Additional Enforcement Provisions - - CA Financial

Section § 2148

If a commissioner notices a licensee breaking state laws or engaging in unsafe practices, they can order the licensee to stop and follow state laws. The licensee will have the opportunity to explain why the order shouldn’t be enforced.

If, after a hearing, the commissioner confirms these violations, they can issue a final order requiring compliance. The licensee must follow this order unless they legally challenge it within 10 days.

(a) If it appears to the commissioner that a licensee is violating or has violated, or is failing or has failed to comply with any law of this state, the commissioner may direct the licensee to comply with the law by an order issued under the commissioner’s official seal, or if it appears to the commissioner that any licensee is conducting or has conducted its business in an unsafe or injurious manner, the commissioner may in like manner direct it to discontinue the unsafe or injurious practices. The order shall require the licensee to show cause before the commissioner, at a time and place to be fixed by the commissioner, as to why the order should not be observed.

(b) If, upon any hearing held pursuant to subdivision (a), the commissioner finds that the licensee is violating or has violated, or is failing or has failed to comply with any law of this state or is conducting or has conducted its business in an unsafe or injurious manner, the commissioner may make a final order directing it to comply with the law or to discontinue the unsafe or injurious practices. A licensee shall comply with the final order unless, within 10 days after the issuance of the order, its enforcement is restrained in a proceeding brought by the licensee.

licensee violations compliance order unsafe business practices commissioner authority state law compliance cease unsafe practices hearing process show cause final order restraining enforcement business regulation legal challenge injurious conduct licensee hearing state violations

(Amended by Stats. 2022, Ch. 188, Sec. 7. (AB 2433) Effective January 1, 2023.)

Section § 2149

If a licensed money transmission business in California is found violating regulations, not cooperating with investigations, involved in fraud, or is financially unstable, the commissioner can suspend or revoke their license. This action follows a notice and hearing process. This applies if their actions conflict with public interest or they've engaged in unsafe practices. The commission can also act if the business is insolvent, bankrupt, has poor management, or other disqualifying conditions that would've initially prevented licensing. The size, condition, and history of the business can also impact this decision.

(a) The commissioner may issue an order suspending or revoking a license, or taking possession of and placing a licensee in receivership, if after notice and an opportunity for hearing, the commissioner finds that:

(1) The licensee is violating this division or a regulation adopted or an order issued under this division, or a condition of approval issued under this division.

(2) The licensee does not cooperate with an examination or investigation by the commissioner.

(3) The licensee engages in fraud, intentional misrepresentation, or gross negligence.

(4) The competence, experience, character, or general fitness of the licensee, or any director, officer, employee, or person in control of a licensee, indicates that it is not in the public interest to permit the person to provide money transmission services.

(5) The licensee engages in an unsafe or unsound practice.

(6) The licensee is insolvent, suspends payment of its obligations, or makes a general assignment for the benefit of its creditors.

(7) The licensee does not remove an agent after the commissioner issues and serves upon the licensee a final order including a finding that the agent has violated this division.

(8) The licensee has applied for an adjudication of bankruptcy, reorganization, arrangement, or other relief under any bankruptcy, reorganization, insolvency, or moratorium law, or any person has applied for any such relief under that law against the licensee and the licensee has by any affirmative act approved of or consented to the action or the relief has been granted.

(9) Any fact or condition exists that, if it had existed at the time when the licensee applied for its license, would have been grounds for denying the application.

(b) In determining whether a licensee is engaging in an unsafe or unsound practice, the commissioner may consider the size and condition of the licensee’s provision of money transmission services, the magnitude of the loss, the gravity of the violation of this division, and the previous conduct of the person involved.

money transmission services license suspension license revocation receivership commissioner's authority violation of regulations fraud gross negligence public interest unsafe practice financial instability insolvency bankruptcy investigation cooperation management competence

(Amended by Stats. 2012, Ch. 356, Sec. 25. (SB 979) Effective January 1, 2013.)

Section § 2150

This law allows the commissioner to suspend or revoke an agent's designation after a hearing if the agent violates certain rules. Key reasons for such action include breaking regulations, not cooperating with investigations, fraud, gross negligence, having a history of anti-money laundering convictions, or posing a risk to public interest due to poor competence or unethical behavior. Agents engaged in unsafe practices, making false statements, or working with poorly managed licensees could also face suspension. The commissioner also assesses the severity of risky practices when making decisions. Note that individuals with an active order against them aren't allowed to be appointed as agents.

