Section 1781.10 Of Article 3. Deposit Subscription Period From California Health And Safety Code >> Division 2. >> Chapter 10. >> Article 3.
1781.10
. No deposit or any other asset held in a deposit escrow
account, shall be encumbered or used as collateral for any obligation
of the applicant or any other person, unless the applicant obtains
prior written approval from the department for the encumbrance or use
as collateral. The department shall not approve any encumbrance or
use as collateral under this section unless the encumbrance or use as
collateral is expressly subordinated to the rights of depositors
under this chapter to refunds of their deposits.