Section 6653.5 Of Article 2. Savings Accounts From California Financial Code >> Division 2. >> Chapter 5. >> Article 2.
6653.5
. (a) A troubled savings association may not accept funds
obtained, directly or indirectly, by or through any deposit broker
for deposit into one or more accounts.
(b) Any renewal of a savings account in any troubled savings
association and any rollover of any amount on deposit in such a
savings account shall be treated as an acceptance of funds by the
troubled savings association for purposes of subdivision (a).
(c) The commissioner may, on a case-by-case basis and upon
application by a savings association, waive the applicability of
subdivision (a) upon a finding that the acceptance of these deposits
does not constitute an unsafe or unsound practice with respect to
that savings association.
(d) The commissioner may impose, by regulation or order, such
additional restrictions on the acceptance of broker deposits by any
troubled savings association as the commissioner may determine to be
appropriate.
(e) For purposes of this section:
(1) "Deposit broker," except as otherwise provided in paragraph
(2), means either of the following:
(A) Any person engaged in (i) the business of placing deposits, or
facilitating the placement of deposits, of third parties with
financial institutions or (ii) the business of placing deposits with
financial institutions for the purpose of selling interests in those
deposits to third parties.
(B) An agent or trustee who establishes a savings account to
facilitate a business arrangement with a financial institution to use
the proceeds of the account to fund a prearranged loan.
(2) Subject to paragraph (3), "deposit broker" does not include
any of the following:
(A) A savings association with respect to funds placed with that
savings association.
(B) An employee of a savings association with respect to funds
placed with the employing savings association.
(C) A trust department of a savings association, if the trust in
question has not been established for the primary purpose of placing
funds with financial institutions.
(D) The trustee of a pension or other employee benefit plan, with
respect to funds of the plan.
(E) A person acting as a plan administrator or an investment
adviser in connection with a pension plan or other employee benefit
plan, provided that that person is performing managerial functions
with respect to the plan.
(F) The trustee of a testamentary account.
(G) The trustee of an irrevocable trust (other than one described
in subparagraph (B) of paragraph (1), as long as the trust in
question has not been established for the primary purpose of placing
funds with financial institutions.
(H) A trustee or custodian of a pension or profitsharing plan
qualified under Section 401(d) or 403(a) of the federal Internal
Revenue Code of 1986.
(I) An agent or nominee whose primary purpose is not the placement
of funds with financial institutions.
(3) The exceptions specified in paragraph (2) do not apply to, and
the term "deposit broker" includes, any savings association, and any
employee of any savings association, that engages, directly or
indirectly, in the solicitation of deposits by offering rates of
interest (with respect to those deposits) which are significantly
higher than the prevailing rates of interest on deposits offered by
other associations and federal associations in the savings
association's normal market area.
(4) "Employee" means any person meeting all of the following
criteria:
(A) The person is employed exclusively by the savings association.
(B) The person's compensation is primarily in the form of a
salary.
(C) The person does not share that compensation with a deposit
broker.
(D) The person's office space or place of business is used
exclusively for the benefit of the savings association which employs
the person.
(5) "Troubled savings association" means any savings association
which does not meet the minimum capital requirements applicable with
respect to that savings association.