citation: FIN § 1250

text:
Unless the context otherwise requires, in this chapter:

(a) “Bank” means a bank organized under the laws of this state.

(b) “Control” means possession, direct or indirect, of the power:

(1) To vote 25 percent or more of any class of the voting securities issued by a person; or

(2) To direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract (other than a commercial contract for goods or nonmanagement services), or otherwise; provided, however, that no individual shall be deemed to control a person solely on account of being a director, officer, or employee of such person.

For purposes of paragraph (2) of this subdivision, a person who, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10 percent or more of the then outstanding voting securities issued by another person is presumed to control such other person.

For purposes of this chapter, the commissioner may determine whether a person in fact controls another person.

(c) “Controlling person” means a person who, directly or indirectly, controls a bank.

(d) “Person” means an individual, a corporation, an association, a syndicate, a partnership, a limited liability company, a business trust, an estate, a trust, or an organization of any kind, or any combination of any of the foregoing acting in concert.

(e) “Shareholder” means:

(1) In the case of a corporation, a holder of a share of any class or series.

(2) In the case of a nonprofit or charitable corporation, an unincorporated association, or a syndicate, a member.

(3) In the case of a partnership, a partner.

(4) In the case of a business trust, an estate, or a trust, a holder of a beneficial interest.

(5) In the case of an organization of any other kind, a holder of an ownership interest.

chapter: 7. Acquisition of Control

path: 1.1. BANKING > 7. Acquisition of Control


kind: section

code: FIN

citation: FIN § 1251

text:
No person shall, directly or indirectly, unless the commissioner has approved such acquisition of control, do any of the following:

(a) Make a tender offer for, a request or invitation for tenders of, or an offer to exchange securities for, any voting security or any security convertible into a voting security of a bank or a controlling person if the person making such tender offer, request or invitation for tenders, or offer to exchange securities would, by consummation thereof, directly or indirectly, acquire control of such bank or such controlling person.

(b) Solicit approval of any shareholder of a controlling person for a merger, consolidation, sale of assets, or other transaction by which any person other than such controlling person would acquire control of the bank controlled by such controlling person.

(c) Acquire control of a bank or a controlling person; provided, however, that nothing in this subdivision shall be deemed to prohibit any person from negotiating to acquire (but not acquiring) control of a bank or a controlling person.

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

division: 1.1. BANKING


citation: FIN § 1252

text: Notwithstanding any other provision of this chapter, except for those persons approved by the commissioner prior to September 1, 2002, and for those persons who control industrial banks as of September 1, 2002, no person may directly or indirectly, including through any merger, consolidation, or any other type of business combination, acquire control of an industrial bank, as defined in Section 111, unless the person is engaged only in the activities permitted for financial holding companies, as provided in Section 103 of the federal Gramm-Leach-Bliley Act (12 U.S.C. Sec. 1843(k)(1)), or is a credit union, as defined in Section 165, when the industrial bank is a credit union service organization, as defined in Section 14651. Nothing in this section shall be construed to exempt a person seeking to acquire control of a bank that otherwise qualifies to do so pursuant to this section, from the requirements of Sections 1250 to 1263, inclusive. For the purposes of this section, the term “control” has the same meaning as in subdivision (b) of Section 1250.


citation: FIN § 1253

text:
An application for approval to acquire control of a bank or a controlling person shall be in such form and contain such information as the commissioner may require by regulation or order and shall be accompanied by the following fee:

(a) In case the applicant has been a director or officer of the bank for not less than two years (or, if the bank has been in business for less than two years, for such lesser period), a fee of five hundred dollars ($500); and

(b) In any other case, a fee of one thousand five hundred dollars ($1,500).


citation: FIN § 1254

text:
If the commissioner finds, with respect to the proposed acquisition of control of a bank or a controlling person, that any of the factors set forth in subdivisions (a) to (g), inclusive, is true, he or she shall deny the application. If the commissioner finds that none of such factors is true, he or she shall approve the application.

(a) That the proposed acquisition of control would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of this state;

(b) That the effect of the proposed acquisition of control in any section of the state may be substantially to lessen competition or to tend to create a monopoly or that the proposed acquisition of control would in any other manner be in restraint of trade, and that the anticompetitive effects of the proposed acquisition of control are not clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served;

(c) That the financial condition of any acquiring person is such as might jeopardize the financial stability of the bank or the controlling person, or prejudice the interests of the depositors, creditors, or shareholders of the bank or the controlling person;

(d) That plans or proposals to liquidate the bank or the controlling person, to sell the assets of the bank or the controlling person, to merge or consolidate the bank or the controlling person, or to make any other major change in the business, corporation structure or management of the bank or the controlling person are not fair and reasonable to the depositors, creditors, and shareholders of the bank or the controlling person;

(e) That the competence, experience, or integrity of any acquiring person indicates that it would not be in the interest of the depositors, creditors, or shareholders of the bank or the controlling person or in the interest of the public to permit such person to control the bank or the controlling person;

(f) That the proposed acquisition is unfair, unjust, or inequitable to the bank or the controlling person or to the depositors, creditors, or shareholders of the bank or the controlling person; or

(g) That the applicant neglects, fails, or refuses to furnish to the commissioner all the information required by the commissioner.


citation: FIN § 1255

text:
(a) For purposes of Section 1254, the commissioner may find:

(1) That the integrity of an acquiring person indicates that it would not be in the interest of the depositors, creditors, or shareholders of a bank or controlling person or in the interest of the public to permit the acquiring person to control the bank or controlling person if the acquiring person or any director or officer of the acquiring person has been convicted of, or has pleaded nolo contendere to, any crime involving fraud or dishonesty.

(2) That a plan to make a major change in the management of a bank or controlling person is not fair and reasonable to the depositors, creditors, or shareholders of the bank or controlling person if the plan provides for a person who has been convicted of, or has pleaded nolo contendere to, any crime involving fraud or dishonesty to become a director or officer of the bank or controlling person.

(b) Subdivision (a) shall not be deemed to be the only grounds upon which the commissioner may find, for purposes of Section 1254, that the integrity of an acquiring person indicates that it would not be in the interest of the depositors, creditors, or shareholders of a bank or controlling person or in the interest of the public to permit the acquiring person to control the bank or controlling person or that a plan to make a major change in the management of a bank or controlling person is not fair and reasonable to the depositors, creditors, or shareholders of the bank or controlling person.

history: (History: Amended by Stats. 2013, Ch. 334, Sec. 35. (SB 537) Effective January 1, 2014.)


citation: FIN § 1256

text: The commissioner may, in approving a proposal to acquire control of a bank or a controlling person pursuant to Section 1254, impose such conditions as the commissioner deems reasonable or necessary or advisable in the public interest.


citation: FIN § 1257

text: The commissioner may, for good cause, amend, alter, suspend, or revoke any approval of a proposal to acquire control of a bank or a controlling person issued pursuant to Section 1254.


citation: FIN § 1258

text:
Notwithstanding any other provision of this chapter, any application for approval to acquire control of a bank or a controlling person which is not denied or approved by the commissioner within a period of 60 days after such application is filed with the commissioner or, if the applicant consents to an extension of the period within which the commissioner may act, within such extended period, shall be deemed to be approved by the commissioner as of the first day after such period of 60 days or such extended period, as the case may be.

For purposes of this section, an application for approval to acquire control of a bank or a controlling person is deemed to be filed with the commissioner at the time when the complete application, including any amendments or supplements, containing all the information in the form required by the commissioner, is received by him or her.


citation: FIN § 1259

text:
(a) The commissioner, before determining whether, for purposes of this chapter, a person controls another person or before denying or approving an application for approval to acquire control of a bank or controlling person, may hold a hearing.

(b) After determining whether, for purposes of this chapter, a person controls another person or after denying or approving an application for approval to acquire control of a bank or controlling person, the commissioner, upon the filing of a written request for a hearing by any person prejudiced by the commissioner’s decision, shall hold a hearing and upon such hearing shall affirm, modify, or reverse his or her decision. Any such hearing shall commence within a period of 30 days after the written request for the hearing is filed with the commissioner or, if the person filing the written request for the hearing consents to an extension of the period within which the hearing is to commence, within such extended period.


citation: FIN § 1260

text: There shall be exempted from the provisions of Section 1251 any transaction, including, without limitation, any type or class of transactions, which the commissioner by regulation or order exempts as not being comprehended within the purposes of this chapter and the regulation of which the commissioner finds is not necessary or appropriate in the public interest or for the protection of a bank, a controlling person, or the depositors, creditors, or shareholders of a bank or a controlling person.


citation: FIN § 1261

text: Whenever it appears to the commissioner that any person has committed or is about to commit a violation of any provision of this chapter or of any regulation or order of the commissioner issued pursuant to this chapter, the commissioner may apply to the superior court for an order enjoining such person from violating or continuing to violate this chapter or any such regulation or order and for other equitable relief as the nature of the case or the interests of the bank, the controlling person, the depositors, creditors, or shareholders of such bank or such controlling person, or the public may require.


citation: FIN § 1262

text: No person shall be entitled to vote or to give a written consent with respect to any security acquired in contravention of any provision of this chapter or of any regulation or order of the commissioner issued pursuant to this chapter for a period of three years after such acquisition. If a security of a bank or a controlling person is acquired in contravention of this chapter or any such regulation or order, such bank, such controlling person, any shareholder of such bank or such controlling person, or the commissioner may apply to the superior court for equitable relief, including costs and (except with respect to the commissioner) attorney fees, to enjoin prospectively any person from voting or giving any written consent with respect to such security for a period of three years after such acquisition, and the commissioner may apply to the superior court for equitable relief, including costs, to void any voting or any giving of a written consent with respect to such security which has occurred since such acquisition.


citation: FIN § 1263

text: If any provision or clause of this chapter or the application thereof to any person or circumstance is held invalid, illegal, or unenforceable, such invalidity, illegality, or unenforceability shall not affect other provisions or applications of this article which can be given effect without the invalid, illegal, or unenforceable provision or application, and to this end, the provisions of this chapter are declared to be severable.


citation: FIN § 1280

text:
“Bank holding company” means:

(a) Any person or company which:

(1) Directly or indirectly owns, controls, or holds with power to vote, 10 percent or more of the outstanding stock of any domestic bank, or 10 percent or more of the outstanding stock of any domestic bank together with 10 percent or more of the shares or proxy of shares of any national bank located in California.