(a) The commissioner may issue an order suspending or revoking the designation of an agent if, after notice and an opportunity for hearing, the commissioner finds that:

(1) The agent violated this division or a regulation adopted or an order issued under this division.

(2) The agent did not cooperate with an examination or investigation by the commissioner.

(3) The agent engaged in fraud, intentional misrepresentation, or gross negligence.

(4) The agent is convicted of a violation of a state or federal anti-money laundering statute.

(5) The competence, experience, character, or general fitness of the agent, or any director, officer, employee, or person in control of the agent, indicates that it is not in the public interest to permit the agent to provide money transmissions.

(6) The agent is engaging in an unsafe or unsound practice.

(7) The agent has made or caused to be made in any application or report filed with the commissioner or in any proceeding before the commissioner, any statement that was at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or has omitted to state in any of those applications, reports, or proceedings any material fact which is required to be stated therein.

(8) The agent is an agent of a licensee who, because of its operations and financial condition, is not competent to supervise and monitor the agent.

(9) The agent will not comply with all applicable provisions of this division and of any regulation or order issued under this division.

(b) In determining whether an agent is engaging in an unsafe or unsound practice, the commissioner may consider the size and condition of the agent’s provision of money transmission services, the magnitude of the loss, the gravity of the violation of this division or a rule adopted or order issued under this division, and the previous conduct of the agent.

(c) No licensee shall appoint as an agent any person with respect to whom an order issued under this section is in effect.

(d) No person with respect to whom an order issued under this section is in effect shall become or continue to be an agent of any licensee.

(e) If applicable, the commissioner may disclose to the licensee criminal history information upon which an order is based.

agent suspension revocation of agent commissioner authority money transmission anti-money laundering violations fraudulent activities gross negligence public interest unsafe practices false statements licensee supervision agent regulation cooperation with investigations criminal history disclosure competence and experience

(Amended by Stats. 2012, Ch. 356, Sec. 26. (SB 979) Effective January 1, 2013.)

Section § 2150.1

This law allows a licensee, like a business, to challenge the actions of a commissioner if the commissioner takes control of their property or business. If the licensee feels wronged, they can ask the court to stop the commissioner from further action within 10 days of the takeover. The court will hold a hearing to decide if the commissioner should return control back to the licensee.

(a) Every order, decision, or other official act of the commissioner is subject to review in accordance with law.

(b) Whenever the commissioner has taken possession of the property and business of any licensee, the licensee, within 10 days after that taking, if it deems itself aggrieved thereby, may apply to the superior court in the county in which the head office of the licensee is located to enjoin further proceedings. The court, after citing the commissioner to show cause why further proceedings should not be enjoined and after a hearing and a determination of the facts upon the merits, may dismiss the application or enjoin the commissioner from further proceedings and direct the commissioner to surrender the property and business to the licensee.

commissioner review licensee property possession business takeover challenge superior court injunction commissioner official acts hearing on merits property control challenge court intervention business case hearing commissioner's actions review legal remedy for licensee court's power to enjoin licensee's rights commissioner show cause property and business surrender

(Added by Stats. 2011, Ch. 243, Sec. 4. (SB 664) Effective January 1, 2012.)

Section § 2150.2

This law allows a commissioner to immediately suspend or revoke a license if certain issues that pose a risk to the public interest are found. If a license is suspended or revoked, the licensee has 30 days to request a hearing. The commissioner must start a hearing within 15 business days of the request, or longer if the licensee agrees. If the hearing doesn't start on time, the suspension or revocation is automatically canceled. After the hearing, the commissioner has 30 days to decide whether to keep, change, or cancel the suspension or revocation, or else it will also be canceled. The licensee can still seek a court review even if they didn't ask for a hearing with the commissioner.

(a) If the commissioner finds that any of the factors set forth in Section 2149 is true with respect to any licensee and that it is necessary for the protection of the public interest, the commissioner may issue an order immediately suspending or revoking the licensee’s license.

(b) Within 30 days after the license is suspended or revoked pursuant to subdivision (a), the licensee may file with the commissioner an application for a hearing on the suspension or revocation.

(c) If the commissioner fails to commence a hearing within 15 business days after the application is filed with the commissioner pursuant to subdivision (b) or within a longer period of time agreed to by the licensee, the suspension or revocation shall be deemed rescinded.

(d) Within 30 days after the hearing, the commissioner shall affirm, modify, or rescind the suspension or revocation. Otherwise, the suspension or revocation shall be deemed rescinded.

