Enforcement - Foreign (Other Nation) Credit Unions - Financial - CA

Section § 16900

In this law, the commissioner can take legal actions in court to stop violations, ensure compliance, or collect penalties related to financial regulations. The court can issue orders such as injunctions and appoint fiduciaries like receivers to manage the situation.

The fiduciaries have the authority to act on behalf of the violating party's leaders, which can include filing for bankruptcy, and they are protected from lawsuits for performing these duties.

If it's in the public interest, the commissioner can also seek restitution or damages for those harmed by the violations, and the court can award additional relief.

This law does not prevent others from bringing similar legal actions or seeking similar relief.

(a) The commissioner may bring an action in the name of the people of this state in the superior court to enjoin any violation of, to enforce compliance with, or to collect any penalty or other liability imposed under this division or any regulation or order issued under this chapter. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted, and a monitor, receiver, conservator, or other designated fiduciary or officer of the court may be granted as appropriate.

(b) A receiver, monitor, conservator, or other designated fiduciary officer of the court appointed by the court pursuant to this section may, with the approval of the court, exercise all of the powers of the defendant’s officers, directors, partners, trustees, or persons who exercise similar powers and perform similar duties, including the filing of a petition for bankruptcy. No action at law or in equity may be maintained by any party against the commissioner, or a receiver, monitor, conservator, or other designated fiduciary or officer of the court by reason of their exercising these powers or performing these duties pursuant to the order of, or with the approval of, the court.

(c) If the commissioner finds that it is in the public interest, the commissioner may include in a claim for restitution, disgorgement, or damages on behalf of the person injured by the act or practice constituting the subject matter of the action, and the court shall have jurisdiction to award ancillary relief.

(d) The provisions of this section that authorize the commissioner to bring actions and seek relief are not intended to, and do not, affect any right that any other person may have to bring the same or similar actions or to seek the same or similar relief.

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Section § 16900.5

If the commissioner believes someone is violating a specific rule or is likely to do so, they can order that person to stop unless they get a license. If the person disagrees, they can request a hearing within 30 days of the order. The commissioner has 15 business days to start the hearing, or the order is canceled unless the person agrees to more time. During the hearing, the order can be confirmed, changed, or withdrawn. Additionally, even if the person doesn't ask for a hearing, they can still take the matter to court.

(a) If the commissioner finds that any person has violated, or that there is reasonable cause to believe that any person is about to violate, Section 16020, the commissioner may order the person to cease and desist from the violation unless and until the person is issued a license.

(b)

(1) Within 30 days after an order is issued pursuant to subdivision (a), the person to whom the order is directed may file with the commissioner an application for a hearing on the order. If the commissioner fails to commence a hearing within 15 business days after the application is filed with him or her (or within such longer period to which the person consents), the order shall be deemed rescinded. At the hearing the commissioner shall affirm, modify, or rescind the order.

(2) The right of any person, to whom an order is issued under subdivision (a), to petition for judicial review of the order shall not be affected by the failure of the person to apply to the commissioner for a hearing on the order pursuant to paragraph (1).

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Section § 16901

If a person is found to have broken any rule in this chapter, the commissioner, after a notice and hearing, can order that person to pay a financial penalty as described in another section.

If, after notice and hearing, the commissioner finds that any person has violated any provision of this chapter or of any regulation or order issued under this chapter, the commissioner may order the person to pay to the commissioner a civil penalty imposed pursuant to Section 216.3.

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Section § 16902

This law states that if a foreign credit union, meaning one from another country, operates in a risky or unstable manner, or breaks any relevant laws or regulations, the commissioner may revoke or suspend its license after a notice and hearing. Possible reasons for this action include violating laws, being in a financially unstable condition, not operating its office, being insolvent (can't pay debts or liabilities exceed assets), stopping payments, seeking bankruptcy protection, having a receiver or similar figure appointed, losing its ability to do banking business legally, or if initially known facts would have led to a denial of the license application.

If, after notice and hearing, the commissioner finds any of the following with respect to a foreign (other nation) credit union that is licensed to maintain an office, the commissioner may issue an order suspending or revoking the license of the foreign (other nation) credit union.

(a) That the foreign (other nation) credit union has violated a provision of this division or of any regulation or order issued under this division or a provision of any other applicable law, regulation, or order.

(b) That the foreign (other nation) credit union is transacting the business in this state or elsewhere in an unsafe or unsound manner.

(d) That the foreign (other nation) credit union has ceased to operate its office.

(e) That the foreign (other nation) credit union is insolvent in that it has ceased to pay its debts in the ordinary course of business, it cannot pay its debts as they become due, or its liabilities exceed its assets.

(f) That the foreign (other nation) credit union has suspended payment of its obligations, has made an assignment for the benefit of its creditors, or has admitted in writing its inability to pay its debts as they become due.

(g) That the foreign (other nation) credit union is the subject of an order for relief in bankruptcy or has sought other relief under any bankruptcy, reorganization, insolvency, or moratorium law, or that any person has applied for such relief under any such law against the foreign (other nation) credit union, and the foreign (other nation) credit union has by any affirmative act approved of or consented to the action or the relief has been granted.

(h) That a receiver, liquidator, or conservator has been appointed for the foreign (other nation) credit union or that any proceeding for an appointment or any similar proceeding has been initiated in the home country of the foreign (other nation) credit union.

(i) That the existence of the foreign (other nation) credit union or the authority of the foreign (other nation) credit union to transact banking business under the laws of the home country of the foreign (other nation) credit union has been suspended or terminated.

(j) That any fact or condition exists that, if it had existed at the time when the foreign (other nation) credit union applied for approval to transact business in this state, would have been grounds for denying the application.