(2) Controls in any manner whether by the holding of proxy, or otherwise, the election of a majority of the directors of any domestic bank, or of both any domestic bank and any national bank located in California.

(3) The commissioner determines, after reasonable notice and opportunity for hearing, directly or indirectly exercises, or has power to exercise, a controlling influence over the management and policies of any domestic bank, or of both any domestic bank and any national bank located in California.

(b) Any company which controls in any manner any company which is or becomes a bank holding company by virtue of this chapter.

(c) Bank holding company does not include a trust company controlled by or under common control with a title insurance company.

chapter: 8. Bank Holding Companies

path: 1.1. BANKING > 8. Bank Holding Companies


citation: FIN § 1281

text: “Company” means any domestic or foreign corporation, voting trust, business trust, limited partnership, partnership fund, joint stock company, association, syndicate, organized group of persons, or similar organization or group, whether incorporated or not.


citation: FIN § 1282

text:
“Subsidiaries,” with respect to a specified bank holding company, means:

(a) Any company 10 percent or more of whose voting securities are directly or indirectly owned or controlled by such bank holding company;

(b) Any company a majority of whose directors are controlled in any manner by such holding company;

(c) Any company 10 percent or more of whose voting securities are held by trustees or nontrustees for the benefit of the stockholders, shareholders, or members of such holding company; or

(d) Any company 10 percent or more of the legal or beneficial ownership of which is directly or indirectly owned or controlled by such holding company.


citation: FIN § 1283

text: The commissioner may from time to time require, under oath or otherwise, reports from any bank holding company and its subsidiaries in such form and as to such matters as the commissioner may deem necessary and appropriate, and which are relevant to the jurisdiction and responsibilities of the commissioner under this division.


citation: FIN § 1284

text: Each bank holding company and its subsidiaries shall be subject to examination by the commissioner. The commissioner may use, for this purpose, his or her own examiners or independent public accountants who are disinterested persons. In lieu of making an examination, the commissioner may accept the examination of any holding company made by any federal agency, any other agency of this state, or any agency of any other state of the United States and may examine any such holding company in conjunction with these agencies. If the commissioner examines a bank holding company or any of its subsidiaries, other than a domestic bank, using the commissioner’s own examiners, the bank holding company shall pay, within 10 days after receipt of a statement from the commissioner, a fee of two hundred dollars ($200) per day for each examiner engaged in the examination plus, in the event it is necessary for any examiner engaged in the examination to travel outside this state, the travel expenses of the examiner. If the commissioner examines a bank holding company or any of its subsidiaries, other than a domestic bank, using independent public accountants, the bank holding company shall pay, within 10 days after receipt of a statement from the commissioner, the fee of the independent public accountants.


citation: FIN § 1285

text: With respect to a trust company controlled by or under common control with a title insurance company, the commissioner in cooperation with the Insurance Commissioner shall adopt reasonable rules and regulations for the conduct of the inspection and examination authorized by Sections 1282 and 1284. Any such examination or inspection shall be conducted pursuant to the provisions of Article 4.7 (commencing with Section 1215) of Chapter 2 of Part 2 of Division 1 of the Insurance Code.


citation: FIN § 1286

text: Nothing in this chapter shall be construed to authorize the commissioner to require reports from a national bank or to examine a national bank contrary to federal law.


citation: FIN § 1287

text:
Pursuant to the authority contained in Section 1 of Article XV of the California Constitution, the restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution shall not apply to any obligations of, loans made or arranged by, or forbearances of or arranged by, a bank holding company or a subsidiary of a bank holding company which is not a bank. As used in this section, the terms “bank holding company” and “subsidiary” mean a bank holding company or subsidiary as defined in Chapter 17 (commencing with Section 1841) of Title 12 of the United States Code.

This section creates and authorizes an exempt class of persons pursuant to Section 1 of Article XV of the Constitution. This section does not exempt a bank holding company or a subsidiary of a bank holding company from complying with all other applicable provisions of law regulating the business of these companies.

This section does not exempt a bank holding company or a subsidiary thereof from complying with all other laws or regulations governing the business in which the bank holding company or subsidiary is engaged.


citation: FIN § 1300

text:
(a) Notwithstanding the provisions of Sections 1051, 1052, and 1054 of the Labor Code and Section 2947 of the Penal Code, a bank or any affiliate thereof, licensed under the laws of any state or of the United States, or any officer or employee thereof, may deliver fingerprints taken of a director, an officer, an employee, or an applicant for employment to local, state, or federal law enforcement agencies for the purpose of obtaining information as to the existence and nature of a criminal record, if any, of the person fingerprinted relating to convictions, and to any arrest for which that person is released on bail or on his or her own recognizance pending trial, for the commission or attempted commission of a crime involving robbery, burglary, theft, embezzlement, fraud, forgery, bookmaking, receiving stolen property, counterfeiting, or involving checks or credit cards or using computers.

(b) The Department of Justice shall, pursuant to Section 11105 of the Penal Code, and a local agency may, pursuant to Section 13300 of the Penal Code, furnish to the officer of the bank or affiliate responsible for the final decision regarding employment of the person fingerprinted, or to his or her designees having responsibilities for personnel or security decisions in the usual scope and course of their employment with the bank or affiliate, summary criminal history information when requested pursuant to this section. If, upon evaluation of the criminal history information received pursuant to this section, the bank or affiliate determines that employment of the person fingerprinted would constitute an unreasonable risk to that bank or affiliate or its customers, the person may be denied employment.

(c) Banks and their affiliates shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice of all directors, officers, employees, or an applicant for employment for the purpose of obtaining information regarding the existence and content of a record of state and federal convictions and also information regarding the existence and content of a record of state and federal arrests for which the Department of Justice establishes that the person is free on bail, or on his or her own recognizance, pending trial or appeal.

(d) When the Department of Justice receives a request under this section for federal summary criminal history information, it shall forward the request to the Federal Bureau of Investigation. Once the information is received from the Federal Bureau of Investigation, the Department of Justice shall review, compile, and disseminate the information to the federally chartered bank or affiliate pursuant to paragraph (1) of subdivision (o) of Section 11105 of the Penal Code.

(e) When the Department of Justice receives a request for federal summary criminal history information from a nonchartered bank, it shall forward the request to the Federal Bureau of Investigation. Once the information is received from the Federal Bureau of Investigation, the Department of Justice shall review and provide a fitness determination on an applicant for employment based on criminal convictions or on arrests for which the person is released on bail or on his or her own recognizance pending trial for the commission or attempted commission of crimes specified in subdivision (a).

(f) A bank or affiliate may request from the Department of Justice subsequent arrest notification service, as provided pursuant to Section 11105.2 of the Penal Code, for persons described in subdivision (a).

(g) The Department of Justice shall charge a fee sufficient to cover the cost of processing the requests described in this section.

(h) Any criminal history information obtained pursuant to this section is confidential and no recipient shall disclose its contents other than for the purpose for which it was acquired.

(i) “Affiliate,” as used in this section, means any corporation controlling, controlled by, or under common control with, a bank, whether directly, indirectly, or through one or more intermediaries.

chapter: 9. Authorizations for Banks

path: 1.1. BANKING > 9. Authorizations for Banks


citation: FIN § 1301

text:
(a) Notwithstanding Section 726 of the Code of Civil Procedure or any other provision of law to the contrary, a state or nationally chartered bank, its subsidiaries or affiliates transacting business in this state, or any successor in interest thereto, that originates, acquires, or purchases, in whole or in part, any loan secured directly or collaterally, in whole or in part, by a mortgage or deed of trust on real property, or any interest therein, may bring an action for recovery of damages, including exemplary damages not to exceed 50 percent of the actual damages, against a borrower where the action is based on fraud under Section 1572 of the Civil Code and the fraudulent conduct by the borrower induced the original lender to make that loan.

