No person shall, except with the prior approval of the commissioner, acquire control of a licensee.
Chapter 8Acquisition of Control
Section § 31550
You can't take control of a business with a license without getting permission from the commissioner first.
acquire control licensee commissioner approval business ownership regulatory compliance business acquisition licensing authority ownership transfer permission requirement business regulations control acquisition approval process supervision regulated entities change of control
Section § 31551
This law says that if someone wants to take control of a company that is already licensed, the commissioner must approve their application if certain conditions are met. These conditions include that the applicant and their directors are trustworthy and financially stable, the applicant will follow all relevant laws and regulations, and any major changes they plan to make won't harm the company's safety or the public's interest. If these conditions aren't met, the commissioner can deny the application after a review process.
If the commissioner finds, with respect to an application for approval to acquire control of a licensee:
(a)CA Financial Code § 31551(a) That the applicant and the directors and officers of the applicant are of good character and sound financial standing;
(b)CA Financial Code § 31551(b) That it is reasonable to believe that, if the applicant acquires control of the licensee, the applicant will comply with all applicable provisions of this division and of any regulation or order issued
under this division; and
(c)CA Financial Code § 31551(c) That the applicant’s plans, if any, to make any major change in the business, corporate structure, or management of the licensee are not detrimental to the safety and soundness of the licensee or to the public convenience and advantage;
The commissioner shall approve the application. If, after notice and a hearing, the commissioner finds otherwise, he or she shall deny the application.
commissioner approval acquire control licensee good character financial standing comply with regulations business changes corporate structure management changes public convenience safety and soundness application denial notice and hearing process applicant's plans trustworthy directors
Section § 31551.5
This law section allows the commissioner to decide if someone applying for a financial license, or their directors or officers, are not of good character if they've been convicted of crimes related to fraud or dishonesty. If such a person plans to make significant management changes, it could be seen as harmful to the safety of the licensee and public interest. Moreover, the section notes that these are not the only reasons someone might be judged as not being of good character, leaving room for other considerations.
(a)CA Financial Code § 31551.5(a) For purposes of Section 31551, the commissioner may find:
(1)CA Financial Code § 31551.5(a)(1) That an applicant or a director or officer of an applicant is not of good character if such person has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty.
(2)CA Financial Code § 31551.5(a)(2) That an applicant’s plan to make a major change in the management of a licensee is detrimental to the safety and soundness of the licensee and to
the public convenience and advantage if the plan provides for a person who has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty to become a director or officer of the licensee.
(b)CA Financial Code § 31551.5(b) Subdivision (a) shall not be deemed to be the only grounds upon which the commissioner may find, for purposes of Section 31551, that an applicant or a director or officer of an applicant is not of good character or that an applicant’s plan to make a major change in the management of a licensee is detrimental to the safety and soundness of a licensee or to the public convenience and advantage.
financial license good character fraud conviction dishonesty applicant management change detrimental management plan safety and soundness public convenience public advantage commissioner discretion licensee management major management change
Section § 31552
This law allows the commissioner to exempt certain people or financial activities from the rules of this chapter if he or she believes it's in the public's best interest and that these exemptions won't negatively affect the overall goals of the division.
The commissioner may, by such regulations or orders as he or she deems necessary and appropriate, either unconditionally or upon specified terms and conditions or for specified periods, exempt from the provisions of this chapter any person or transaction or class of persons or transactions, if he or she finds such action to be in the public interest and that the regulation of such persons or transactions is not necessary for the purposes of this division.
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