General Provisions - Foreign (Other State) Banks - Financial - CA

Section § 1670

This section defines key terms used in California's financial statutes regarding banking business activities. A "branch business unit" and "whole business unit" are referenced definitions from another section. "Core banking business" includes actions like receiving deposits, paying checks, and making loans, and it also describes activities in trust businesses like managing fiduciary accounts. "Facility" pertains to offices in the state run by out-of-state banks that handle non-traditional banking functions. "Noncore banking business" encompasses bank activities outside of the standard core functions and those allowed by law or the commissioner, excluding prohibited activities.

In this chapter, unless the context otherwise requires:

(a) “Branch business unit” has the meaning set forth in subdivision (a) of Section 4840.

(b) “Core banking business” means the business of receiving deposits, paying checks, making loans, and other activities that the commissioner may specify by order or regulation. “Core banking business,” when used to describe the trust business, includes receiving fiduciary assets and administering fiduciary accounts.

(c) “Facility,” when used with respect to a foreign (other state) bank, means an office in this state at which the bank engages in noncore banking business but at which it does not engage in core banking business.

(d) “Noncore banking business” means all activities permissible for commercial banks, industrial banks, or trust companies, except core banking business, and except those activities prohibited by law or determined by the commissioner by regulation or order not to be noncore banking business.

(e) “Whole business unit” has the meaning set forth in subdivision (g) of Section 4840.

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Section § 1671

When you apply to the commissioner under this chapter, you must follow specific rules about how the application is written, what information it includes, and how it is signed. If the commissioner decides, you also might need to verify the application in a certain way, according to their regulations or orders.

Each application filed with the commissioner under this chapter or under any regulation or order issued under this chapter shall be in the form, shall contain the information, 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.

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Section § 1672

This law requires foreign banks—that is, banks from other states—that have branches or facilities in California to submit reports to a state official known as the commissioner. These reports need to be filed whenever and as specified by the commissioner, following any rules or orders they impose.

The reports should be in a specific format and include certain information. They must be signed, and if required, verified according to the commissioner's regulations or orders.

(a) Each foreign (other state) bank that maintains a facility or a California branch office shall file with the commissioner such reports as and when the commissioner may by regulation or order require.

(b) Each report filed with the commissioner under this chapter or under any regulation or order issued under this chapter shall be in the form, shall contain the information, 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.

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Section § 1673

This law requires foreign banks, which are banks from other states, to maintain their business records at their office location in California, unless the banking commissioner approves another location. These banks must keep their books, accounts, and records in a way specified by the commissioner.

Each foreign (other state) bank that maintains a facility (other than a foreign (other state) national bank that maintains a California branch office) and each foreign (other state) state bank that maintains a California branch office shall make, keep, and preserve at the facility or branch office or at another place that the commissioner may by regulation or order approve, the books, accounts, and other records relating to the business of the office, in the form, in the manner, and for the time that the commissioner may by regulation or order provide.

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Section § 1674

This law outlines the fees that foreign banks have to pay to the commissioner for various actions related to operating in California. If an uninsured foreign bank wants to set up a new facility, they must pay $250. To move or close an existing facility, the fee is $100. Issuing a new license costs $25. Every year, foreign banks with branches in California pay $1,000 per branch, with a minimum total fee of $3,000 and a maximum of $50,000. Banks with facilities but no branches pay $250 per facility annually.

If the commissioner needs to examine an application or a bank's operations, the bank will pay a fee covering the examiner's costs, including any travel expenses necessary for examinations conducted outside California. The same rules apply to uninsured and insured foreign banks licensed under Article 4, which concerns those without branches in the state.

Fees shall be paid to and collected by the commissioner as follows:

(a) The fee for filing with the commissioner an application by an uninsured foreign (other state) bank for approval to establish a facility is two hundred fifty dollars ($250).

(b) The fee for filing with the commissioner an application by an uninsured foreign (other state) bank that is licensed pursuant to Article 4 (commencing with Section 1710) to maintain a facility for approval to relocate or to close the facility is one hundred dollars ($100).

