This law states that in California, only corporations that have been properly organized and licensed by the commissioner can legally act as escrow agents in business transactions. Individuals or unlicensed entities cannot perform this role.

This law requires escrow agent corporations to have experienced staff at each office. At the main office, at least one person must have five years of responsible escrow experience, and at branch offices, someone with at least four years of experience is required. Education can replace one year of this experience.

For Internet escrow agents dealing with personal property, the requirement for in-person experience does not apply. Instead, these agents must have someone knowledgeable about escrow laws and accounting at each location during business hours. Internet escrow agents also need to inform the commissioner of their daily business hours related to accounting and escrow operations.

This law outlines the process for applying for an escrow agent license in written form, verified by the applicant's oath. Importantly, the commissioner is allowed to set rules for accepting electronic records and signatures, although they are not obligated to do so. Electronic records can include applications, financial statements, notifications, and related correspondence. An electronic signature is defined as any electronic symbol or sound linked to a record, showing intent to sign. The law also acknowledges that the Department of Financial Protection and Innovation has been using electronic filing methods and aims to continue expanding their use as resources permit.

If you're applying to be an escrow agent, you need to deposit a $25,000 bond with the commissioner. After getting your license, you must maintain the bond and its amount depends on the previous year's average trust fund obligations. If 150% of last year's obligations are $250,000 or less, the bond stays at $25,000. If obligations range from $250,001 to $500,000, the bond increases to $35,000. If obligations are over $500,000, the bond is $50,000. This bond helps protect the state and anyone with a valid claim against the bondholder. Instead of a bond, an irrevocable letter of credit can be used. Escrow agents licensed before January 1, 1986, had to meet this requirement by July 1, 1986.

If you're applying for or already have an escrow agent's license, you can choose to provide a cash bond instead of a traditional bond. This cash bond has to be the same amount as the one required by law and must be deposited with the commissioner. The money can be held in a bank account or in certain investment certificates that are insured and approved in California. The commissioner maintains control over these funds until they decide to release them, and while these funds are being held, they aren't considered an asset of the applicant or licensee.

This law requires escrow agents to have a bond, which is a type of insurance promising they will follow all rules and regulations and handle funds responsibly. The bond ensures they will pay any money they owe to the state or individuals, including costs related to conservatorship or liquidation. If there's a financial shortfall, trust funds aren't considered an asset for covering liquidation costs. The bond's insurance company can relieve itself of further duty by paying its maximum liability either to the commissioner or a conservator, thus freeing itself from additional financial obligations.

This section mandates that all key personnel of an escrow agent, such as officers, directors, trustees, and employees, must provide a bond before handling the agent's funds or securities. The bond serves to protect the escrow agent from financial losses due to employee actions. The commissioner sets rules regarding bond requirements, including its total amount and approval of its sureties. These bonds must be filed with the commissioner's office, with liability limited to the bond’s value. Additionally, the commissioner can demand more coverage if needed.

If someone wants to sue based on an escrow agent's bond, they need to do it within two years of the problem occurring. After two years, they can't bring a lawsuit.

This law states that if an escrow agent's bond is sued, the commissioner can demand a new bond. If any money is recovered from the original bond, the licensee must get a new bond immediately. Not filing a new bond within 10 days after recovering from the original bond or after the commissioner requests one can lead to losing your license.

This law outlines the fees and assessments that the California commissioner can charge regarding escrow agents. When applying for an escrow agent's license, there is a fee of $625 for the first office and $425 for additional locations. If an agent needs a replacement license, it costs $2. Investigating an application costs $100 per office. Should there be a hearing, the agent must pay the actual costs.

Escrow agents also pay an annual license fee, which can be up to $7,215 per office, with notifications sent by May 30 each year. Late payments incur a penalty, and if unpaid by June 30, the agent risks their license being suspended or revoked. There's also a $50 fee for certain investigations and up to $25 for specific filings.

In cases where enforcement costs exceed the budget, a special assessment of up to $1,000 per office may be levied. Late payment of the special assessment can lead to penalties similar to those for late license fee payments.

Any money the commissioner collects must be deposited into the State Treasury and credited to the State Corporations Fund. This money is specifically used for managing and enforcing the rules of this division.

To get a license as an escrow agent, you need to fill out an application signed by an officer, include key documents like your articles of incorporation and bylaws, and provide detailed information. You must list the names and addresses of your team, forecast the first year's financials, show an audited financial statement, and identify key qualified individuals. You also need to state what type of escrow business you will run and answer any other questions the commissioner may have.

An identity verification process is required for stockholders and significant participants, which includes submitting fingerprints. These fingerprints are checked by the Department of Justice and FBI for any criminal records. If someone’s background doesn’t meet legal standards, you need to fix this within six months or face rejection of your application. However, regular employees who are filed under certain sections may be exempt from this identity check. There's a fee to cover the processing of fingerprint checks.