(e) The right of the licensee to petition for judicial review of the suspension or revocation shall not be affected by the failure of the licensee to apply to the commissioner for a hearing on the suspension or revocation pursuant to subdivision (b).

license suspension license revocation public interest protection application for hearing commissioner decision judicial review rights suspension cancellation revocation cancellation hearing request period licensee rights regulatory compliance administrative hearing post-suspension review enforcement action hearing timeframe

(Added by Stats. 2011, Ch. 243, Sec. 4. (SB 664) Effective January 1, 2012.)

Section § 2151

This law allows a commissioner to immediately suspend or ban an agent if it's necessary to protect the public. After an order is issued, the agent or licensee can request a hearing within 30 days. The commissioner must start the hearing within 20 business days or the suspension is automatically canceled. After the hearing, the commissioner has 30 days to decide whether to uphold, change, or cancel the order. Agents can still seek a court review of the order, even if they don't request a hearing first.

(a) If the commissioner finds that any of the factors set forth in Section 2150 is true with respect to any agent and that it is necessary for the protection of the public interest, the commissioner may issue an order immediately suspending or barring that agent from continuing to be or becoming an agent of any licensee during the period for which that order is in effect.

(b) Within 30 days after an order is issued pursuant to subdivision (a), the licensee or the agent or former agent with respect to whom the order was issued may file with the commissioner an application for a hearing on the order.

(c) If the commissioner fails to commence a hearing within 20 business days after the application is filed with the commissioner pursuant to subdivision (b) or within a longer period of time agreed to by the parties, the suspension or revocation shall be deemed rescinded.

(d) Within 30 days after the hearing, the commissioner shall affirm, modify, or rescind the order.

(e) The right of the licensee or agent or former agent to petition for judicial review of the order shall not be affected by the failure of that person to apply to the commissioner for a hearing on the order pursuant to subdivision (b).

commissioner authority agent suspension public interest protection hearing request order issuance judicial review suspension rescinded licensee rights hearing timeline order affirmation order modification order rescission application for hearing immediate suspension former agent rights

(Added by Stats. 2011, Ch. 243, Sec. 4. (SB 664) Effective January 1, 2012.)

Section § 2151.1

If someone breaks the rules in this division or goes against a regulation or order related to it, the commissioner can fine them up to $1,000 for each violation. If the violation keeps happening, they can be fined $1,000 for every day it continues. Plus, they'll have to cover the costs the state spent to investigate and take legal action, including lawyer fees.

The commissioner may assess a civil penalty against a person that violates this division or a regulation adopted or an order issued under this division in an amount not to exceed one thousand dollars ($1,000) for each violation or, in the case of a continuing violation, one thousand dollars ($1,000) for each day or part thereof during which the violation continues, plus this state’s costs and expenses for the investigation and prosecution of the matter, including reasonable attorney’s fees.

civil penalty violations continuing violation daily fines state costs investigation expenses prosecution expenses attorney's fees commissioner authority regulation violation order violation penalty assessment compliance enforcement

(Amended by Stats. 2012, Ch. 356, Sec. 27. (SB 979) Effective January 1, 2013.)

Section § 2152

This law states that if someone deliberately makes a false statement or falsifies records required by law, or leaves out important information, it is considered a serious crime (a felony). Additionally, if someone knowingly carries out activities that require a license without actually having one, this is also a felony. The law also clarifies that it does not affect the state's ability to punish any act that is a crime under other laws.

(a) A person that intentionally makes a false statement, misrepresentation, or false certification in a record filed or required to be maintained under this division or that intentionally makes a false entry or omits a material entry in such a record is guilty of a felony.

(b) A person that knowingly engages in an activity for which a license is required under this division without being licensed or exempt from licensure under this division is guilty of a felony.

(c) Nothing in this division limits the power of the state to punish any person for any act that constitutes a crime under any statute.

false statement misrepresentation false certification material omission required records felony license required unlicensed activity intentionally knowingly punishable offense criminal act state power record falsification licensure exemption

(Amended by Stats. 2012, Ch. 356, Sec. 28. (SB 979) Effective January 1, 2013.)

Section § 2153

This law states that the enforcement measures mentioned here are an addition to the other powers the commissioner has to enforce the law. It means the commissioner can use more than just this division's rules to make sure the law is followed.

The enforcement provisions of this division are in addition to any other enforcement powers that the commissioner may have under law.

enforcement provisions commissioner's powers additional measures legal enforcement regulatory authority law compliance enforcement flexibility administrative powers regulatory enforcement commissioner authority supplementary enforcement law enforcement measures regulatory compliance legal enforcement actions expanded powers

(Amended by Stats. 2012, Ch. 356, Sec. 29. (SB 979) Effective January 1, 2013.)