This law gives the commissioner the authority to create, change, or cancel rules and forms needed to enforce and interpret the provisions of this division. The commissioner can define terms as long as they don't clash with what's already in the division. The commissioner can categorize people and issues differently and set rules accordingly, allowing flexibility. If a rule doesn't serve the public interest or protection, the commissioner can choose to ignore it.

This law means that if a business is governed by this division, it can't advertise any of its capital except for the money that is fully paid and any accumulated surplus. Essentially, they can't make it seem like they have more capital than what is actually available and verified.

This law states that only licensed escrow agents can publish advertisements or use materials that suggest they are in the escrow business. This includes using certain names or printed materials. If someone breaks this rule, a commissioner can order them to stop. If the person requests a hearing within 30 days of receiving the order, the order must be canceled if the hearing isn't held within 60 days.

This law states that anyone who is governed by the rules of this division is not allowed to call a transaction an 'escrow' unless it meets the official definition provided in Section 17003.

This law specifies that when dealing with escrow instructions, no one can accept or change any part that hasn't been agreed upon and signed by everyone involved. If something needs to be added, deleted, or altered, each person who initially signed or agreed to the terms must sign off on these changes.

Additionally, for Internet escrow agents, the same rules apply to electronic instructions. No changes to electronic escrow documents can be made online without all parties who originally agreed signing off on those changes electronically.

This law mandates that when escrow instructions or changes to them are signed, a copy must be immediately given to everyone who signed. For internet escrow agents, these documents should be sent electronically. If someone can't receive them online, the agent must mail a true copy within 24 hours.

When a buyer or seller signs escrow instructions, whether on paper or online, those documents must include a statement in at least 10-point font that names the license and the department issuing the license or authority for whoever is preparing the instructions. However, this requirement does not apply to any changes or additions to the original escrow instructions. This rule became active on July 1, 1993.

This section allows Internet escrow agents to keep records and submit them electronically to the commissioner. It permits electronic fund transfers between trust and interest-bearing accounts, as well as escrow accounts. Additionally, account statements can be delivered to customers via email or the Internet, unless the customer asks for a different method.

Anyone who is part of this financial regulation needs to maintain proper books, accounts, and records. These records should be detailed enough for the commissioner to see if the escrow services they conduct follow the rules and regulations set out in this division.

This law explains that the business records of anyone acting as an escrow agent can be inspected by a commissioner at any time, even without prior notice, unless they are exempt under a different section. When requested, those subject to this rule must allow their books and records to be inspected and copied.

The commissioner must examine each licensed escrow agent at least once every four years, focusing on the prior year's activities unless something found during the examination or recent audit suggests a longer period is needed. The frequency of these examinations can depend on the escrow agent's compliance and other factors set by the commissioner.

Additionally, new licensees might undergo a preliminary examination within a year of being licensed, and a regular examination within two years of receiving their license.

This law states that any costs incurred during the inspection or examination of a licensed individual or group must be covered by the person or entity being inspected. If they don't pay, the commissioner can take legal action to recover these costs. The costs are calculated based on an average hourly rate of those conducting the inspections.

Furthermore, someone isn't automatically subject to these rules unless they're officially deemed so through an administrative hearing or court decision.

This law requires licensed entities to regularly provide audited financial statements to the commissioner. They must do this both annually and whenever specially requested, covering specific time periods. If a license is revoked, a closing audit report is due within 105 days. The financial statements must include essential documents like balance sheets and income statements, prepared by an independent accountant. Exemptions and extensions can be granted by the commissioner in certain situations.

If financial reports are incomplete or contain qualified opinions, corrective actions may be required. The law also allows the commissioner to reject unsatisfactory reports and specifies potential actions if discrepancies in trust accounts occur. Moreover, while it mentions independent oversight for trust accounts, it doesn't mandate hiring a third party for reconciliation.