(b) The provisions of this section shall not apply to loans secured by single-family, owner-occupied residential real property, when the property is actually occupied by the borrower as represented to the lender in order to obtain the loan and the loan is for an amount of one hundred fifty thousand dollars ($150,000) or less, as adjusted annually, commencing on January 1, 1987, to the Consumer Price Index as published by the United States Department of Labor.

(c) Any action maintained under this section for damages shall not constitute a money judgment for deficiency or a deficiency judgment within the meaning of Section 580a, 580b, or 580d of the Code of Civil Procedure.


citation: FIN § 1320

text:
A bank or trust company may purchase, acquire, hold, or lease real property or an interest therein only as follows:

(a) Such as may be necessary or convenient for the use, operation or housing of its head office and branch offices, or for the storage of records or other personal property, or for office space for use by its officers or employees, or which may be reasonably necessary for future expansion of its business, or which is otherwise reasonably related to the conduct of its business. Real property used by a bank as its banking premises may include in addition to the space required for the transaction of its business other space which may be let as a source of income.

(b) Such as may be conveyed to it in satisfaction in whole or in part of debts previously contracted in the course of its business.

(c) Such as it may purchase or acquire at foreclosure sales under mortgages or deeds of trust held by it, or under judgments or decrees in its favor.

(d) Such as it may purchase or otherwise acquire when necessary to minimize or prevent the loss or destruction of any lien or interest therein.

(e) Such as it may purchase or otherwise acquire pursuant to Section 1322.

A bank or trust company may sell, lease, or encumber real property or any interest therein owned by it, or, with the written approval of the commissioner, exchange the same for other real property.

article: 1. General Provisions

path: 1.1. BANKING > 10. Restrictions and Prohibited Practices > 1. General Provisions


citation: FIN § 1321

text: Any real property not held for any purpose permitted by subdivisions (a) and (e) of Section 1320 shall be sold whenever the same can be sold for an amount sufficient to reimburse the bank or trust company for all loss arising out of the loan for which such real property was security or arising out of the original investment. A bank or trust company shall not by the retention of any real property acquired pursuant to this section engage in any business not authorized by this division except to the extent necessary in the orderly liquidation of an indebtedness owing to the bank.

chapter: 10. Restrictions and Prohibited Practices

article: 1. General Provisions


citation: FIN § 1322

text:
(a) The Legislature finds and declares:

(1) That it is necessary to increase job opportunities in real estate development and construction and to provide additional housing and commercial facilities in this state.

(2) That within the commercial banking community there exists the expertise and ability to promote and assist in expansion of real estate development projects in this state.

(3) That it is proper and appropriate to utilize that expertise and ability by authorizing commercial banks to engage in real estate development and management on an entrepreneurial basis.

(b) As used in this section, “real property investment” means all forms of investing in real property, whether direct or in the form of partnerships, joint ventures, or other methods of investment. It includes, but is not limited to, the purchasing, subdividing, and developing of real property or any interest therein, the building of residential housing or commercial improvements, and the owning, renting, leasing, managing, operating for income, or selling of that property.

(c) A commercial bank may acquire and hold stock of one or more corporations the primary activities of which are engaging in real property investment, in which event the sum of (1) investments made by a commercial bank pursuant to the authority of this subdivision, (2) any loans and guarantees extended by a commercial bank to, or for the benefit of, corporations whose stock it holds pursuant to the authority of this subdivision, and (3) real property investments made pursuant to the authority of subdivision (d), unless a higher percentage is approved by the commissioner in writing, shall not exceed 10 percent of the total assets of the bank.

(d) A commercial bank may engage in real property investment. The total of all real property investments made pursuant to the authority of this subdivision, unless a higher percentage is approved by the commissioner in writing, shall not exceed the total shareholders’ equity of the bank.

(e) Prior to initially engaging in real property investment activities authorized by this section, a commercial bank shall make application with the commissioner for approval of its general plan of real property investment. The application for approval shall be in letter form, shall contain a copy of the general plan for real property investment as approved or adopted by the board of directors of the bank, which shall include a brief description of either the activities of the corporations the bank will invest in or the activities the bank will engage in, or both, the approximate amount to be invested, the extent, if any, of diversification of those activities or investment, and the approximate date of the initial investment, and shall be signed by the chief executive officer of the bank. Unless the commissioner finds (1) that the capital, assets, management, earnings, and liquidity of the commercial bank are, on a composite basis, not satisfactory, or (2) that the plan for the commercial bank to engage in real property investment or to acquire and hold the stock of one or more real property investment corporations is unsafe or unsound, the commissioner shall approve the application. An application for approval shall be deemed approved on the 46th day after the application is filed with the commissioner, unless the commissioner earlier makes a final decision on the application or extends the period for approving or denying the application. For purposes of this subdivision, an application for approval shall be deemed to be filed with the commissioner on the date when the application, substantially in compliance with the requirements of this subdivision, is received by the commissioner. Upon the filing of the application for approval, the applicant shall pay to the commissioner a filing fee of five hundred dollars ($500).

(f) The legality of any investment lawfully made pursuant to this section as it read prior to the amendment of this section shall not be affected by the existing form of this section, nor shall this section be construed to require the changing of any investments heretofore lawfully made.

article: 1. General Provisions


citation: FIN § 1323

text: Any director, officer, or employee of a bank or of a foreign banking corporation who asks for or receives, or consents or agrees to receive, any commission, emolument, or gratuity or any money, property, or thing of value for his own personal benefit or of personal advantage for procuring or endeavoring to procure for any person any loan from such bank, or the purchase or discount of any note, draft, check, bill of exchange, or other obligation by such bank, or for permitting any person to overdraw any account with such bank, is guilty of a felony.

article: 1. General Provisions


citation: FIN § 1324

text: Any director, officer, agent, or employee of any bank who knowingly receives or possesses himself or herself of any of its property otherwise than in payment of a just demand, and with intent to defraud, omits to make or cause to be made a full and true entry thereof in its books and accounts or concurs in omitting to make any material entry thereof is guilty of a felony.

article: 1. General Provisions


citation: FIN § 1325

text: Any director, officer, agent, or employee of a bank who knowingly concurs in making or publishing any written report, exhibit, or statement of its affairs or pecuniary condition containing any material statement which is false, or having the custody of its books willfully refuses or neglects to make any proper entry in such books as required by law, or to exhibit or allow the same to be inspected or extracts to be taken therefrom by the commissioner or his or her deputies or examiners, is guilty of a felony.

article: 1. General Provisions


citation: FIN § 1326

text: No bank shall publish a statement of its resources or liabilities in connection with those of any other bank, unless such statement shall show the resources and liabilities of each bank separately.

article: 1. General Provisions


citation: FIN § 1327

text:
(a) 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 fact and is directly or by inference derogatory to the financial condition or affects the solvency or financial standing of any bank 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 punishable by a fine of not more than one thousand dollars ($1,000), or by imprisonment for not more than one year, or both.

(b) The provisions of Section 329 shall not apply to this section.

article: 1. General Provisions


citation: FIN § 1328

text:
(a) A bank or trust company may engage in the business of renting safe deposit boxes and may receive personal property for safekeeping and storage on its banking premises.

(b) A copy of any safe deposit rental agreement, or personal property safekeeping and storage agreement, which is prepared by the bank or trust company and signed by the customer shall be delivered to the customer at the time the agreement is signed if the agreement is signed at a place of business of the bank or trust company. If the agreement is not signed at a place of business of the bank or trust company, the bank or trust company shall mail or deliver a copy of the agreement to the customer within 10 calendar days after the bank or trust company receives it. The contract shall not contain any blank spaces to be filled in after the customer signs the contract. If more than one customer has signed the agreement, the bank or trust company may comply with this section by mailing or delivering the copy to any one of the customers who reside at the same address. A copy shall also be mailed or delivered to any other customer who has signed the agreement and who does not reside at the same address. As used in this section, “copy” means a reproduction, facsimile, or duplicate. A bank or trust company which fails to comply with this section is liable to its customer for any actual damages suffered by the customer as a result of that failure. The remedy provided by this section is nonexclusive and is in addition to any remedies or penalties available under other laws of this state.

article: 1. General Provisions


citation: FIN § 1329

text:
(a) In this section, “subject person,” when used with respect to a bank, means any director or officer of the bank, any controlling person of the bank, or any director or officer of a controlling person of the bank. For purposes of this subdivision, “controlling person” has the meaning set forth in subdivision (c) of Section 1250.

(b) No bank shall purchase any real or personal property or any interest in real or personal property, including, but not limited to, a leasehold, or any contract arising from the sale of real or personal property or any note or bond in which any subject person of such bank is personally or financially interested, directly or indirectly, for such person’s own account, for such person, or as the partner or agent of others, without the prior approval by the board of directors of the bank and for not more than the current market value of the property purchased.

article: 1. General Provisions


citation: FIN § 1330

text:
(a) In this section, “subject person” has the meaning set forth in subdivision (a) of Section 1329.

