Jurris.COM
Chapter 2. License And Bond of California Financial Code >> Division 6. >> Chapter 2.
It shall be unlawful for any person to engage in business as
an escrow agent within this state except by means of a corporation
duly organized for that purpose licensed by the commissioner as an
escrow agent.
(a) Within the organization of each escrow agent
corporation, either as an owner, officer, or employee, there shall be
one or more persons possessing a minimum of five years of
responsible escrow or joint control experience to be stationed at the
main office of the corporation and one or more persons possessing a
minimum of four years of responsible escrow or joint control
experience stationed at each branch. At least one such qualified
person shall be stationed on duty at each business location licensed
by this division during the time the location is open for business. A
person who has satisfied educational requirements established by the
commissioner may substitute education for up to one year of
experience.
(b) Subdivision (a) does not apply to an Internet escrow agent with respect to escrows involving personal property. However, within the organization of each Internet escrow agent corporation engaged in the business of an escrow involving personal property, either as an owner, officer, or employee, one or more qualified persons shall possess knowledge and understanding of the Escrow Law (as set forth in Division 6 (commencing with Section 17000)), the rules promulgated thereunder, and accounting so that, among other things, appropriate books and records are used and maintained in order to account for escrows involving personal property. At least one qualified person shall be on duty at each business location of an Internet escrow agent licensed by this division when operations are being conducted that require knowledge of accounting and the Escrow Law and regulations. An Internet escrow agent shall notify the commissioner of the daily business hours during which those operations are to be conducted.
(b) Subdivision (a) does not apply to an Internet escrow agent with respect to escrows involving personal property. However, within the organization of each Internet escrow agent corporation engaged in the business of an escrow involving personal property, either as an owner, officer, or employee, one or more qualified persons shall possess knowledge and understanding of the Escrow Law (as set forth in Division 6 (commencing with Section 17000)), the rules promulgated thereunder, and accounting so that, among other things, appropriate books and records are used and maintained in order to account for escrows involving personal property. At least one qualified person shall be on duty at each business location of an Internet escrow agent licensed by this division when operations are being conducted that require knowledge of accounting and the Escrow Law and regulations. An Internet escrow agent shall notify the commissioner of the daily business hours during which those operations are to be conducted.
(a) An application for a license as an escrow agent shall be
in writing and in such form as is prescribed by the commissioner.
The application shall be verified by the oath of the applicant.
(b) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section does not require the commissioner to accept electronic records or electronic signatures.
(c) For purposes of this section, the following terms have the following meanings:
(1) "Electronic record" means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. "Electronic records" also includes, but is not limited to, all of the following:
(A) An application, amendment, supplement, and exhibit, filed for any order, license, consent, or other authority.
(B) A financial statement, report, or advertising.
(C) An order, license, consent, or other authority.
(D) A notice of public hearing, accusation, and statement of issues in connection with any application, registration, order, license, consent, or other authority.
(E) A proposed decision of a hearing officer and a decision of the commissioner.
(F) The transcripts of a hearing and correspondence between a party and the commissioner directly relating to the record.
(G) A release, newsletter, interpretive opinion, determination, or specific ruling.
(H) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (G), inclusive.
(2) "Electronic signature" means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.
(d) The Legislature finds and declares that the Department of Business Oversight has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal.
(b) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section does not require the commissioner to accept electronic records or electronic signatures.
(c) For purposes of this section, the following terms have the following meanings:
(1) "Electronic record" means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. "Electronic records" also includes, but is not limited to, all of the following:
(A) An application, amendment, supplement, and exhibit, filed for any order, license, consent, or other authority.
(B) A financial statement, report, or advertising.
(C) An order, license, consent, or other authority.
(D) A notice of public hearing, accusation, and statement of issues in connection with any application, registration, order, license, consent, or other authority.
(E) A proposed decision of a hearing officer and a decision of the commissioner.
(F) The transcripts of a hearing and correspondence between a party and the commissioner directly relating to the record.
(G) A release, newsletter, interpretive opinion, determination, or specific ruling.