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Section § 16903

This law allows the commissioner to suspend or revoke the license of a foreign credit union operating in California if it's necessary to protect creditors or the public interest. After such an order is issued, the credit union has 30 days to request a hearing. If the hearing does not start within 15 business days of the request, the order is automatically canceled. After the hearing, the commissioner can confirm, change, or cancel the order; if no decision is made within 30 days post-hearing, the order is also canceled. The credit union can still seek judicial review even if it doesn't request a hearing.

(a) If the commissioner finds that any of the factors set forth in Section 16902 is true with respect to any foreign (other nation) credit union that is licensed to maintain an office and that it is necessary for the protection of the interests of creditors of the foreign (other nation) credit union’s business in this state or, in any case, for the protection of the public interest that the commissioner immediately suspend or revoke the license of the foreign (other nation) credit union, the commissioner may issue an order suspending or revoking the license of the foreign (other nation) credit union.

(b)

(1) Within 30 days after an order is issued pursuant to subdivision (a), the foreign (other nation) credit union to which the order is issued may file with the commissioner an application for a hearing on the order. If the commissioner fails to commence the hearing within 15 business days after the application is filed with the commissioner (or within any longer period to which the foreign (other nation) credit union consents), the order shall be deemed rescinded. Within 30 days after the hearing, the commissioner shall affirm, modify, or rescind the order; otherwise, the order shall be deemed rescinded.

(2) The right of any foreign (other nation) credit union to which an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the foreign (other nation) credit union to apply to the commissioner for a hearing on the order pursuant to paragraph (1).

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Section § 16904

If a foreign credit union from another country loses its license to operate an office due to suspension or revocation, it must immediately give up its license to the commissioner.

Any foreign (other nation) credit union whose license to maintain an office is suspended or revoked shall immediately surrender the license to the commissioner.

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Section § 16905

This law explains that a foreign credit union, which has received an order under certain sections, can ask the commissioner to change or cancel the order. However, the commissioner will only agree to this if it's in the public's best interest and if it's likely that the credit union will follow the law in the future. Also, even if the foreign credit union does not request changes from the commissioner, they can still seek a court review of the order.

(a) Any foreign (other nation) credit union to which an order is issued under Section 16902 and 16903 may apply to the commissioner to modify or rescind the order. The commissioner shall not grant the application unless the commissioner finds that it is in the public interest to do so and that it is reasonable to believe that the foreign (other nation) credit union will, if and when it is again authorized to maintain an office, comply with all applicable provisions of this division and of any regulation or order issued under this division.

(b) The right of any foreign (other nation) credit union to which an order is issued under Section 16902 or 16903 to petition for judicial review of the order shall not be affected by the failure of the foreign (other nation) credit union to apply to the commissioner pursuant to subdivision (a) to modify or rescind the order.

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Section § 16906

This law allows the California commissioner to take control of a foreign credit union's assets and business if it's necessary to protect creditors or the public. The credit union can challenge this by applying to a court within 10 days to stop further action if desired. The court will then decide whether to halt the commissioner's actions, and its decision can be appealed.

The commissioner must manage or liquidate the credit union's assets as required by specific sections of the law. Once liquidation is complete, leftover assets should be returned to the credit union unless it also has offices in other states with deficits. In such cases, those assets may be directed to cover shortages elsewhere, distributed equitably as decided by the court.

(a) If the commissioner finds that any of the factors set forth in Section 16902 is true with respect to any foreign (other nation) credit union which is authorized to transact business in this state and that it is necessary for the protection of the interests of the creditors of the business of the foreign (other nation) credit union in this state or for the protection of the public interest that he or she take immediate possession of the property and business of the foreign (other nation) credit union, the commissioner may by order forthwith take possession of the property and business of the foreign (other nation) credit union and retain possession until the foreign (other nation) credit union resumes business in this state or is finally liquidated. The foreign (other nation) credit union may, with the consent of the commissioner, resume business in this state under the conditions as the commissioner may prescribe.

(b)

(1) Whenever the commissioner takes possession of the property and business of a foreign (other nation) credit union pursuant to subdivision (a), the foreign (other nation) credit union may, within 10 days, apply to the superior court in the county in which the primary office in this state of the foreign (other nation) credit union is located to enjoin further proceedings. The court may, after citing the commissioner to show cause why further proceedings should not be enjoined and after a hearing, dismiss the application or enjoin the commissioner from further proceedings and order him or her to surrender the property and business of the foreign (other nation) credit union to the foreign (other nation) credit union or make any further order as may be just.

(2) The judgment of the court may be appealed by the commissioner or by the foreign (other nation) credit union in the manner provided by law for appeals from the judgment of a superior court to the court of appeal. In case the commissioner appeals the judgment of the court, the appeal shall operate as a stay of the judgment, and the commissioner shall not be required to post any bond.

(c) Whenever the commissioner takes possession of the property and business of a foreign (other nation) credit union pursuant to subdivision (a), the commissioner shall conserve or liquidate the property and business of the foreign (other nation) credit union in accordance with Sections 14301 to 14304, inclusive.

(d) When the commissioner has completed the liquidation of the property and business of a foreign (other nation) credit union in this state, the commissioner shall transfer any remaining assets to the foreign (other nation) credit union in accordance with any order the court may issue. However, in case the foreign (other nation) credit union has an office in another state of the United States which is in liquidation and the assets of that office appear to be insufficient to pay in full the creditors of that office, the court shall order the commissioner to transfer to the liquidator of that office the amount of any remaining assets as appears to be necessary to cover the insufficiency. If there are two or more offices and the amount of remaining assets is less than the aggregate amount of insufficiencies with respect to those offices, the court shall order the commissioner to distribute the remaining assets among the liquidators of the offices in the manner as the court determines is equitable.

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