(b) No subject person of a bank shall purchase, directly or indirectly, or be interested in the purchase of, any of the bank’s obligations or assets without the prior approval of the board of the directors of the bank and for an amount less than the then current market value. Every person violating this section shall be liable to the people of this state, for each offense, for twice the market value of the assets so purchased.

article: 1. General Provisions


citation: FIN § 1331

text:
(a) For purposes of this section, the following terms have the following meanings:

(1) “Carrying a security” means maintaining, reducing, or retiring indebtedness originally incurred to acquire a security.

(2) “Controlling person” has the same meaning specified in Section 1250.

(3) “Security” has the following meanings:

(A) When used with respect to a bank, “security” has the same meaning set forth in subdivision (c) of Section 1200.

(B) When used with respect to any other person, “security” has the same meaning set forth in Section 25019 of the Corporations Code.

(b) No bank shall acquire, hold, extend credit on the security of, or extend credit for the purpose of acquiring or carrying, any security of the bank or of any controlling person of the bank.

(c) (1) Any bank which acquires or holds securities in violation of this section shall be liable to the people of this state for twice the market, book, or face value of the securities, whichever is greatest.

(2) Any bank which extends credit in violation of this section shall be liable to the people of this state for twice the amount of the credit so extended.

(d) This section does not apply to any of the following transactions:

(1) Any acquisition or extension of credit by a bank which is necessary to reduce or prevent loss to the bank on debts previously contracted in good faith.

(2) Any redemption by a bank of any of its redeemable securities in accordance with applicable provisions of this division and of Division 1 (commencing with Section 100) of Title 1 of the Corporations Code.

(3) Any acquisition by a bank of any of its securities, other than an acquisition of the type described in paragraph (1) or (2), if the acquisition is approved in advance by the commissioner.

(e) The provisions of Section 329 shall not apply to this section.

history: (History: Amended by Stats. 2013, Ch. 334, Sec. 36. (SB 537) Effective January 1, 2014.)

article: 1. General Provisions


citation: FIN § 1332

text: Any officer, director, trustee, employee, or agent of any bank in this state, who abstracts or willfully misapplies any of the money, funds, or property of the bank, or willfully misapplies its credit, is guilty of a felony. Upon conviction, the court shall, in addition to any other punishment imposed, order the person to make full restitution to the bank. Nothing in this section shall be deemed or construed to repeal, amend or impair any existing provision of law prescribing a punishment for such an offense.

article: 1. General Provisions


citation: FIN § 1333

text:
(a) Every director of a bank in this state who does either of the following is guilty of a misdemeanor:

(1) In case of the fraudulent insolvency of such bank, the director participated in the fraud.

(2) Willfully does any act as the director that is expressly forbidden by law or willfully omits to perform any duty imposed by law upon him or her as the director.

(b) The insolvency of a bank is deemed fraudulent for the purposes of this section, unless its affairs appear upon investigation to have been administered clearly, legally, and with the same care and diligence that agents receiving a compensation for their services are bound, by law, to observe.

article: 1. General Provisions


citation: FIN § 1334

text: An officer or agent of any bank in this state, who makes or delivers any guaranty or endorsement on behalf of such bank, whereby it may become liable upon any of its discounted notes, bills or obligations, in a sum beyond the amount of loans and discounts which such bank may legally make, is guilty of a misdemeanor.

article: 1. General Provisions


citation: FIN § 1335

text: A director of a bank, organized under the laws of this state, who concurs in any vote or act of the directors of such corporation, or any of them, by which it is intended to make a loan or discount to any director of such corporation, or upon paper upon which any such director is liable or responsible to an amount exceeding the amount allowed by the statutes is guilty of a misdemeanor.

article: 1. General Provisions


citation: FIN § 1336

text: Any director, trustee, officer, or employee of any bank organized under the laws of this state, who makes or maintains, or attempts to make or maintain, a deposit of such bank’s funds with any other corporation on condition, or with the understanding, express or implied, that the corporation receiving such deposit make a loan or advance, directly or indirectly, to any director, trustee, officer, or employee of the corporation so making or maintaining or attempting to make or maintain such deposit is guilty of a felony.

article: 1. General Provisions


citation: FIN § 1337

text: Any officer or employee of any bank organized under the laws of this state, who intentionally conceals from the directors of the bank any discounts or loans made by it between the regular meetings of its board, or the purchase of any securities or the sale of its securities during that period, or knowingly fails to report to the board when required to do so by law, all discounts or loans made by it and all securities purchased or sold by it between the regular meetings of its board, is guilty of a misdemeanor.

article: 1. General Provisions


citation: FIN § 1338

text: Every officer, agent, teller, or clerk of any bank, and every individual banker, or agent, teller, or clerk of any individual banker, who receives any deposits, knowing that the bank, association, or banker is insolvent, is guilty of a misdemeanor.

article: 1. General Provisions


citation: FIN § 1339

text: Any officer, director, trustee, employee, or agent of any bank, who willfully makes a false or untrue entry in any book or record or in any report, tag, or statement of the business, affairs, or condition or in connection with any transaction of the bank, with intent to deceive any officer, director or trustee thereof, or any agent or examiner, private or official, employed or lawfully appointed to examine into its condition or into any of its affairs or transactions, or any public officer, office, or board to which the bank is required by law to report, or which has authority by law to examine into its affairs or transactions, or into any of its affairs or transactions, or who, with like intent, willfully omits to make a new entry of any matter particularly pertaining to the business, property, condition, affairs, transactions, assets, or accounts of the bank in any book, record, report, statement, or tag of the bank, or who with like intent alters, abstracts, conceals, or destroys any book, record, report, statement, or tag of the bank made, written, or kept, or required to be made, written, or kept by him or her or under his or her direction, is guilty of a felony.

article: 1. General Provisions


citation: FIN § 1340

text: Unless specifically authorized by law or by the commissioner, a bank shall not become, act as, or in any other manner assume the duties or liabilities of, a general partner. For purposes of this section, “general partner” has the meaning set forth in subdivision (m) of Section 15901.02 of the Corporations Code.

article: 1. General Provisions


citation: FIN § 1341

text: A bank, or the agent of a bank, that has received a notice pursuant to Section 7507.6 of the Business and Professions Code, shall not make a subsequent assignment to skip trace, locate, or repossess a vehicle without simultaneously, and in the same manner by which the assignment is given, advising the assignee of the assignment of the information contained in the notice. As used in this section, “assignment” has the same meaning set forth in Section 7500.1 of the Business and Professions Code.

article: 1. General Provisions


citation: FIN § 1360

text: It is the intent of the Legislature that the provisions of this article, insofar as they are contained in Regulation O (12 C.F.R. Part 215) of the Federal Reserve Board, conform, and be interpreted by anyone construing the provisions of this article to so conform, to Regulation O, to any rule or interpretation promulgated thereunder by the Board of Governors of the Federal Reserve System, and to any interpretation issued by an official or employee of the Federal Reserve System duly authorized to issue the interpretation.

article: 2. Loans to Insiders

path: 1.1. BANKING > 10. Restrictions and Prohibited Practices > 2. Loans to Insiders


citation: FIN § 1361

text:
As used in this article:

(a) “Bank” means:

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

(2) Any foreign (other nation) bank that is licensed by the commissioner under Article 3 (commencing with Section 1800) of Chapter 20 to maintain a depositary agency or branch office, as defined in Section 1750, in this state, with respect to any office of that type.

(3) Any corporation incorporated under the laws of this state that is incorporated for the purpose of engaging in, or that is authorized by the commissioner to engage in, business under Article 1 (commencing with Section 1850) of Chapter 21.

(4) Any foreign corporation that is licensed by the commissioner under Article 1 (commencing with Section 1850) of Chapter 21 to maintain an office in this state and to transact at the office business under that article, with respect to any office of that type.

(5) When used to designate a person that extends credit, any subsidiary of a bank, as defined in paragraph (1), (2), (3), or (4).

(b) “Company” has the meaning set forth in subdivision (b) of Section 215.2 of Regulation O.

(c) “Executive officer” has the meaning set forth in paragraph (1) of subdivision (e) of Section 215.2 of Regulation O. Also, “executive officer,” when used with respect to any bank of the type described in paragraph (2) or (4) of subdivision (a), includes the manager of each office of the type referred to in paragraph (2) or (4) of subdivision (a) that the bank maintains in this state.

(d) “Extension of credit” has the meaning set forth in Section 215.3 of Regulation O. However, for purposes of this subdivision, the term “member bank,” as used in Section 215.3, means a bank.

(e) “Regulation O” means Regulation O (Part 215 (commencing with Section 215.1) of Title 12 of the Code of Federal Regulations) of the Board of Governors of the Federal Reserve System.

(f) “Subsidiary” has the meaning set forth in Section 1841(d) of Title 12 of the United States Code. However, for purposes of this subdivision, the term “bank holding company,” as used in Section 1841(d) of Title 12 of the United States Code, means a bank holding company, as defined in Section 1841(a) of Title 12 of the United States Code, or a bank, and the term “board,” as used in Section 1841(d) of Title 12 of the United States Code, means the commissioner.

article: 2. Loans to Insiders


citation: FIN § 1362

text:
Sections 215.2, 215.3, 215.4, 215.5, 215.8, and 215.9 of Regulation O in all of their particulars, including footnotes, are hereby referred to, incorporated by reference into this article, and adopted, subject to the following:

(a) The term “this Subpart,” as used in the referenced sections of Regulation O, means this article.