(H) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (G), inclusive.
(2) "Electronic signature" means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.
(d) The Legislature finds and declares that the Department of Business Oversight has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal.
(a) At the time of filing an application for an escrow agent'
s license, the applicant shall deposit with the commissioner a bond
satisfactory to the commissioner in the amount of at least
twenty-five thousand dollars ($25,000). Thereafter, a licensee shall
maintain a bond satisfactory to the commissioner in the amount of:
(1) twenty-five thousand dollars ($25,000) if 150 percent of the
previous year's average annual trust fund obligations, as calculated
under Section 17348, equals two hundred fifty thousand dollars
($250,000) or less; (2) thirty-five thousand dollars ($35,000) if 150
percent of the previous year's average annual trust fund
obligations, as calculated under Section 17348, equals at least two
hundred fifty thousand one dollars ($250,001) but not more than five
hundred thousand dollars ($500,000); or (3) fifty thousand dollars
($50,000) if 150 percent of the previous year's average annual trust
fund obligations, as calculated under Section 17348, equals five
hundred thousand one dollars ($500,001) or more. The bond shall run
to the state for the use of the state and for any person who has
cause against the obligor of the bond under the provision of this
division. A deposit given instead of the bond required by this
section shall not be deemed an asset of the applicant or licensee for
the purpose of complying with Section 17210. An applicant or
licensee may obtain an irrevocable letter of credit approved by the
commissioner in lieu of the bond.
(b) Escrow agents licensed prior to January 1, 1986, shall comply with the requirements of subdivision (a) on or before July 1, 1986.
(b) Escrow agents licensed prior to January 1, 1986, shall comply with the requirements of subdivision (a) on or before July 1, 1986.
An applicant for an escrow agent's license or a licensee
may, in lieu of and subject to the same conditions as the bond
required by Section 17202, deposit with the commissioner a cash bond
in the sum specified in Section 17202. Evidence of the cash bond
shall be a deposit in the amount specified in Section 17202 in a bank
or investment certificates of industrial loan companies, authorized
to do business in this state and insured by the Federal Deposit
Insurance Corporation, or an investment certificate or share account
in the amount specified in Section 17202 issued by a savings and loan
association doing business in this state and insured by the Federal
Savings and Loan Insurance Corporation. Those deposits, certificates,
or accounts shall be assigned to and accepted and maintained by the
commissioner, upon those terms as the commissioner may prescribe,
until released by the commissioner, and shall not be deemed an asset
of the applicant or licensee for the purpose of complying with
Section 17210.
The bond of an escrow agent shall be conditioned that the
licensee will faithfully conform to and abide by the provisions of
this division and all the rules made by the commissioner under this
division. The bond shall be conditioned that the licensee will
honestly and faithfully apply all funds received, will faithfully and
honestly perform all obligations and undertakings under this
division, and will pay to the state and any person all amounts which
become due or owing to the state or to such person under the
provisions of this division, including the costs in any
conservatorship, or liquidation, whether by the commissioner or by a
receiver. In determining the liability of the principal and the
sureties under the bond, escrow money held in trust and any money
recovered to restore any deficiency in the trust shall not be
considered as an asset of the liquidation subject to assessment for
the cost of the liquidation. The surety under the bond may pay the
full amount of its liability thereunder to the commissioner or a
conservator appointed by the commissioner pursuant to Chapter 6
(commencing with Section 17621) in lieu of payment to the state or
persons having a cause of action against the principal, and upon such
payment the surety is completely released from further liability
under the bond.
(a) All officers, directors, trustees, and employees of an
escrow agent, whether or not compensated, who have access to money
or negotiable securities belonging to the escrow agent or in the
possession of the escrow agent in the regular discharge of their
duties, or persons who draw checks upon the escrow agent or upon the
trust funds of the escrow agent in the regular discharge of their
duties, before entering upon their duties and throughout the entire
term of their office and employment and any subsequent term thereof,
shall furnish to the escrow agent a bond indemnifying the escrow
agent against loss of money or property. No officer, director,
trustee, or employee shall enter upon their duties or have access to
money or negotiable securities or draw checks upon the escrow agent
or the trust funds of an escrow agent prior to complying with such
rules as the commissioner shall adopt with respect to the
qualifications of these officers, directors, trustees, or employees
to assume their duties.
