LEGISLATIVE COUNSEL'S DIGEST


SB 204, as amended, Benoit. Financial transactions:
regulation. escrow agents.
Existing law provides for the licensing and regulation of escrow
agents by the Commissioner of Corporations. Existing law, until
January 1, 2010, requires each escrow agent to pay an annual license
fee of up to $2,800 for each office or location and authorizes the
commissioner to additionally levy a special assessment of up to $500,
which is required to be paid by the escrow agent within 30 days of
receipt of notification by the commissioner, for each office or
location in certain circumstances. Commencing January 1, 2010,
existing law instead requires each escrow agent to pay to the
commissioner the agent's pro rata share of the commissioner's annual
administrative costs and expenses, as specified.
This bill would repeal the provisions that would require an escrow
agent, commencing January 1, 2010, to pay to the commissioner the
agent's pro rata share of the commissioner's annual administrative
costs and expenses. The bill would, instead, continue the requirement
for an escrow agent to pay an annual license fee of up to $2,800 for
each office or location. The bill would authorize the special
assessment that may be levied by the commissioner to be in an amount
of up to $1,000 for each office or location. The bill would require
an escrow agent to pay the special assessment within 60 days of
notification by the commissioner.
Existing law authorizes the commissioner to conduct examinations,
as specified, of a new licensee within one year and within 2 years of
the issuance of a license.
This bill would require the commissioner to conduct the
examinations, as specified, of new licensees or upon change of
ownership.
Existing law provides that the license of an escrow agent remains
in effect until surrendered, revoked, or suspended. Existing law sets
forth the procedure for the surrender of the license of an escrow
agent, and requires a surrendering licensee to, among other things,
tender his or her license and all other indicia of licensure to the
commissioner, and submit a closing audit to the commissioner, as
specified. Existing law provides that a license is not surrendered
until the commissioner has reviewed and accepted the closing audit,
made a determination that there is no violation of law, and, in
writing, accepted tender of the license.
This bill would delete the requirement that the commissioner make
a determination that there is no violation of law and instead require
a determination that acceptance of the surrender is in the public
interest.
Existing law, the California Residential Mortgage Lending Act,
provides for the licensure and regulation of residential mortgage
lenders and servicers by the Commissioner of Corporations. Existing
law provides that the license of a residential mortgage lender or
servicer remains in effect until surrendered, revoked, or suspended.
Existing law sets forth the procedure for the surrender of the
license of a residential mortgage lender or servicer, and requires a
surrendering licensee to, among other things, notify the commissioner
in writing of surrender, tender his or her license and all other
indicia of licensure to the commissioner, and file a plan for the
withdrawal from regulated business that includes a timetable for the
disposition of business and a closing audit, review, or, if agreed
upon, a procedure performed by an independent certified public
accountant as prescribed by rule or order of the commissioner.
Existing law provides that a license is not surrendered until the
commissioner has, in writing, accepted tender after review, made a
finding on the withdrawal plan, and made a determination that there
is no violation of law.
This bill would delete the provision that allows the licensee's
withdrawal plan to include an agreed-upon procedure performed by an
independent certified public accountant, and instead provide that the
withdrawal plan include any other document prescribed by rule or
order of the commissioner, including a document that demonstrates
that all custodial fund accounts have been properly transferred and
closed. The bill would also delete the requirement that the
commissioner make a determination that there is no violation of law,
and instead require a determination that acceptance of the surrender
is in the public interest.
Existing law, the California Residential Mortgage Lending Act,
requires an application for licensure to be accompanied by an exhibit
containing statements that the applicant agrees to take specified
actions, including, but not limited to, agreeing to notify the
commissioner, in writing, by certified mail, return receipt
requested, prior to opening a branch office in this state or changing
the business location or locations of the applicant, as specified.

This bill would require the application for licensure to include a
statement that the applicant agrees to notify the commissioner prior
to the closing of a business location.