Chapter 2. Exemptions of California Financial Code >> Division 1.2. >> Chapter 2.
This division does not apply to the following:
(a) The United States or a department, agency, or instrumentality
thereof, including any federal reserve bank and any federal home loan
(b) Money transmission by the United States Postal Service or by a
contractor on behalf of the United States Postal Service.
(c) A state, county, city, or any other governmental agency or
governmental subdivision of a state.
(d) A commercial bank or industrial bank, the deposits of which
are insured by the Federal Deposit Insurance Corporation or its
successor, or any foreign (other nation) bank that is licensed under
Chapter 20 (commencing with Section 1750) or that is authorized under
federal law to maintain a federal agency or federal branch office in
this state; a trust company licensed pursuant to Section 1042 or a
national association authorized under federal law to engage in a
trust banking business; an association or federal association, as
defined in Section 5102, the deposits of which are insured by the
Federal Deposit Insurance Corporation or its successor; and any
federally or state chartered credit union, with an office in
California, the member accounts of which are insured or guaranteed as
provided in Section 14858.
(e) Electronic funds transfer of governmental benefits for a
federal, state, county, or local governmental agency by a contractor
on behalf of the United States or a department, agency, or
instrumentality thereof, or a state or governmental subdivision,
agency, or instrumentality thereof.
(f) A board of trade designated as a contract market under the
federal Commodity Exchange Act (7 U.S.C. Sec. 1 et seq.) or a person
that, in the ordinary course of business, provides clearance and
settlement services for a board of trade to the extent of its
operation as or for such a board.
(g) A person that provides clearance or settlement services
pursuant to a registration as a clearing agency or an exemption from
registration granted under the federal securities laws to the extent
of its operation as such a provider.
(h) An operator of a payment system to the extent that it provides
processing, clearing, or settlement services, between or among
persons excluded by this section, in connection with wire transfers,
credit card transactions, debit card transactions, stored value
transactions, automated clearing house transfers, or similar funds
transfers, to the extent of its operation as such a provider.
(i) A person registered as a securities broker-dealer under
federal or state securities laws to the extent of its operation as
such a broker-dealer.
(j) A person that delivers wages or salaries on behalf of
employers to employees or facilitates the payment of payroll taxes to
state and federal agencies, makes payments relating to employee
benefit plans, makes distribution of other authorized deductions from
employees' wages or salaries, or transmits other funds on behalf of
an employer in connection with transactions related to employees.
Notwithstanding this subdivision, a person described herein that
offers money transmission services or provides stored value cards
directly to individual customers shall comply with this division to
the extent of that activity.
(k) A person listed under subdivision (d) is exempted from all the
provisions of this division, except Sections 2062 and 2063.
(l) A transaction in which the recipient of the money or other
monetary value is an agent of the payee pursuant to a preexisting
written contract and delivery of the money or other monetary value to
the agent satisfies the payor's obligation to the payee.
(1) For purposes of this subdivision, "agent" has the same meaning
as that term is defined in Section 2295 of the Civil Code.
(2) For purposes of this subdivision, "payee" means the provider
of goods or services, who is owed payment of money or other monetary
value from the payor for the goods or services.
(3) For purposes of this subdivision, "payor" means the recipient
of goods or services, who owes payment of money or monetary value to
the payee for the goods or services.
(a) The commissioner may, by regulation or order, either
unconditionally or upon specified terms and conditions or for
specified periods, exempt from all or part of this division any
person or transaction or class of persons or transactions, if the
commissioner finds such action to be in the public interest and that
the regulation of such persons or transactions is not necessary for
the purposes of this division. The commissioner shall post on the
commissioner's Internet Web site a list of all persons, transactions,
or classes of person or transactions exempt pursuant to this
section, and the part or parts of this division from which they are
(b) The commissioner shall adopt regulations to carry out and
implement this section.