The commissioner shall prescribe the aggregate amount of the bond
and the terms during which the bond runs. The sufficiency of the
sureties on the bond are at all times subject to the approval of the
commissioner. The bond shall be filed in the commissioner's office.
The aggregate liability of the surety for all claims shall in no
event exceed the penal sum of the bond.
(b) The commissioner may at any time require an additional bond or surety to be filed when in the commissioner's opinion any bond then in force is insufficient for any reason.
(b) The commissioner may at any time require an additional bond or surety to be filed when in the commissioner's opinion any bond then in force is insufficient for any reason.
No action may be brought on an escrow agent's bond by any
person after the expiration of two years from the time when the act
or default complained of occurs.
When an action is commenced on an escrow agent's bond the
commissioner may require the filing of a new bond, and immediately
upon the recovery of any action on the bond, the licensee shall file
a new bond. Failure to file a new bond within 10 days of the recovery
on a bond, or within 10 days after notification of the commissioner
that a new bond is required constitutes sufficient grounds for the
suspension or revocation of the license.
The commissioner shall charge and collect the following fees
and assessments:
(a) For filing an application for an escrow agent's license, six hundred twenty-five dollars ($625) for the first office or location and four hundred twenty-five dollars ($425) for each additional office or location.
(b) For filing an application for a duplicate of an escrow agent's license lost, stolen, or destroyed, or for replacement, upon a satisfactory showing of the loss, theft, destruction, or surrender of certificate for replacement, two dollars ($2).
(c) For investigation services in connection with each application, one hundred dollars ($100), and for investigation services in connection with each additional office application, one hundred dollars ($100).
(d) For holding a hearing in connection with the application, as set forth under Section 17209.2, the actual costs experienced in each particular instance.
(e) (1) Each escrow agent shall pay to the commissioner for the support of this division for the ensuing year an annual license fee not to exceed two thousand eight hundred dollars ($2,800) for each office or location.
(2) On or before May 30 in each year, the commissioner shall notify each escrow agent by mail of the amount of the annual license fee levied against it, and that the payment of the invoice is payable by the escrow agent within 30 days after receipt of notification by the commissioner.
(3) If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the annual license fee, of 10 percent of the fee for each month or part of a month that the payment is delayed or withheld.
(4) If an escrow agent fails to pay the amount due on or before the June 30 following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company.
(5) If, after an order is made pursuant to paragraph (4), a request for a hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a company shall not conduct business pursuant to this division, except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(f) Fifty dollars ($50) for investigation services in connection with each application for qualification of any person under Section 17200.8, other than investigation services under subdivision (c) of this section.
(g) A fee not to exceed twenty-five dollars ($25) for the filing of a notice or report required by rules adopted pursuant to subdivision (a) or Section 17203.1.
(h) (1) If costs and expenses associated with the enforcement of this division, including overhead, are or will be incurred by the commissioner during the year for which the annual license fee is levied, and that will or could result in the commissioner's incurring of costs and expenses, including overhead, in excess of the costs and expenses, including overhead, budgeted for expenditure for the year in which the annual license fee is levied, then the commissioner may levy a special assessment on each escrow agent for each office or location in an amount estimated to pay for the actual costs and expenses associated with the enforcement of this division, including overhead, in an amount not to exceed one thousand dollars ($1,000) for each office or location. The commissioner shall notify each escrow agent by mail of the amount of the special assessment levied against it, and that payment of the special assessment is payable by the escrow agent within 60 days of receipt of notification by the commissioner. The funds received from the special assessment shall be deposited into the State Corporations Fund and shall be used only for the purposes for which the special assessment is made.