If a company changes accountants before they certify or report financial statements or reports, the company must notify the commissioner in writing. This notice must state if there were any disagreements with the previous accountant regarding the reports and explain any such disagreements. Additionally, the company must ask the former accountant to write a letter to the commissioner, either agreeing with the company's notice or explaining any disagreements. These documents must be submitted within 30 days of hiring the new accountant.

If someone under this set of rules doesn't file a required report, the commissioner can check their records thoroughly. If they still don't comply after being asked, they can be fined $100 per day for the first five days, then $500 each day after, for late reports.

If they disagree with this fine, they have 30 days to request a hearing. If they don't ask for a hearing in that time, the fine becomes final and must be paid within five days. If they do request a hearing, the fine should be paid within five days after a decision is made.

This law outlines rules for handling money in escrow accounts. When money is deposited in escrow, it must first go into a noninterest-bearing account in an authorized financial institution. Afterward, it can be moved to an interest-bearing account, but it must remain separate from the escrow agent's funds and be clearly labeled as escrow or trust funds. If requested, the escrow company must allow the commissioner to inspect these accounts. Additionally, escrow companies must keep separate accounts for different types of escrow transactions. Any agreement with a bank to manage these trust accounts must include a request for the bank to inform the commissioner immediately if an account closes or incurs an overdraft. This requirement does not create obligations for the bank to Fidelity Corporation or the commissioner.

This law requires that escrow companies in California keep separate trust accounts for each of their licensed locations. When transferring funds between these accounts, they must do so by writing a check and documenting the transaction with authorized instructions from the parties involved in the escrow. Each transaction needs proper documentation in the escrow files.

For Internet escrow companies, transfers from commercial banks and to cover losses can be done by wire transfer. They must keep electronic receipts of all transactions.

Escrow or trust funds held by an escrow agent cannot be used to pay off any debts or judgments against the agent, and these funds are not considered part of the agent's assets. This protection also applies to any interest earned on these funds.

This law says that you can't falsely label money in a bank as 'trust funds' or 'escrow accounts' unless that money actually belongs to clients of an escrow agency. In other words, only true escrow or trust funds can be called that; you can't misuse these labels for other funds.

This law section clarifies that the terms “trust funds” and “escrow accounts” not only cover those mentioned in specific sections but also include any funds that an escrow agent must hold according to federal or state laws or any rules set by government agencies.

This section outlines what constitutes illegal activities related to escrow transactions. Firstly, it's unlawful for anyone involved to knowingly or recklessly misuse escrow funds in a way that doesn't follow the agreed instructions, or to engage in fraud related to escrow deals. Misstating facts in any related documents is also prohibited.

Additionally, any person tied to an escrow agent who willfully steals or misuses deposited funds or property is committing a felony. If convicted, they must pay restitution. The law covers various theft-related offenses and doesn't change any existing punishments for these crimes.

Furthermore, anyone who knows about such theft or misuse must report it in writing to both the commissioner and Fidelity Corporation, without fear of civil liability unless the report is maliciously false. Reports remain confidential.

This law states that individuals who have been convicted or found liable for certain crimes within specific timeframes cannot work with or have any involvement in an escrow agent's operations in California if those crimes are related to financial misconduct or fraud.

It requires escrow agents to obtain and provide fingerprint images and criminal history checks for new employees to ensure compliance. Any breach of these rules must be reported, and confidentiality is crucial in handling criminal history information.

Violating these prohibitions is punishable by law, and the overall intent is to protect the integrity of escrow operations from potentially dishonest or fraudulent individuals.

Those with a certificate of rehabilitation may be exempt from these restrictions.

This law allows escrow agents and similar financial institutions to give written employment references about a person's criminal activities related to escrow services, such as theft or embezzlement. These references can inform if the individual's actions have been reported to federal authorities or the state's Fidelity Corporation. For immunity from being sued, the institution must send a copy of this reference to the person's last known address. However, if the information provided is false and was given knowingly and maliciously, the institution may still be held liable in court.

