rescind the order. If the commissioner fails to affirm, modify, or rescind the order within this time limit, the order shall be deemed rescinded.

(2) The right of a person to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the person to apply to the commissioner for a hearing on the order pursuant to paragraph (1).

history: (History: Repealed and added by Stats. 2002, Ch. 734, Sec. 24. Effective September 20, 2002.)

article: 3. Enforcement


text:
If, after notice and a hearing, the commissioner finds any of the factors set forth in subdivision (a) or (b) with respect to a subject institution or subject person, the commissioner may order the subject institution or subject person to cease and desist from the action or violation:

(a) That the subject institution or subject person has engaged or participated, is engaging or participating, or that there is reasonable cause to believe that the subject institution or subject person will imminently engage or participate in any unsafe or unsound act with respect to the business of the subject institution.

(b) That the subject institution or subject person has violated, is violating, or that there is reasonable cause to believe that the subject institution or subject person will imminently violate, any provision of this division, of any regulation or order issued under this division, of any other applicable law, or of any written agreement with the commissioner.

history: (History: Repealed and added by Stats. 2002, Ch. 734, Sec. 26. Effective September 20, 2002.)

article: 3. Enforcement


text:
(a) If the commissioner finds that any of the factors set forth in Section 14304 is true with respect to a subject institution or subject person and that the action or violation is likely to have any of the consequences set forth in paragraphs (1) to (4), inclusive, the commissioner may, without any prior notice or hearing, order the subject institution or subject person to cease and desist from the action or violation:

(1) To cause the insolvency of the subject institution.

(2) To cause significant dissipation of the assets or earnings of the subject institution.

(3) To weaken the condition of the subject institution.

(4) To otherwise prejudice the interests of the members of the subject institution.

(b) (1) (A) Within 30 days after an order is issued pursuant to subdivision (a), any subject institution or subject person to whom the order is issued may file with the commissioner an application for a hearing on the order.

(B) If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner, or within any longer period to which the subject institution or subject person consents, the order shall be deemed rescinded.

(C) Within 30 days after the hearing, or within any longer period to which the subject institution or subject person consents, the commissioner shall affirm, modify, or rescind the order. If the commissioner fails to affirm, modify, or rescind the order within this time limit, the order shall be deemed rescinded.

(2) The right of any subject institution or subject person to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the subject institution or subject person to apply to the commissioner for a hearing on the order pursuant to paragraph (1).

history: (History: Added by Stats. 2002, Ch. 734, Sec. 27. Effective September 20, 2002.)

article: 3. Enforcement


text:
An order issued pursuant to Sections 14303 to 14305, inclusive, may include any of the following provisions:

(a) Require the subject institution or subject person to take affirmative action to correct any condition resulting from the action or violation, including any of the following actions:

(1) To make restitution or provide reimbursement, indemnification, or guarantee against loss, if the subject institution or subject person was unjustly enriched in connection with the action or violation or if the action or violation involved a reckless disregard for any provision of this division, any regulation or order issued under this division, any other applicable law, or any agreement with the commissioner.

(2) Restrict the growth of the subject institution.

(3) Dispose of any loan or other asset involved.

(4) Correct violations of law.

(5) Employ qualified officers or employees, who may be subject to approval of the commissioner.

(6) Take any other action that the commissioner may find to be necessary or advisable.

(b) Limit the business activities or functions of the subject institution or subject person.

history: (History: Added by Stats. 2002, Ch. 734, Sec. 28. Effective September 20, 2002.)

article: 3. Enforcement


text:
(a) If the commissioner finds that a subject institution’s books or records are so incomplete or inaccurate that the commissioner is unable through the normal supervisory process to determine the financial condition of the subject institution or of the details or purpose of any transaction or transactions that may materially affect the financial condition of the subject institution, the commissioner may, without any prior notice or hearing, order the subject institution to do any of the following:

(1) To cease any activity or practice that gave rise, in whole or in part, to the incomplete or inaccurate state of the books or records.