(2) If payment is not made within 60 days, the commissioner may assess and collect a penalty, in addition to the special assessment, of 10 percent of the special assessment for each month or part of a month that the payment is delayed or withheld. If an escrow agent fails to pay the special assessment on or before 60 days following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company. If an order is made under this subdivision, the provisions of paragraph (5) of subdivision (e) shall apply.
(3) If the amount collected pursuant to this subdivision exceeds the actual costs and expenses, including overhead, incurred in the administration and enforcement of this division and any deficit incurred, the excess shall be credited to each escrow agent on a pro rata basis.
(a) For filing an application for an escrow agent's license, six hundred twenty-five dollars ($625) for the first office or location and four hundred twenty-five dollars ($425) for each additional office or location.
(b) For filing an application for a duplicate of an escrow agent's license lost, stolen, or destroyed, or for replacement, upon a satisfactory showing of the loss, theft, destruction, or surrender of certificate for replacement, two dollars ($2).
(c) For investigation services in connection with each application, one hundred dollars ($100), and for investigation services in connection with each additional office application, one hundred dollars ($100).
(d) For holding a hearing in connection with the application, as set forth under Section 17209.2, the actual costs experienced in each particular instance.
(e) (1) Each escrow agent shall pay to the commissioner for the support of this division for the ensuing year an annual license fee not to exceed two thousand eight hundred dollars ($2,800) for each office or location.
(2) On or before May 30 in each year, the commissioner shall notify each escrow agent by mail of the amount of the annual license fee levied against it, and that the payment of the invoice is payable by the escrow agent within 30 days after receipt of notification by the commissioner.
(3) If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the annual license fee, of 10 percent of the fee for each month or part of a month that the payment is delayed or withheld.
(4) If an escrow agent fails to pay the amount due on or before the June 30 following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company.
(5) If, after an order is made pursuant to paragraph (4), a request for a hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a company shall not conduct business pursuant to this division, except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(f) Fifty dollars ($50) for investigation services in connection with each application for qualification of any person under Section 17200.8, other than investigation services under subdivision (c) of this section.
(g) A fee not to exceed twenty-five dollars ($25) for the filing of a notice or report required by rules adopted pursuant to subdivision (a) or Section 17203.1.
(h) (1) If costs and expenses associated with the enforcement of this division, including overhead, are or will be incurred by the commissioner during the year for which the annual license fee is levied, and that will or could result in the commissioner's incurring of costs and expenses, including overhead, in excess of the costs and expenses, including overhead, budgeted for expenditure for the year in which the annual license fee is levied, then the commissioner may levy a special assessment on each escrow agent for each office or location in an amount estimated to pay for the actual costs and expenses associated with the enforcement of this division, including overhead, in an amount not to exceed one thousand dollars ($1,000) for each office or location. The commissioner shall notify each escrow agent by mail of the amount of the special assessment levied against it, and that payment of the special assessment is payable by the escrow agent within 60 days of receipt of notification by the commissioner. The funds received from the special assessment shall be deposited into the State Corporations Fund and shall be used only for the purposes for which the special assessment is made.
(2) If payment is not made within 60 days, the commissioner may assess and collect a penalty, in addition to the special assessment, of 10 percent of the special assessment for each month or part of a month that the payment is delayed or withheld. If an escrow agent fails to pay the special assessment on or before 60 days following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company. If an order is made under this subdivision, the provisions of paragraph (5) of subdivision (e) shall apply.
(3) If the amount collected pursuant to this subdivision exceeds the actual costs and expenses, including overhead, incurred in the administration and enforcement of this division and any deficit incurred, the excess shall be credited to each escrow agent on a pro rata basis.
All money received by the commissioner shall be paid by him
or her into the State Treasury to the credit of the State
Corporations Fund for the sole purpose of administering and enforcing
this division.
An application for a license as an escrow agent shall be
signed and verified by an authorized officer of the applicant, and
such application shall be accompanied by a certified copy of the
articles of incorporation and a copy of the bylaws of the proposed
licensee. The application shall set forth:
(a) The names and addresses of the incorporators, directors, and officers.
