General Provisions - Industrial Banks - Financial - CA

Section § 1530

This section clarifies that Chapter 15 repeats and simplifies existing rules from another law about how industrial banks are licensed, regulated, and how their deposits are insured. It's like an updated, easier-to-understand version of previous regulations regarding these types of banks.

Chapter 15 (commencing with Section 1530) is a restatement of Division 7 (commencing with Section 18000) as that division pertains to the licensing and regulation of industrial banks and to the insurance of deposits of industrial banks. Chapter 15 is a continuation, simplification, and recodification of the licensing and regulation of deposit-taking industrial banks.

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Section § 1531

This law states that if a California statute or regulation mentions banks or commercial banks, it automatically includes industrial banks as well. However, there are exceptions. This rule doesn't apply if the specific law says differently or in certain sections starting with Section 4800 or this division.

(a) Any reference in a provision of any statute or regulation of this state to banks or commercial banks includes industrial banks.

(b) Subdivision (a) does not apply in any of the following cases:

(1) In case the provision or a related provision expressly provides otherwise.

(2) In the case of any provision of Division 1.6 (commencing with Section 4800) or this division.

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Section § 1532

The name of the Industrial Loan Account in the Financial Institutions Fund has been changed to the Industrial Bank Account.

The Industrial Loan Account of the Financial Institutions Fund is renamed to be the Industrial Bank Account.

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Section § 1533

This law requires the commissioner to collect a yearly fee from industrial banks in California based on their total assets. The money is used to cover department expenses related to managing industrial banks and to save for unexpected costs.

Each bank must pay at least $5,000 annually, or a calculated fee based on its asset size using a specific rate table. The fee varies depending on the bank’s total assets, with larger banks paying more.

Banks with branches in other states may exclude those assets unless the commissioner decides they should be included to cover extra costs. If a bank tries to reduce its fee by misplacing assets to other states, the fee can be adjusted.

The commissioner will set a base rate that can't be more than $2.20 per $1,000 of the bank's total assets.

(a) The commissioner shall annually levy on and collect from industrial banks authorized to transact industrial banking business in this state, pro rata on the basis of total assets, an assessment in a total amount that is sufficient in the commissioner’s judgment to (1) meet the expenses of the department in administering laws relating to industrial banks or to the industrial banking business that are not otherwise provided for and (2) provide a reasonable reserve for contingencies.

(b) The amount of the annual assessment on any industrial bank authorized to transact the industrial banking business shall be the greater (1) five thousand dollars ($5,000) or (2) the sum of the products determined by multiplying (A) increments of the bank’s or trust company’s total assets by (B) percentages of the base assessment rate according to the following table:

Total Assets
(In Percentage of Base Millions)

Assessment Rate

First $2 ........................

100.0

Next $18 ........................

50.0

Next $80 ........................

12.0

Next $100 ........................

6.25

Next $800 ........................

6.0

Next $1,000 ........................

4.0

Next $4,000 ........................

3.5

Next $14,000 ........................

3.0

Next $20,000 ........................

2.5

Excess over $40,000 ........................

1.5

(c)

(1) For purposes of the annual assessment, the total assets of an industrial bank authorized to transact industrial banking business shall be determined as of a date fixed by the commissioner. However, if an industrial loan company is not authorized to transact industrial banking business as of that date but is so authorized as of the date when the annual assessment is levied, its total assets for purposes of the annual assessment shall be determined as of the date of the levy.

(2)

(A) In determining for purposes of the annual assessment on the total assets of industrial banks that are authorized to transact industrial banking business and that have one or more foreign (other state) branch offices or facilities, the assets of the foreign (other state) branch offices and facilities shall be excluded from total assets. However, the commissioner may order the assets of foreign (other state) branch offices and facilities to be included in total assets if and to the extent that it is necessary or advisable in the commissioner’s judgment to (i) meet the expenses of the department on account of foreign (other state) branch offices and facilities that are not otherwise provided for and (ii) provide a reasonable reserve for contingencies.

(B) If the commissioner finds that an industrial bank authorized to transact industrial banking business allocated any asset to a foreign (other state) branch office or facility for the purpose, in whole or in part, of reducing its annual assessment, the commissioner may, for purposes of calculating the annual assessment on the industrial bank, reallocate the asset to the industrial bank’s head office.

(d) The base assessment rate for each annual assessment shall be fixed by the commissioner but shall not exceed two dollars and twenty cents ($2.20) per one thousand dollars ($1,000) of total assets.

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