(b) Subdivision (j) of Section 215.2 of Regulation O is not applicable. Instead, the term “member bank,” as used in the referenced sections of Regulation O, means a bank.

(c) The term “executive officer,” as used in the referenced sections of Regulation O, includes, in the case of a bank of the type described in paragraph (2) or (4) of subdivision (a) of Section 1361, the manager of each office of the type referred to in paragraph (2) or (4) of subdivision (a) of Section 1361 that the bank maintains in this state.

(d) The definition of “lending limit” in subdivision (i) of Section 215.2 of Regulation O is not applicable; instead, the term “lending limit,” as used in the referenced sections of Regulation O, means an amount equal to the limit on obligations of a single obligor set forth in Section 1481, and any reference in the referenced sections of Regulation O to the lending limit specified in subdivision (i) of Section 215.2 is considered to be a reference to the limit specified in Section 1481.

(e) (1) Any company which is majority owned by one or more executive officers or directors of a bank, individually or collectively, is deemed to be a related interest of each of those executive officers or directors for purposes of the referenced sections of Regulation O.

(2) In case an individual who is an executive officer of a bank is also a director or executive officer of a company, the company is deemed to be a related interest of the individual for purposes of the referenced sections of Regulation O except subdivision (c) of Section 215.4. However, this paragraph shall not apply to an extension of credit by a bank to any of the following companies:

(A) A bank holding company of which the bank is a subsidiary.

(B) Any subsidiary of the bank holding company.

(C) Any nonprofit company engaged in religious, charitable, educational, scientific, literary, social, or recreational purposes, provided that the individual whose position as a director or executive officer of the company at issue does not receive compensation in excess of one thousand dollars ($1,000) per year for serving as a director or executive officer of the company.

(3) In case a bank in making an extension of credit becomes subject to the requirements set forth in subdivision (b)(1)(i) of Section 215.4 of Regulation O because of paragraph (1) or (2), the bank shall be deemed to fulfill the requirement if the extension of credit is promptly reported to the board of the bank.

article: 2. Loans to Insiders


citation: FIN § 1363

text: No bank shall extend credit in an aggregate amount greater than the amount permitted in paragraph (4) of subdivision (c) of Section 215.5 of Regulation O to any company that is majority owned by one or more executive officers of the bank, individually or collectively. For purposes of paragraph (4) of subdivision (c) of Section 215.5 of Regulation O, the total amount of credit extended by the bank to the company is considered to be extended to each of those executive officers.

article: 2. Loans to Insiders


citation: FIN § 1364

text: In making any extension of credit that is subject to this article, a bank shall comply with all other applicable provisions of this division relating to extensions of credit by banks.

article: 2. Loans to Insiders


citation: FIN § 1365

text: No provision of this article or of Article 3 (commencing with Section 1480) of Chapter 14 shall apply to an advance of money made by a bank pursuant to Section 317 of the Corporations Code.

article: 2. Loans to Insiders


citation: FIN § 1366

text: A bank may make a loan, otherwise complying with the provisions of this division, for the benefit of a trust, notwithstanding that the bank or any one or more executive officers or directors of the bank are trustees of the trust.

article: 2. Loans to Insiders


citation: FIN § 1367

text: Any bank that makes an extension of credit in violation of this article is subject to a civil penalty pursuant to Section 329. Any person, other than the bank making the extension of credit, who knowingly makes or procures an extension of credit in violation of this article is guilty of a felony.

article: 2. Loans to Insiders


citation: FIN § 1380

text:
In this chapter, unless the context otherwise requires:

(a) “Authorized agency activities” means receiving deposits, renewing time deposits, closing loans, servicing loans, and receiving payments on loans and other obligations. “Authorized agency activities” includes ministerial functions such as providing loan applications, assembling documents, providing a location for returning documents necessary for making a loan, providing loan account information, receiving payments, disbursing loan funds, evaluating loan applications, and other activities that the commissioner may specify by order or regulation. However, “authorized agency activities” does not include any other activities that the commissioner may specify by order or regulation.

(b) “Insured depository institution” means any bank, savings and loan association, savings association, savings bank, or industrial loan company the deposits of which are insured by the Federal Deposit Insurance Corporation. “Insured depository institution” includes any depository institution affiliate within the meaning of Section 18(r) of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1828(r)).

chapter: 11. Agency Activities

article: 1. General Provisions

path: 1.1. BANKING > 11. Agency Activities > 1. General Provisions


citation: FIN § 1381

text: This chapter does not apply to a California state bank having an insured depository institution engage in authorized agency activities as its agent or to a California state bank engaging in authorized agency activities as agent for an insured depository institution in any case other than a case where, but for the provisions of Sections 1389 and 1396, an office of the agent would for regulatory purposes be considered to be an office of the principal.

article: 1. General Provisions


citation: FIN § 1382

text:
(a) In this section, “affiliated,” when used with respect to a California state bank and an insured depository institution, means that the California state bank controls the insured depository institution, the insured depository institution controls the California state bank, or the California state bank and the insured depository institution are under common control, directly or indirectly through one or more intermediaries. For purposes of this subdivision, “control” has the meaning set forth in Section 1250.

(b) In case a California state bank and an insured depository institution are affiliated, the prior approval requirement set forth in Section 1384 or 1391 is deemed to be satisfied if the California state bank files a notice with the commissioner and, within 30 days or any longer period to which the California state bank consents, the commissioner either (1) issues a written statement not objecting to the notice or (2) does not issue a written objection to the notice.

(c) (1) A notice filed by a California state bank under subdivision (b) shall contain the following information:

(A) The name of the California state bank.

(B) The name and location of the main or head office of the affiliated insured depository institution.

(C) A description of the proposed agency, including identification of the institution that is to be the principal, identification of the institution that is to be the agent, and specification of the activities in which the agent is to engage on behalf of the principal.

(D) Any other information that the commissioner may require.

(2) A notice filed by a California state bank under subdivision (b) shall be in the form, shall be signed in the manner, and shall, if the commissioner requires by regulation or order, be verified in the manner that the commissioner may by regulation or order require.

(3) A notice filed by a California state bank under subdivision (b) shall be accompanied by a filing fee of two hundred fifty dollars ($250).

(d) For purposes of subdivision (b), a notice by a California state bank is deemed to be filed with the commissioner at the time when the complete notice, including any amendments or supplements, containing all the information required by the commissioner, and otherwise complying with subdivision (c) is received by the commissioner.

(e) In determining whether or not to object to a notice by a California state bank, the commissioner shall consider the factors set forth in Section 1387 or 1394, as the case may be.

article: 1. General Provisions


citation: FIN § 1384

text: Notwithstanding the provisions of Chapter 4 (commencing with Section 1070), a California state bank may, with the prior approval of the commissioner and subject to any regulations that the commissioner may prescribe, have an insured depository institution engage in authorized agency activities as its agent.

article: 2. California State Bank as Principal

path: 1.1. BANKING > 11. Agency Activities > 2. California State Bank as Principal


citation: FIN § 1385

text: An application by a California state bank for approval to have an insured depository institution engage in authorized agency activities as its agent shall be in the form, shall contain the information, shall be signed in the manner, and shall, if the commissioner so requires by regulation or order, be verified in the manner that the commissioner may, by regulation or order, require.

article: 2. California State Bank as Principal


citation: FIN § 1386

text: An application by a California state bank for approval to have an insured depository institution engage in authorized agency activities as its agent shall be accompanied by a filing fee of two hundred fifty dollars ($250).

article: 2. California State Bank as Principal


citation: FIN § 1387

text:
In determining whether to approve or deny an application by a California state bank for approval to have an insured depository institution engage in authorized agency activities as its agent, the commissioner shall consider both of the following:

(a) Whether the proposed agency arrangement is consistent with the safe and sound operation of the California state bank.

(b) Any other factors that the commissioner deems relevant.

article: 2. California State Bank as Principal


citation: FIN § 1388

text: No California state bank may have an insured depository institution conduct as its agent any activity that the California state bank is prohibited from conducting itself.

article: 2. California State Bank as Principal


citation: FIN § 1389

text: No office of an insured depository institution that is performing authorized agency activities as agent for a California state bank in accordance with this article shall, on that account, be deemed to be an office of the California state bank.

article: 2. California State Bank as Principal


citation: FIN § 1390

text: If the commissioner finds that any activity performed by an insured depository institution as agent for a California state bank is not an authorized agency activity or that the agency arrangement is inconsistent with safe and sound banking practices, the commissioner may order the California state bank to terminate the agency arrangement.

article: 2. California State Bank as Principal


citation: FIN § 1391

text: Notwithstanding the provisions of Chapter 4 (commencing with Section 1070), a California state bank may, with the prior approval of the commissioner and subject to any regulations that the commissioner may prescribe, engage in authorized agency activities as agent for an insured depository institution.

article: 3. California State Bank as Agent

path: 1.1. BANKING > 11. Agency Activities > 3. California State Bank as Agent


citation: FIN § 1392

text: An application by a California state bank for approval to engage in authorized agency activities as agent for an insured depository institution shall be in the form, shall contain the information, shall be signed in the manner, and shall, if the commissioner so requires by regulation or order, be verified in the manner that the commissioner may, by regulation or order, require.

article: 3. California State Bank as Agent


citation: FIN § 1393

text: An application by a California state bank for approval to engage in authorized agency activities as agent for an insured depository institution shall be accompanied by a filing fee of two hundred fifty dollars ($250).

article: 3. California State Bank as Agent


citation: FIN § 1394

text:
In determining whether to approve or deny an application by a California state bank for approval to engage in authorized agency activities as agent for an insured depository institution, the commissioner shall consider both of the following factors:

(a) Whether the proposed agency arrangement is consistent with the safe and sound operation of the California state bank.