(b) An itemized statement of the estimated receipts and expenditures of the proposed first year of operations.
(c) An audited financial statement showing compliance with Section 17210.
(d) The name and address of the person, or persons, meeting the requirements of Section 17200.8, and a statement supporting such persons' qualifications.
(e) The type of business for which the license is requested.
(f) Any other matters the commissioner may require.
(g) An application for a license as an escrow agent filed with the commissioner shall also include a completed statement of identity and questionnaire, as prescribed by the commissioner, for all stockholders, directors, officers, trustees, managers, and other persons participating in the escrow business directly or indirectly compensated by the escrow agent (other than usual and customary employees who file pursuant to subdivision (d) of Section 17414.1 and Section 17419) and shall also include fingerprints and related information for those persons pursuant to subdivision (h). The commissioner shall notify the applicant in writing if any of the information received pursuant to this division shows that a person's employment, participation, or ownership interest would be in violation of Section 17414.1, and the escrow agent shall deny the person the employment or interest. If the application is not satisfactorily amended to remove the deficiency within six months of the first notice of deficiency, the application shall be summarily denied. Persons required to file the employment application pursuant to Section 17419 are not required to file the statement of identity and questionnaire described in this section.
(h) (1) The fingerprint images and related information shall be submitted by the commissioner to the Department of Justice, in a manner established by the Department of Justice, for the purposes of obtaining information as to the existence and content of a record of state or federal convictions, state or federal arrests, and information as to the existence of and content of a record of state or federal arrests for which the Department of Justice establishes that the person is free on bail or on his or her own recognizance pending trial or appeal.
(2) Upon receipt, the Department of Justice shall forward to the Federal Bureau of Investigation requests for federal summary criminal history information received from the commissioner pursuant to this section. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the commissioner pursuant to subdivision (p) of Section 11105 of the Penal Code.
(3) The commissioner shall request from the Department of Justice subsequent arrest notification service as provided pursuant to Section 11105.2 of the Penal Code.
(4) The Department of Justice shall charge a fee sufficient to cover the costs of processing the requests pursuant to this subdivision.
(a) The names and addresses of the incorporators, directors, and officers.
(b) An itemized statement of the estimated receipts and expenditures of the proposed first year of operations.
(c) An audited financial statement showing compliance with Section 17210.
(d) The name and address of the person, or persons, meeting the requirements of Section 17200.8, and a statement supporting such persons' qualifications.
(e) The type of business for which the license is requested.
(f) Any other matters the commissioner may require.
(g) An application for a license as an escrow agent filed with the commissioner shall also include a completed statement of identity and questionnaire, as prescribed by the commissioner, for all stockholders, directors, officers, trustees, managers, and other persons participating in the escrow business directly or indirectly compensated by the escrow agent (other than usual and customary employees who file pursuant to subdivision (d) of Section 17414.1 and Section 17419) and shall also include fingerprints and related information for those persons pursuant to subdivision (h). The commissioner shall notify the applicant in writing if any of the information received pursuant to this division shows that a person's employment, participation, or ownership interest would be in violation of Section 17414.1, and the escrow agent shall deny the person the employment or interest. If the application is not satisfactorily amended to remove the deficiency within six months of the first notice of deficiency, the application shall be summarily denied. Persons required to file the employment application pursuant to Section 17419 are not required to file the statement of identity and questionnaire described in this section.
(h) (1) The fingerprint images and related information shall be submitted by the commissioner to the Department of Justice, in a manner established by the Department of Justice, for the purposes of obtaining information as to the existence and content of a record of state or federal convictions, state or federal arrests, and information as to the existence of and content of a record of state or federal arrests for which the Department of Justice establishes that the person is free on bail or on his or her own recognizance pending trial or appeal.
(2) Upon receipt, the Department of Justice shall forward to the Federal Bureau of Investigation requests for federal summary criminal history information received from the commissioner pursuant to this section. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the commissioner pursuant to subdivision (p) of Section 11105 of the Penal Code.
