Article 1. General Provisions of California Financial Code >> Division 1. >> Chapter 6. >> Article 1.
In this article:
(a) "Appropriate licensee business" means the business that a
licensee may conduct in accordance with the charter or license that
the commissioner has issued to that licensee.
(b) "Customer" means a depositor of a bank, a member of a credit
union, or a customer of any other licensee.
(c) "Holding company" shall have the meaning set forth in Section
(d) "Officer of a subject institution" means any director,
officer, official, or employee of the subject institution.
(e) "Person" means a subject institution or a subject person.
(f) "Subject institution" means any of the following:
(2) Subsidiary of a licensee.
(3) Foreign (other state) or foreign (other nation) bank or credit
union that maintains an office in this state, with respect to any
such office other than a national bank or federal credit union.
(4) Any other person lawfully conducting the business of a bank or
credit union in this state other than a national bank or federal
(g) "Subject person," when used with respect to a subject
institution, means any of the following:
(1) Director, officer, employee, or agent of the subject
(2) Member, consultant, joint venture partner, or other person
that participates in the affairs of a subject institution.
(3) Independent contractor, including any attorney, appraiser, or
accountant, who knowingly or recklessly participates in any of the
following acts if the act caused or is likely to cause more than a
minimal financial loss to, or a significant adverse effect on, the
(A) A violation of any applicable law, regulation, or order.
(B) A breach of fiduciary duty.
(C) An unsafe or unsound act.
(h) "Violation" includes any act performed, alone or with other
persons, for or toward causing, bringing about, participating in,
counseling, aiding, or abetting a violation of any applicable
statute, regulation, provision of a written order issued by the
commissioner, or provision of a written agreement made between the
commissioner and a subject institution or subject person.
Any subject person who is entitled to a hearing pursuant to
this article may waive that right at any time. A waiver under this
section shall relieve the commissioner from having to issue a formal
notice of hearing that would otherwise be required by this article.
(a) Within 30 days after an order is issued pursuant to
Section 567, 581, 582, 586, or 591, or subdivision (c) of Section
587, the person to whom the order is issued may file with the
commissioner an application for a hearing on the order.
(b) 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 person subject to the order
consents, the order shall be deemed rescinded.
(c) Within 30 days after the hearing, or within any longer period
to which the person consents, the commissioner shall affirm, modify,
or rescind the order. If the commissioner fails to affirm, modify, or
rescind the order within that time limit, the order shall be deemed
(d) The right to petition for judicial review of the order shall
not be affected by the failure of the person subject to the order to
apply to the commissioner for a hearing on the order pursuant to
In addition to any other action or requirement the
commissioner deems necessary or advisable, an order issued pursuant
to Section 580, 581, 582, 585, 586, or 587 may require the person
subject to the order to do any of the following:
(a) Make restitution or provide reimbursement, indemnification, or
guarantee against loss, if the subject institution, subject person,
or holding company was unjustly enriched by the action or violation
or if the action or violation involved a reckless disregard for any
provision of this division, of any regulation or order issued under
this division, of any other applicable law, or of any agreement with
(b) Restrict the growth of the subject institution.
(c) Dispose of any loan or other asset.
(d) Correct violations of law.
(e) Employ qualified officers or employees, who may be subject to
approval of the commissioner.
(f) Limit the activities or functions of the subject institution,
subject person, or holding company.
If the commissioner takes possession of a subject institution
without a prior notice or hearing, or takes action against a subject
person without prior notice or hearing, the commissioner shall, upon
taking possession or taking that action, concurrently provide to the
subject institution or subject person a written order. The order
shall set forth the condition or conditions of the subject
institution or action or actions of the subject person that
constitute the basis or bases for the commissioner's action. In any
case where the commissioner takes possession of a subject
institution, the commissioner shall establish, by clear evidence, the
basis for his or her action.