(b) Any other factors that the commissioner deems relevant.

article: 3. California State Bank as Agent


citation: FIN § 1395

text: No California state bank may conduct any activity as an agent for an insured depository institution that the California state bank would be prohibited from conducting as a principal.

article: 3. California State Bank as Agent


citation: FIN § 1396

text:
(a) No office of a California state bank that conducts authorized agency activities as agent for an insured depository institution in accordance with this article shall, on that account, be deemed to be an office of the insured depository institution.

(b) For purposes of this division, no insured depository institution that has a California state bank engaged in authorized agency activities as its agent shall on that account be deemed to be transacting business in this state.

article: 3. California State Bank as Agent


citation: FIN § 1397

text: If the commissioner finds that any activities performed by a California state bank as agent for an insured depository institution are not authorized agency activities or that the agency arrangement is inconsistent with safe and sound banking practices, the commissioner may order the California state bank to terminate the agency arrangement.

article: 3. California State Bank as Agent


citation: FIN § 1400

text: A bank account by or in the name of a minor shall be held for the exclusive right and benefit of such minor and shall be paid to such minor or to his order and payment so made is a valid release and discharge to the bank for such deposit or any part thereof.

chapter: 12. Deposits

article: 1. Depositors

path: 1.1. BANKING > 12. Deposits > 1. Depositors


citation: FIN § 1401

text: A bank account by or in the name of a married person shall be held for the exclusive right and benefit of the person, shall be free from the control or lien of any other person except a creditor, and shall be paid to the person or to the order of the person, and payment so made is a valid and sufficient release and discharge to the bank for the deposit or any part thereof.

article: 1. Depositors


citation: FIN § 1402

text: A bank account that is a multiple-party account as defined in Section 5132 of the Probate Code is governed by Part 2 (commencing with Section 5100) of Division 5 of the Probate Code.

article: 1. Depositors


citation: FIN § 1403

text: No bank, directly or indirectly, by any device whatever, shall pay any interest on any demand deposit except to the extent that the payment of interest on demand deposits is permitted to member banks of the Federal Reserve System or to banks whose deposits are insured by the Federal Deposit Insurance Corporation or any successor federal agency insuring bank deposits. This section shall not apply to any deposit which is payable only at an office of the bank located outside of the states of the United States and the District of Columbia.

article: 1. Depositors


citation: FIN § 1404

text: Notwithstanding Section 10145 of the Business and Professions Code or any other provision of law, but subject to the limitations of Section 854, benefits accruing from the placement in a noninterest bearing account of a financial institution of funds received by a real estate broker who collects payments or provides services in connection with a loan secured by a lien on real property under subdivision (d) of Section 10131 or Section 10131.1 of the Business and Professions Code shall inure to the broker, unless otherwise agreed in writing by the broker and the lender or note owner on the loan. A borrower shall receive at least 2 percent simple interest per annum on impound account payments covered by Section 2954.8 of the Civil Code. For purposes of this section “financial institution” means any institution the business of which is engaging in financial activities as described in Section 1843(k) of Title 12 of the United States Code.

article: 1. Depositors


citation: FIN § 1405

text:
(a) Notwithstanding Section 10145 of the Business and Professions Code or any other provision of law, benefits accruing from the placement in an interest bearing account of a financial institution of funds received by a real estate broker, as defined in Section 10131 of the Business and Professions Code, who collects payments or provides services for an institutional investor in connection with a loan secured by commercial real property may inure to the real estate broker, if agreed to in writing by the real estate broker and that institutional investor as to that loan.

(b) For purposes of this section, the following definitions shall apply:

(1) “Commercial real property” means real estate improved with other than a one-to-four family residence.

(2) “Financial institution” means any institution the business of which is engaging in financial activities as described in Section 1843(k) of Title 12 of the United States Code.

(3) “Institutional investor” has the meaning set forth in subdivision (i) of Section 50003.

article: 1. Depositors


citation: FIN § 1406

text:
(a) In this section:

(1) “Creditor” includes, but is not limited to, a depositor.

(2) “Insolvency,” when used with respect to a bank, means that the bank is unable to pay its debts as they come due.

(b) This section does not apply to any of the following:

(1) Any transaction authorized under Section 1463 or 1465.

(2) Any transaction made by a bank in the ordinary course of its business.

(c) No bank may pay or secure a creditor if the bank does so (1) after committing an act of insolvency or in contemplation of insolvency and (2) with a view to preventing the application of its assets in the manner prescribed in Chapter 7 (commencing with Section 600) of Division 1 or with a view to the preference of one creditor to another.

(d) Any transaction made by a bank in violation of this section is void.

article: 1. Depositors


citation: FIN § 1407

text: An overdraft of more than 90 days standing shall not be allowed as an asset of any bank.

article: 1. Depositors


citation: FIN § 1408

text:
A bank may act as a depositary, paying agent, trustee, or fiscal agent for the holding or handling of public funds or securities notwithstanding the fact that a member of the legislative body or an officer or employee of the depositor is an officer, employee, or stockholder of such bank, or of a holding company that owns any of the stock of such bank. Such member of a legislative body, or such officer or employee thereof, shall not be deemed “interested in any contract” as that phrase is used in Section 1090 of the Government Code, if his sole interest is the fact that he is an officer, employee, or stockholder of the bank selected to act as such depositary, paying agent or fiscal agent.

An officer or employee of a local public agency shall be deemed to have only a “remote interest” in a contract, as that phrase is used in Section 1091 of the Government Code, where such contract is entered into without competitive bidding under a procedure established by law, if his sole interest is that of an officer, director, or employee, of a bank, bank holding company, or savings and loan association with which a party to the contract has the relationship of borrower or depositor, debtor or creditor, and if the conditions of subdivision (a) of Section 1091 of the Government Code are met.

article: 1. Depositors


citation: FIN § 1409

text:
When a statement of account has been rendered by a bank to a depositor accompanied by vouchers, if any, which are the basis for debit entries in such account, such account shall, after the period of four years from the date of its rendition, in the event no objection thereto has been theretofore made by the depositor, be deemed finally adjusted and settled and its correctness conclusively presumed and such depositor shall thereafter be barred from questioning the correctness of such account for any cause.

A statement of account within the meaning of this section shall be deemed to have been rendered on a savings or time account when the bank, by making a notation in the depositor’s bank book or in some other manner reasonably calculated to give notice thereof to the depositor indicates that a certain sum is the correct balance of the account.

Nothing herein shall be construed to relieve the depositor from the duty now imposed by law of exercising due diligence in the examination of such account and vouchers, if any, when rendered by the bank and of immediate notification to the bank upon discovery of any error therein, nor from the legal consequences of neglect of such duty; nor to prevent the application of subsection (3) of Section 340 of the Code of Civil Procedure to cases governed thereby.

article: 1. Depositors


citation: FIN § 1410

text:
(a) No bank shall impose any charge on a savings account or on a depositor for the failure of a depositor to deposit, or for the late deposit of, any agreed periodic installment deposit into that account. A bank shall pay interest on savings accounts as to which a depositor has agreed to make periodic installment deposits at a rate of interest per annum that is not less than the lowest rate paid on other types of savings deposits.

(b) As used in this section “savings account” means a Christmas club account, a vacation club account, or other similar periodic installment deposit account maintained by a natural person, irrespective of its classification as a savings deposit or time deposit open account for purposes of state or federal law or regulations.

article: 1. Depositors


citation: FIN § 1411

text:
(a) For the purposes of this section:

(1) “Customer” means one or more natural persons.

(2) “Debt” means an interest-bearing obligation or an obligation which by its terms is payable in installments, which has not been reduced to judgment, arising from an extension of credit to a natural person primarily for personal, family, or household purposes, and does not mean a charge for bank services or a debit for uncollected funds or for an overdraft of an account imposed by a bank on a deposit account.

(b) A bank is limited in exercising any setoff for a debt claimed to be owed to the bank by a customer in that a setoff shall not result in an aggregate balance of less than one thousand dollars ($1,000) as shown on the records of the bank for all demand deposit accounts maintained by a customer with the bank or any branch thereof.

(c) Not later than the day following the exercise of any setoff with respect to a deposit account for any debt claimed to be owed to the bank by a customer, the bank shall deliver to each customer personally or send by first-class mail postage prepaid to the address of each customer as shown on the records of the bank a written notice in at least 10-point type containing the following:

(1) A statement that the bank has set off a debt or a portion thereof against the customer’s deposit account, identifying the account, and giving the respective balances before and after the setoff.