(3) The commissioner shall request from the Department of Justice subsequent arrest notification service as provided pursuant to Section 11105.2 of the Penal Code.
(4) The Department of Justice shall charge a fee sufficient to cover the costs of processing the requests pursuant to this subdivision.
Upon the receipt of a proper and complete application for
license, and all required fees, the commissioner shall immediately
examine and investigate all facts connected with the proposal,
including but not limited to its stockholders, directors, officers
and managers, proposed location, and estimated receipts and
expenditures.
The commissioner may or may not require an applicant to
submit to an appropriate hearing. If a hearing is held the
commissioner shall, on or before 10 days prior to the hearing, mail
notice thereof to the applicant. At such hearing any interested
person may show cause either in favor of, or opposed to, the
application.
The commissioner may refuse to issue any license being
applied for, and shall refuse to issue any license being applied for
if upon the commissioner's examination and investigation, and after
appropriate hearing, the commissioner finds any of the following:
(a) That the corporation is to be formed for any business other than legitimate escrow agent services, or proposes to use a name that is misleading or in conflict with the name of an existing licensee.
(b) That any incorporator, officer, or director of the applicant has, within the last 10 years, been (1) convicted of or pleaded nolo contendere to a crime, or (2) committed any act involving dishonesty, fraud, or deceit, which crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with the provisions of this division.
(c) That there is no officer or manager possessing a minimum of five years of responsible escrow or joint control experience stationed or to be stationed at the main office of the corporation and that there is no officer, manager or employee possessing a minimum of four years of responsible escrow or joint control experience stationed or to be stationed at each branch.
(d) That the proposed licensee's financial program is unsound.
(e) A false statement of a material fact has been made in the application for license.
(f) The applicant, any officer, director, general partner, or incorporator of the applicant, or any person owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of the State of California or a foreign jurisdiction.
(g) The applicant has failed to comply with the Fidelity Corporation's membership requirements set forth in subdivision (b) of Section 17312, in subdivision (a) of Section 17320, and in Sections 17331 and 17331.1.
(a) That the corporation is to be formed for any business other than legitimate escrow agent services, or proposes to use a name that is misleading or in conflict with the name of an existing licensee.
(b) That any incorporator, officer, or director of the applicant has, within the last 10 years, been (1) convicted of or pleaded nolo contendere to a crime, or (2) committed any act involving dishonesty, fraud, or deceit, which crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with the provisions of this division.
(c) That there is no officer or manager possessing a minimum of five years of responsible escrow or joint control experience stationed or to be stationed at the main office of the corporation and that there is no officer, manager or employee possessing a minimum of four years of responsible escrow or joint control experience stationed or to be stationed at each branch.
(d) That the proposed licensee's financial program is unsound.
(e) A false statement of a material fact has been made in the application for license.
(f) The applicant, any officer, director, general partner, or incorporator of the applicant, or any person owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of the State of California or a foreign jurisdiction.
(g) The applicant has failed to comply with the Fidelity Corporation's membership requirements set forth in subdivision (b) of Section 17312, in subdivision (a) of Section 17320, and in Sections 17331 and 17331.1.
The license shall state whether the licensee is licensed
as an escrow agent or joint control agent.
(a) An escrow agent licensed on or after January 1, 1986,
shall maintain at all times a tangible net worth of fifty thousand
dollars ($50,000), including liquid assets of at least twenty-five
thousand dollars ($25,000) in excess of current liabilities.
(b) An escrow agent licensed prior to January 1, 1986, shall maintain at all times a tangible net worth according to the following schedule:
(1) Ten thousand dollars ($10,000) from January 1, 1986, through June 30, 1986, including liquid assets of at least ten thousand dollars ($10,000) in excess of current liabilities.
(2) Fifteen thousand dollars ($15,000) as of July 1, 1986, including liquid assets of at least fifteen thousand dollars ($15,000) in excess of current liabilities.
(3) Twenty thousand dollars ($20,000) as of July 1, 1987, including liquid assets of at least twenty thousand dollars ($20,000) in excess of current liabilities.