This law allows the commissioner to stop an escrow business from conducting certain activities if they find the business is operating unsafely, violating specific sections, or not maintaining required financial standards. If a business's actions are deemed hazardous to the public or its customers, or if it has allowed its net worth or liquid assets to fall below required levels, the commissioner can order the business to stop handling trust funds or documents. Such an order remains effective until overturned or other actions are taken. If addressed by the order, individuals are not liable for non-compliance unless they received written notice.

The business can request a hearing within 15 days to contest the order, but requesting a hearing doesn't pause the order's effects. The hearing must begin within 30 days of the request unless agreed otherwise.

If someone is involved in escrow business activities without a proper license, the commissioner can order them to stop. This includes those pretending not to be engaged in this business. If they request a hearing within 30 days of receiving the order, and it isn't held within the next 60 days, the stop order will be canceled.

This law requires anyone applying for a job with an escrow agent to complete an employment application by their first day of work. This application needs to be sent to the commissioner. People who already need to submit a statement of identity and questionnaire don't have to fill out this application. Employers can ask for more info if they want. The application covers details like previous employment, residence history, any past legal issues, and other important personal background information.

It also ensures applicants understand their information is protected by the Information Practices Act. The applicant must certify that all information provided is true under penalty of perjury. Furthermore, if anyone knows of a violation of these requirements, they are obligated to report it to the commissioner.

This law makes it illegal for anyone involved in escrow services to pay or receive commissions, fees, or other rewards for referring or managing escrow accounts, except for the normal salary of their own employees.

It also prohibits agreements that allow payment of fees or rewards to be dependent on completing certain tasks or conditions in an escrow, before the escrow is actually closed and finalized.

This law allows for certain payments to be made before an escrow closes, as long as all involved parties give written permission. However, this exception does not apply to fees, commissions, or compensations.

This law allows an escrow company to charge a fee if an escrow is delayed for at least two months or canceled, but certain conditions must be met. First, the delay or cancellation must be due to the actions or inactions of the parties involved. Second, the fee must be clearly mentioned in the written instructions, using bold font of at least 8-point size on the front page. Lastly, the main parties in the escrow must initial these fee instructions to show their agreement. This regulation applies to instructions made on or after January 1, 2008.

This law states that a joint control agent, who is responsible for managing funds related to construction projects, should not release any money to cover expenses like labor or materials unless they have clear written instructions from their clients. Before disbursing funds, the agent must ensure that the work or materials provided meet the agreed specifications in the contract.

This law allows the commissioner to censure, suspend, or bar escrow agents or related persons from employment if they violate rules or cause damage. The decision must be in the public interest, and violators will get a chance for a hearing. If a person is found guilty of certain crimes or judgments, they can also be barred from working with escrow agents.

If notified, individuals have 15 days to request a hearing; otherwise, they give up that right. During the process, those affected can't manage escrow funds unless the commissioner allows it. Details about who is barred are shared with all licensees, and barred persons can't engage in escrow activities. The law applies to any past or future violations and is flexible enough to remain effective even if parts are invalidated. Exceptions for those with rehabilitation certificates do not apply here.

This law section requires the financial commissioner to inform the Real Estate and Insurance Commissioners when any enforcement or disciplinary action is taken against a person. This is to ensure that these commissioners are aware if the person tries to work in industries they regulate.

The commissioner must share details of the actions and provide supporting documents if requested, while maintaining confidentiality. Additionally, there's an online database to identify those who've faced disciplinary actions, which links to similar databases maintained by real estate and insurance authorities.

The law protects state officials from liability for mistakenly releasing incorrect information, unless done knowingly and maliciously, or failing to release information as required by this section.

This law states that if a license holder is disciplined by California, another state, a federal agency, or another country for something related to their licensed activities, this can be used as a reason for further disciplinary action by the commissioner in California. If there's a certified record of such a disciplinary action, it will be accepted as indisputable proof of what happened.

Additionally, this section does not stop the commissioner from using other specific rules within this division to discipline a licensee who has been disciplined elsewhere.

This law states that if a person or their associates, like directors or employees, violate any part of the federal Real Estate Settlement Procedures Act or its regulations, they also break this specific division of California law.