(2) A statement identifying the debt set off against the account and giving the respective balances due before and after the setoff.

(3) A statement that if the customer claims that the debt has been paid or is not now owing, or that the funds in the deposit account consist of moneys expressly exempt pursuant to Chapter 4 (commencing with Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, and listed in the notice, the customer may execute and return the notice to the bank by mail at the address shown or personally to the bank branch where the customer’s account is maintained not later than 20 days after the date of mailing or personal delivery.

(4) A statement that if the notice is executed and returned, the bank may file an action in court to collect the debt; that if a lawsuit is filed, the customer will be notified and have an opportunity to appear and defend; and that if the bank is successful, the customer will be liable for court costs, and attorney’s fees, if the debt so provides.

(5) A response form in at least 10-point type containing substantially the following:“The debt described in the Notice of Setoff received from the bank is ____ is not ____ my debt or the debt of another person in whose name the account is maintained. “I claim that the debt:has been paid.is not now owing.is not subject to setoff because the money in the account is: Paid earnings (CCP 704.070) Proceeds from execution sale of or insurance for loss of a motor vehicle (CCP 704.010) Proceeds from execution sale of household furnishings or other personal effects (CCP 704.020) Relocation benefits (CCP 704.180) Life insurance proceeds (CCP 704.100) Disability and health insurance benefits (CCP

704.130) Workers’ compensation benefits (CCP 704.160) Unemployment or strike benefits (CCP 704.120) Retirement benefits including, but not limited to, social security benefits (CCP 704.080, 704.110, 704.115) Public assistance benefits including welfare payments and supplemental security income (SSI) or charitable aid (CCP 704.170) Proceeds from sale of or insurance for damage or destruction of a dwelling (CCP 704.720, CCP 704.960) Proceeds from execution sale of or insurance for loss of tools of a trade (CCP 704.060) Award of damages for personal injury (CCP 704.140) or wrongful death (CCP 704.150) Financial aid paid by an institution of higher education to a student for expenses while attending school (CCP 704.190) “I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.Date: Signed: ” (Customer)(d) If the response form described in subdivision (c) executed by the customer is received by the bank not later than 20 days after the date of mailing or personal delivery of the written notice, the amount of the setoff for any debt claimed to be owed to the bank by a customer, and any bank service charges resulting from the setoff, shall be reversed and such amount shall be credited to the deposit account not later than the end of the business day following receipt of such executed response form.

(e) The limitations provided in this section do not apply to a deposit account, other than a demand deposit account, in which the bank has a security interest expressed by a written contract as collateral for the debt owing to the bank by the customer.

(f) The limitations provided in this section do not apply when a customer previously has authorized a bank in writing to periodically debit a deposit account as the agreed method of payment of the debt.

(g) The limitations provided in this section shall apply only to the exercise by a bank a setoff with respect to debts claimed to be owing to it by customers on or after July 1, 1976.

(h) Nothing in this section shall prejudice a person’s right to assert exemptions under Chapter 4 (commencing with Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, or to assert a claim or defense as to the validity of the debt, in a judicial proceeding.

article: 1. Depositors


citation: FIN § 1415

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

(1) “Nonqualifying account” means a deposit account, other than a demand deposit account, that is not a qualifying account.

(2) “Qualifying account” means a deposit account, other than a demand deposit account, through which a bank’s depositors may obtain chances to win prizes in a savings promotion.

(3) “Savings promotion” means a contest or promotion to encourage savings deposits that is sponsored by one or more banks, or by a banking trade association or its subsidiary in conjunction with one or more banks, and in which bank depositors are offered a chance to win designated prizes.

(b) A bank may sponsor or participate in a savings promotion if all of the following requirements are satisfied:

(1) Bank depositors are not required to pay any fee or otherwise provide any consideration in order to enter the savings promotion.

(2) All material terms of, and fees charged by a bank in connection with, a qualifying account are comparable to those of comparable nonqualifying accounts offered by the bank.

(3) Each entry in the savings promotion has an equal chance of winning.

(4) Participants in the savings promotion are not required to be present at a prize drawing in order to win.

(c) For purposes of this section, a depositor’s deposit of at least a specified amount of money in a qualifying account, which is required in order to enter the savings promotion, is not consideration if the interest rate associated with the qualifying account is not reduced, as compared to comparable nonqualifying accounts offered by the bank, to account for the possibility of winning a prize.

(d) A savings promotion offered by a bank shall not be considered a lottery within the meaning of Section 319 or 319.3 of the Penal Code, or a raffle within the meaning of Section 320.5 of the Penal Code.

history: (History: Added by Stats. 2018, Ch. 847, Sec. 1. (SB 1055) Effective January 1, 2019.)

article: 1. Depositors


citation: FIN § 1420

text:
As used in this article:

(a) “Depository institution” means any of the following:

(1) Any insured bank as defined in Section 3 of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.) or any bank which is eligible to make application to become an insured bank under Section 5 of the act.

(2) A mutual savings bank as defined in Section 3 of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.) or any bank which is eligible to make application to become an insured bank under Section 5 of the act.

(3) A savings bank as defined in Section 3 of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.) or any bank which is eligible to make application to become an insured bank under Section 5 of the act.

(4) An insured credit union as defined in Section 101 of the Federal Credit Union Act (12 U.S.C. Sec. 1751 et seq.) or any credit union which is eligible to make application to become an insured credit union pursuant to Section 201 of that act.

(5) Any member as defined in Section 2 of the Federal Home Loan Bank Act (12 U. S.C. Sec. 1421 et seq.).

(6) Any insured institution as defined in Section 401 of the National Housing Act (12 U.S.C. Sec. 1701 et seq.) or any institution which is eligible to make application to become an insured institution under Section 403 of that act.

(b) “Deposit account” means an account in a depository institution on which the account holder is permitted to make withdrawals from time to time in person by negotiable or transferable instrument, payment orders of withdrawal, telephone transfers, or other similar items for the purpose of making payments or transfers to third persons or others. The term includes demand deposits, negotiable order of withdrawal draft accounts, savings deposits subject to automatic transfers, share draft accounts, and all savings deposits and share accounts, other than time deposits.

path: 1.1. BANKING > 12. Deposits > 2. Disclosure of Delayed Availability Policy


citation: FIN § 1421

text:
(a) Prior to opening a deposit account a depository institution shall provide a written disclosure to the potential customer of its general policy with respect to when a customer may withdraw funds deposited by check or similar instrument into the customer’s deposit account.

(b) A depository institution shall furnish its customers preprinted deposit slips, envelopes for automatic teller machine deposits, or other individual notice bearing a conspicuous summary statement of its general policy with respect to when a customer may withdraw funds deposited by check or similar instrument into the customer’s deposit account; and, in the case of a particular deposit by check or similar instrument into a deposit account for which funds may not be immediately available for withdrawal, provide specific notice of the time the customer may withdraw such funds.

article: 2. Disclosure of Delayed Availability Policy


citation: FIN § 1422

text: For the purposes of computing the amount of interest or dividends payable with respect to an interest-bearing deposit account, a depository institution shall not delay beginning to compute interest on funds deposited by check or similar instrument to such an account beyond the date on which that depository institution receives provisional credit for the check or similar instrument. However, the payment of interest with respect to funds deposited by check or similar instrument which is returned unpaid shall not be required.


citation: FIN § 1423

text:
Except as otherwise provided in this section, any depository institution which fails to comply with any requirement imposed pursuant to this article shall be liable to the aggrieved party in an amount equal to the sum of any actual damage sustained by the person as a result of the failure; and, in the case of an individual action an additional amount as the court may allow, except that the amount shall not be less than fifty dollars ($50) or greater than five hundred dollars ($500); or, in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery in any class action or series of class actions arising out of the same failure to comply by the same depository institution shall not be more than the lesser of five hundred thousand dollars ($500,000) or 1 percent of the net worth of the depository institution; and, in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court.

In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance, the resources of the depository institution, the number of persons adversely affected, and the extent to which the failure of compliance was intentional.

A depository institution may not be held liable in any action brought under this section for a violation of this article if the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction and programming, and printing errors. An error of legal judgment with respect to a person’s obligations under this article shall not constitute a bona fide error.

Any action under this section may be brought in any court of competent jurisdiction, within one year from the date of the occurrence of the violation.

No provision of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the Federal Reserve Board or in conformity with any interpretation or approval by an official or employee of the Federal Reserve System duly authorized by the board to issue interpretations or approvals under such procedures as the board may prescribe therefor, notwithstanding that after any act or omission has occurred, the rule, regulation, interpretation, or approval is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.


citation: FIN § 1424

text: The commissioner shall issue administrative regulations to define a reasonable time for permitting customers to draw on items received for deposit in the customer’s account. It is the public policy of this state to provide retail banking customers with the right to withdraw against items deposited with any depository institution located in this state within a reasonable period of time.


citation: FIN § 1425

text:
Pursuant to Section 1424, the commissioner shall promulgate regulations which shall be reviewed annually to establish a reasonable period of time within which a depository institution must permit a customer to draw as a matter of right on an item which has been received for deposit in the customer’s account.