(4) Twenty-five thousand dollars ($25,000) as of July 1, 1988, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(5) Thirty thousand dollars ($30,000) as of July 1, 1989, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(6) Thirty-five thousand dollars ($35,000) as of July 1, 1990, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(7) Forty thousand dollars ($40,000) as of July 1, 1991, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(8) Forty-five thousand dollars ($45,000) as of July 1, 1992, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(9) Fifty thousand dollars ($50,000) as of July 1, 1993, and thereafter, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(c) The commissioner may determine by rule as to which assets constitute liquid assets and may also determine in an individual case by a specific written ruling whether a particular asset is a liquid asset within the meaning of this section.
(d) In the case of a licensed branch office, a tangible net worth in addition to that required by subdivision (a) shall be maintained at an amount equal to 50 percent of the tangible net worth required by subdivision (a), except that licensees operating or applying for more than one branch office shall maintain an additional tangible net worth of at least 25 percent of the amount required by subdivision (a) for each branch office licensed after the first branch office location.
(b) An escrow agent licensed prior to January 1, 1986, shall maintain at all times a tangible net worth according to the following schedule:
(1) Ten thousand dollars ($10,000) from January 1, 1986, through June 30, 1986, including liquid assets of at least ten thousand dollars ($10,000) in excess of current liabilities.
(2) Fifteen thousand dollars ($15,000) as of July 1, 1986, including liquid assets of at least fifteen thousand dollars ($15,000) in excess of current liabilities.
(3) Twenty thousand dollars ($20,000) as of July 1, 1987, including liquid assets of at least twenty thousand dollars ($20,000) in excess of current liabilities.
(4) Twenty-five thousand dollars ($25,000) as of July 1, 1988, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(5) Thirty thousand dollars ($30,000) as of July 1, 1989, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(6) Thirty-five thousand dollars ($35,000) as of July 1, 1990, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(7) Forty thousand dollars ($40,000) as of July 1, 1991, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(8) Forty-five thousand dollars ($45,000) as of July 1, 1992, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(9) Fifty thousand dollars ($50,000) as of July 1, 1993, and thereafter, including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.
(c) The commissioner may determine by rule as to which assets constitute liquid assets and may also determine in an individual case by a specific written ruling whether a particular asset is a liquid asset within the meaning of this section.
(d) In the case of a licensed branch office, a tangible net worth in addition to that required by subdivision (a) shall be maintained at an amount equal to 50 percent of the tangible net worth required by subdivision (a), except that licensees operating or applying for more than one branch office shall maintain an additional tangible net worth of at least 25 percent of the amount required by subdivision (a) for each branch office licensed after the first branch office location.
The license shall be kept conspicuously posted in all
places of business of the licensee.
(a) No escrow agent shall disseminate, or cause or permit
to be disseminated, in any manner whatsoever, any statement or
representation which is false, misleading, or deceptive, or which
omits to state material information, or which refers to the
supervision of that agent by the State of California or any
department or official thereof.
(b) A licensed escrow agent, in referring to the corporation's licensure under this law in any written or printed communication or any communication by means of recorded telephone messages or spoken on radio, television, or similar communications media, shall include the following statement: "This escrow company holds California Department of Business Oversight Escrow License No. ____."
(c) The commissioner may order any person to desist from any conduct which the commissioner finds to be a violation of this section.
(b) A licensed escrow agent, in referring to the corporation's licensure under this law in any written or printed communication or any communication by means of recorded telephone messages or spoken on radio, television, or similar communications media, shall include the following statement: "This escrow company holds California Department of Business Oversight Escrow License No. ____."
(c) The commissioner may order any person to desist from any conduct which the commissioner finds to be a violation of this section.