(2) To take affirmative action to restore the books or records to a complete and accurate state.

(b) (1) (A) Within 30 days after an order is issued pursuant to subdivision (a), any subject institution or subject person to whom the order is issued may file with the commissioner an application for a hearing on the order.

(B) If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner, or within any longer period to which the subject institution or subject person consents, the order shall be deemed rescinded.

(C) Within 30 days after the hearing, or within any longer period to which the subject institution or subject person consents, the commissioner shall affirm, modify, or rescind the order. If the commissioner fails to affirm, modify, or rescind the order within this time limit, the order shall be deemed rescinded.

(2) The right of any subject institution or subject person to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the subject institution or subject person to apply to the commissioner for a hearing on the order pursuant to paragraph (1).

history: (History: Added by Stats. 2002, Ch. 734, Sec. 29. Effective September 20, 2002.)

article: 3. Enforcement


text:
If, after notice and a hearing, the commissioner finds that any of the factors set forth in subdivision (a), any of the factors set forth in subdivision (b), and any of the factors set forth in subdivision (c) are true with respect to a subject person of a subject institution, the commissioner may issue an order suspending or removing the subject person from the subject person’s office, if any, with the subject institution and prohibiting the subject person from participating in any manner in the conduct of the affairs of the subject institution without the approval of the commissioner:

(a) (1) That the subject person has, directly or indirectly, violated any provision of this division, of any regulation or order issued under this division, of any other applicable law relating to the business of the licensee, or of any written agreement with the commissioner.

(2) That the subject person has, directly or indirectly, engaged or participated in any unsafe or unsound act in connection with the business of the subject institution or any other business institution.

(3) That the subject person has, directly or indirectly, engaged or participated in any act which constitutes a breach of the subject person’s fiduciary duty.

(b) That, by reason of the act, violation, or breach of fiduciary duty described in subdivision (a) the following have occurred:

(1) The subject institution or business institution has suffered or will probably suffer financial loss or other damage.

(2) The interests of the members of the subject institution have been or could be prejudiced.

(3) The subject person has received financial gain or other benefit.

(c) That the act, violation, or breach of fiduciary duty described in subdivision (a) either involves dishonesty on the part of the subject person or demonstrates the subject person’s willful or continuing disregard for the safety or soundness of the subject institution or business institution.

history: (History: Added by Stats. 2002, Ch. 734, Sec. 30. Effective September 20, 2002.)

article: 3. Enforcement


text:
(a) If the commissioner finds that any of the factors set forth in subdivision (a) of Section 14308, any of the factors set forth in subdivision (b) of Section 14308, and any of the factors set forth in subdivision (c) of Section 14308 are true with respect to a subject person of a subject institution, and that an action is necessary or advisable for the protection of the subject institution or the interests of the members of the subject institution, the commissioner may, without any prior notice or hearing, issue an order that does both of the following:

(1) Suspends the subject person from the subject person’s office, if any, with the subject institution.

(2) Prohibits the subject person from participating in any manner in the conduct of the affairs of the subject institution without the approval of the commissioner.

(b) (1) (A) Within 30 days after an order is issued pursuant to subdivision (a), any subject person to whom the order is issued may file with the commissioner an application for a hearing on the order.

(B) If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner or within any longer period to which the subject person consents, the order shall be deemed rescinded.

(C) Within 30 days after the hearing or within any longer period to which the subject person consents, the commissioner shall affirm, modify, or rescind the order. If the commissioner fails to affirm, modify, or rescind the order within this time limit, the order shall be deemed rescinded.

(2) The right of any subject person to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the subject person to apply to the commissioner for a hearing on the order pursuant to paragraph (1).

history: (History: Added by Stats. 2002, Ch. 734, Sec. 31. Effective September 20, 2002.)

article: 3. Enforcement