In determining what constitutes a reasonable period of time the commissioner shall consider the following factors:

(a) The actual time for processing and transport between the depository and payer institutions.

(b) The fastest air transport time between depository and payer institutions to be used for purposes of setting the reasonable time for transport.

(c) The most expeditious route and means for processing of returned items.


citation: FIN § 1426

text: The commissioner is authorized to gather from depository institutions such information as may be necessary for the formulation and promulgation of the regulations required by Section 1424.


citation: FIN § 1427

text: The first regulations issued pursuant to this article shall be issued on or before July 1, 1984.


citation: FIN § 1428

text: The commissioner is authorized to issue regulations which provide for a different period of time for withdrawal as a matter of right against deposited items, if there has been a determination that the application of the regulations adopted pursuant to this article would result in unsafe or unsound practices by a depository institution subject to the regulatory jurisdiction of the commissioner.


citation: FIN § 1429

text:
(a) Funds deposited in an account at a depository institution shall be available on the second business day after the business day on which those funds are deposited in the case of a cashier’s check, certified check, teller’s check, or depository check subject to the following:

(1) The check is endorsed only by the person to whom it was issued.

(2) The check is deposited in a receiving depository institution that is staffed by individuals employed by that institution.

(3) The check is deposited with a special deposit slip that indicates it is a cashier’s check, certified check, teller’s check, or depository check, as the case may be.

(4) The check is deposited into an account in the name of a customer that has maintained any account with the receiving depository institution for a period of 60 days or more.

(5) The face amount of the check is for five thousand dollars ($5,000) or less.

In the case of funds deposited on any business day in an account at a depository institution by depository checks, the aggregate amount of which exceeds five thousand dollars ($5,000), this subdivision shall apply only with respect to the first five thousand dollars ($5,000) of the aggregate amount.

(b) Subdivision (a) does not apply to a depository check if the receiving depository institution reasonably believes that the check is uncollectible from the originating depository institution. For purposes of this subdivision, “reasonable cause to believe” requires the existence of facts that would cause a well-grounded belief in the mind of a reasonable person. These reasons shall include, but not be limited to, a belief that (1) the drawer or drawee of the depository check has been, or will imminently be, the subject of an order for relief in bankruptcy or placed in receivership or (2) the depository check may be involved in a fraud or in a scheme commonly known as “kiting.” In these situations, the depository institution electing to proceed under this subdivision shall so notify the drawer and drawee no later than the close of the next business day following deposit of the depository check.

(c) For purposes of this section, the following terms have the following meanings:

(1) “Account” means any demand deposit account and any other similar transaction account at a depository institution.

(2) “Business day” means any day other than a Saturday, Sunday, or legal holiday.

(3) “Cashier’s check” means any check that is subject to the following:

(A) The check is drawn on a depository institution.

(B) The check is signed by an officer or employee of the depository institution.

(C) The check is a direct obligation of the depository institution.

(4) “Certified check” means any check with respect to which a depository institution certifies the following:

(A) That the signature on the check is genuine.

(B) The depository institution has set aside funds that are equal to the amount of the check and will be used only to pay that check.

(5) “Depository check” means any cashier’s check, certified check, teller’s check, and any other functionally equivalent instrument, as determined by the Board of Governors of the Federal Reserve System or the commissioner.

(6) “Depository institution” has the meaning given in clauses (i) to (vi), inclusive, of Section 19(b)(1)(A) of the Federal Reserve Act.

(7) “Teller’s check” means any check issued by a depository institution and drawn on another depository institution.

(d) Except for the specific circumstances and checks described in this section, this section is not intended to restrict or preempt the regulatory authority of the commissioner.

(e) In the event of a suspension or modification of any similar provisions in the federal Expedited Funds Availability Act, the effect of this section shall be similarly suspended or modified.


citation: FIN § 1440

text: Any bank which delivers or has heretofore delivered to the State Treasurer pursuant to law any unclaimed or abandoned deposit shall not thereafter be liable to any person for the same and any action which may be brought by any person against a bank for money so delivered to the State Treasurer shall be defended by the Attorney General without cost to the bank.

article: 3. Dormant Accounts

path: 1.1. BANKING > 12. Deposits > 3. Dormant Accounts


citation: FIN § 1450

text:
Notice to any bank of an adverse claim (the person making the adverse claim being hereafter called “adverse claimant”) to a deposit standing on its books to the credit of or to personal property held for the account of any person shall be disregarded, and the bank, notwithstanding the notice, shall honor the checks, notes, or other instruments requiring payment of money by or for the account of the person to whose credit the account stands and on demand shall deliver that property to, or on the order of, the person for whose account the property is held, without any liability on the part of the bank; subject, however, to the exceptions provided in subdivisions (a) and (b):

(a) If an adverse claimant delivers to the bank at the office at which the deposit is carried or at which the property is held an affidavit of the adverse claimant stating that of the adverse claimant’s own knowledge the person to whose credit the deposit stands or for whose account the property is held is a fiduciary for the adverse claimant and that the adverse claimant has reason to believe the fiduciary is about to misappropriate the deposit or the property, and stating the facts on which the claim of fiduciary relationship and the belief are founded, the bank shall refuse payment of the deposit and shall refuse to deliver the property for a period of not more than three court days (including the day of delivery) from the date that the bank received the adverse claimant’s affidavit, without liability on its part and without liability for the sufficiency or truth of the facts alleged in the affidavit.

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

(c) This section shall be applicable even though the name of the person appearing on the bank’s books to whose credit the deposit stands or for whose account the property is held is modified by a qualifying or descriptive term such as “agent,” “trustee,” or other word or phrase indicating that the person may not be the owner in his or her own right of the deposit or property.

(d) Nothing in the California Multiple-Party Accounts Law contained in Part 2 (commencing with Section 5100) of Division 5 of the Probate Code limits the applicability of this section.

(e) For purposes of this section, the term “office at which the deposit is carried” shall mean the branch, office, or other location where the account containing the subject deposit is carried or maintained.

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

history: (History: Amended by Stats. 2012, Ch. 484, Sec. 13. (AB 2364) Effective January 1, 2013.)

chapter: 13. Withdrawals and Collections

article: 1. General

path: 1.1. BANKING > 13. Withdrawals and Collections > 1. General


citation: FIN § 1451

text: When the depositor of a commercial or savings account has authorized any person to make withdrawals from the account, the bank, in the absence of written notice otherwise, may assume that any check, receipt, or order of withdrawal drawn by such person in the authorized form or manner, including checks drawn to his personal order and withdrawal orders payable to him personally, was drawn for a purpose authorized by the depositor and within the scope of the authority conferred upon such person.

article: 1. General


citation: FIN § 1452

text:
A bank need not recognize or give any effect to (1) any claim to a deposit of cash or securities standing on its books to the credit of, or held by it for the account of, any corporation, firm or association in occupied territory or (2) any advice, statute, rule or regulation purporting to cancel or to give notice of the cancellation of the authority of any person at the time appearing on the books of such bank as authorized to withdraw or otherwise dispose of cash or securities of such corporation, firm or association, unless such bank is required so to do by appropriate process procured against it in a court of competent jurisdiction in the United States in a cause therein instituted by or in the name of such corporation, firm or association, or unless the person making such claim or giving such advice or invoking such statute, rule or regulation, as the case may be, shall execute to such bank, in form and with sureties acceptable to it, a bond indemnifying it from any and all liability, loss, damage, costs and expenses for and on account of recognizing or giving any effect to such claim, advice, statute, rule or regulation.

For the purposes of this section (1) the term “occupied territory” shall mean territory occupied by a dominant authority asserting governmental, military or police powers of any kind in such territory, but not recognized by the United States as the de jure government of such territory, and (2) the term “corporation, firm or association in occupied territory” shall mean a corporation, firm or association which has, or at any time has had, a place of business in territory which has at any time been occupied territory.

The provisions of this section shall be effective only in cases where (1) such claim or advice purports or appears to have been sent from or is reasonably believed to have been sent pursuant to orders originating in, such occupied territory during the period of occupation, or (2) such statute, rule or regulation appears to have emanated from such dominant authority and purports to be or to have been in force in such occupied territory during the period of occupation.

This section applies to claims, advices, statutes, rules or regulations given or invoked either before or after the effective date of this section.

article: 1. General


citation: FIN § 1455

text: Whenever a bank certifies a check, the amount thereof shall be immediately charged against the account of the drawer.

article: 2. Certified Checks

path: 1.1. BANKING > 13. Withdrawals and Collections > 2. Certified Checks


citation: FIN § 1456

text:
It shall be unlawful for any officer or employee of a bank to certify any check drawn upon such bank, unless the drawer has on deposit with the bank, at the time such check is certified, an amount to his credit on the books of the bank not less than the amount specified therein.

Any bank officer or employee who wilfully violates the provisions of this section or who resorts to any device or receives any fictitious obligations directly or indirectly in order to evade the provisions of this section is guilty of a felony.

article: 2. Certified Checks