Once a complete application for a license and the necessary fees are received, the commissioner must quickly check and investigate all the details about the proposal. This includes looking into the backgrounds of stockholders, directors, officers, managers, where the business will be located, and its expected income and expenses.

This section allows the commissioner to decide whether an applicant needs to attend a hearing. If there is a hearing, the commissioner must mail a notice to the applicant at least 10 days in advance. During the hearing, anyone interested can express support for or against the application.

This law allows the commissioner to refuse a license application for several reasons related to escrow services. A license can be denied if the business isn't meant for legitimate escrow services, or if the requested business name conflicts with existing ones. Licenses are also denied if a key person in the business has recent criminal convictions or dishonest behavior, doesn't have enough experience, or if the financial plan is weak. Making false statements in the application or not meeting certain regulatory requirements can also lead to refusal. Finally, failure to comply with specific membership rules is a ground for denial as well.

This law requires that a license clearly indicate if the license holder is an escrow agent or a joint control agent. It's about ensuring transparency about what specific role the licensee is authorized to perform.

If you're an escrow agent licensed on or after January 1, 1986, you need a net worth of $50,000, with at least $25,000 in easily accessible assets above debts. If you were licensed before that date, you had a schedule to gradually increase your net worth from $10,000 in 1986 to $50,000 by 1993, also requiring liquid assets above liabilities.

The Commissioner can decide what counts as liquid assets, both generally and in specific cases. If you have branch offices, you need extra net worth: 50% of what you need for the main office for the first branch, and 25% more for each additional branch.

This law requires that the license must be visibly displayed in all the locations where the business operates.

This law states that escrow agents are not allowed to share or promote any false, misleading, or incomplete information about their services. It also forbids them from implying they are supervised by the State of California unless specifically permitted. If they refer to their licensure, they must include a specific statement confirming their license with the California Department of Financial Protection and Innovation.

The law gives the commissioner the power to stop anyone from doing things that break these rules.

If you run an escrow business, you must tell the state commissioner about any new or changing important people, like directors or managers, in your company. This includes sending their identity details, a filled questionnaire, and fingerprints for a criminal background check by mail. If someone has already provided their fingerprints, they don't need to do it again, unless asked. If the background check shows a violation of specific rules, you must prevent that person from working with escrow funds or processing transactions. These rules come in addition to other existing regulations. The commissioner can also ask for more details whenever desired.

This law states that an escrow agent must operate under the name listed in their incorporation documents.

Additionally, an escrow agent's license cannot be transferred or reassigned without the commissioner's approval. This includes any indirect transfer methods like stock purchases or foreclosures. If an escrow agent plans to transfer 10% or more of its shares, they need to apply for a new license unless the transfer is between existing shareholders who each already own at least 10% of the shares.

If an escrow agent wants to move their business to a new location, they must notify and get approval from the commissioner at least 30 days before the move. The commissioner might waive this requirement if the move is due to unforeseen events like fire or emergencies. The commissioner will respond to the request within 30 days.

If the business moves more than five miles and there's a change in ownership involving 50% or more of the corporation shares, the agent must apply for a new license. This involves treating the move as if it's a new license application, with related fees, unless the ownership changes involve close family members.

If an escrow agent in California opens a new branch or changes its business location without getting approval from the commissioner first, they have to pay a fine. The fine is up to $100 each day for the first 10 days, then $10 for each day after, as long as they operate without permission.

This law allows licensed financial service entities to open more office locations if they meet certain conditions. These include notifying the commissioner of the new addresses, paying required fees, and submitting financial statements and bond amounts. Each new location requires an additional bond of $5,000. The financial information must be up-to-date, and the licensee must ensure complete control over new branch operations. The names and addresses of owners and employees involved must also be filed. Applications are reviewed quickly, with licenses granted within 30 days unless requirements aren't met or a further hearing is necessary.

This law establishes an 11-member Escrow Law Advisory Committee within the Department of Financial Protection and Innovation. The committee includes the commissioner or a designee, chairs and past chairs from escrow organizations, and various representatives chosen by the commissioner, including small and medium business representatives, an experienced attorney, and a CPA familiar with escrow matters.

Most members serve two-year terms, and the committee meets quarterly, led by the commissioner. Members serve without pay or expenses covered. If certain board positions overlap or can't serve, alternates are chosen in consultation with organization boards.

The committee’s main role is to help the commissioner execute their duties related to escrow law.

This law says that when the commissioner gives out a license or order related to financial regulations, they can set conditions to make sure the rules are followed properly. For Internet escrow agents, these conditions should also align with what the Legislature intends.