(d) Each foreign (other state) state bank that on June 1 of any year maintains one or more California branch offices shall pay, on or before the following July 1, a fee of one thousand dollars ($1,000) per California branch office. However, the minimum fee paid by a foreign (other state) state bank under this subdivision shall be not less than three thousand dollars ($3,000) and the maximum fee shall be not more than fifty thousand dollars ($50,000).

(e) Each foreign (other state) bank that on June 1 of any year maintains a facility but no California branch office shall pay, on or before the following July 1, a fee of two hundred fifty dollars ($250) for each facility.

(f) If the commissioner makes an examination in connection with a pending application, as described in subdivision (a) or (b), the applicant shall pay a fee for the examination, as determined by the commissioner. In determining the fee, the commissioner may use the estimated average hourly cost, including, but not limited to, overhead, for all persons performing the examination, plus, if in the opinion of the commissioner it is necessary for any examiner engaged in the examination to travel outside this state, the travel expenses of the examiner.

(g) If the commissioner makes an examination of a foreign (other state) state bank that maintains a California branch office, the bank shall pay a fee for the examination, as determined by the commissioner. In determining the fee, the commissioner may use the estimated average hourly cost, including, but not limited to, overhead, for all persons performing the examination, plus, if in the opinion of the commissioner it is necessary for any examiner engaged in the examination to travel outside this state, the travel expenses of the examiner.

(h) If the commissioner makes an examination of a facility of an uninsured foreign (other state) bank licensed under Article 4 (commencing with Section 1710), the bank shall pay a fee for the examination, as determined by the commissioner. In determining the fee, the commissioner may use the estimated average hourly cost, including, but not limited to, overhead, for all persons performing the examination, plus, if in the opinion of the commissioner it is necessary for any examiner engaged in the examination to travel outside this state, the travel expenses of the examiner.

(i) If the commissioner makes an examination of a facility of an insured foreign (other state) bank that does not maintain a California branch office, the bank shall pay a fee for the examination, as determined by the commissioner. In determining the fee, the commissioner may use the estimated average hourly cost, including, but not limited to, overhead, for all persons performing the examination, plus, if in the opinion of the commissioner it is necessary for any examiner engaged in the examination to travel outside this state, the travel expenses of the examiner.

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Section § 1675

This law states that foreign state banks are not bound by California's interest rate limits on loans or payment delays. However, these banks and their subsidiaries must still follow other relevant laws and regulations for their business activities. Importantly, it establishes foreign state banks as a special group under California's Constitution regarding interest rates.

(a) Any foreign (other state) state bank is exempted from the restrictions of Section 1 of Article XV of the California Constitution relating to rates of interest upon the loan or forbearance of any money, goods, or things in action or on accounts after demand.

(b) This section does not exempt a foreign (other state) state bank or any subsidiary from complying with all other laws and regulations governing the business in which the bank or subsidiary is engaged.

(c) This section creates and authorizes an exempt class of persons pursuant to Section 1 of Article XV of the California Constitution.

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Section § 1676

This section defines a "subject bank" as a bank based in certain U.S. territories and explains that most rules in the chapter do not apply to these banks when they operate as foreign banks with an office or federal branch in California, as licensed under Chapter 20. However, it states that a subject bank cannot simultaneously operate in California as both an out-of-state bank and a foreign national bank with a Chapter 20 license or a federal branch or agency.

(a) In this section, “subject bank” means a bank organized under the laws of any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, or the Northern Mariana Islands.

(b) Nothing in this chapter, except subdivision (c), applies to a subject bank that, as a foreign (other nation) bank, maintains an office in this state licensed under Chapter 20 (commencing with Section 1750) or a federal agency (as defined in Section 1750) or federal branch (as defined in Section 1750) in this state.

(c) No subject bank may at the same time maintain (1) as a foreign (other state) state bank, an office in this state and (2) as a foreign (other nation) bank, an office in this state licensed under Chapter 20 (commencing with Section 1750) or a federal agency (as defined in Section 1750) or federal branch (as defined in Section 1750) in this state.

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