All licensees shall notify the commissioner of any changes
in shareholders, directors, officers, trustees, managers, and other
persons participating in the escrow business directly or indirectly
compensated by the escrow agent (other than usual and customary
employees who file pursuant to subdivision (d) of Section 17414.1 and
Section 17419), by filing by certified mail, return receipt
requested, for those persons a statement of identity and
questionnaire, as prescribed by the commissioner for those persons,
and fingerprint images and related information, submitted using the
process established by the Department of Justice for requesting state
and federal summary criminal history information. Persons who have
previously submitted fingerprints or fingerprint images and related
information to the commissioner may so notify the commissioner and
need not submit additional fingerprint images and related information
unless requested to do so by the commissioner. The commissioner
shall provide written notice to both the licensee and to the person
if any of the information received pursuant to this division shows
that the person's employment, participation, or ownership interest
would be in violation of Section 17414.1, and upon that notification
the escrow agent shall deny the person the employment or interest. No
person shall have access to trust funds or sign checks or otherwise
perform any activities related to the processing of escrow
transactions after the licensed escrow agent has been notified by the
commissioner that the person's employment, participation, or
ownership interest is in violation of Section 17414.1. The
requirements set forth in this section are in addition to those
required under Section 17213.
The commissioner may by regulation require licensees to file at
such times as he or she may specify additional information as he or
she may reasonably require regarding any changes in the information
provided in any application filed pursuant to this division.
(a) An escrow agent shall not transact business pursuant to
this division under any other name than that set forth in the
articles of incorporation as filed with the commissioner.
(b) An escrow agent's license is not transferable or assignable. Further, no license may be acquired, either in whole or in part, directly or indirectly, through stock purchase, foreclosure pursuant to a pledge or hypothecation, or other devices without the consent of the commissioner. Prior to the transfer of 10 percent or more of the shares of an escrow agent, the escrow agent shall file a new application for licensure as required by Section 17201. However, a new application for licensure shall not be required to be filed by the escrow agent if the transfer of 10 percent or more of the shares of the escrow agent will be made by an existing shareholder to another existing shareholder who also owns 10 percent or more of the shares of the escrow agent before the transfer.
(b) An escrow agent's license is not transferable or assignable. Further, no license may be acquired, either in whole or in part, directly or indirectly, through stock purchase, foreclosure pursuant to a pledge or hypothecation, or other devices without the consent of the commissioner. Prior to the transfer of 10 percent or more of the shares of an escrow agent, the escrow agent shall file a new application for licensure as required by Section 17201. However, a new application for licensure shall not be required to be filed by the escrow agent if the transfer of 10 percent or more of the shares of the escrow agent will be made by an existing shareholder to another existing shareholder who also owns 10 percent or more of the shares of the escrow agent before the transfer.
(a) An escrow agent's business shall not be removed from
the premises or address shown on the license without the prior
approval of the commissioner, and notice of any intended change shall
be transmitted to the commissioner not less than 30 days prior to
the date of the intended change of location; provided, however, that
the commissioner may waive the 30-day notice requirement when the
move is occasioned by fire, emergency, or other catastrophe. The
commissioner's approval shall be granted or denied within 30 days
from the date of the commissioner's receipt of the licensee's request
containing such information as the commissioner may require.
(b) When a licensed business is to be moved a distance of five or more miles, and a change in ownership results from a transfer of 50 percent or more of the shares of the corporation, a licensee shall file an application for authorization to change location on a form furnished by the commissioner and the commissioner shall: (1) treat the matter as an application for a new license by invoking the provisions of Sections 17209, 17209.1, 17209.2, and 17209.3, and (2) require the payment of such fees as are applicable under Section 17207. The provisions of this subdivision shall not apply when the actual or contemplated change of ownership is to the transferor's ancestors, descendants, or spouse, or any custodian or trustee for the account of the transferor or the transferor's ancestors, descendants, or spouse.
(b) When a licensed business is to be moved a distance of five or more miles, and a change in ownership results from a transfer of 50 percent or more of the shares of the corporation, a licensee shall file an application for authorization to change location on a form furnished by the commissioner and the commissioner shall: (1) treat the matter as an application for a new license by invoking the provisions of Sections 17209, 17209.1, 17209.2, and 17209.3, and (2) require the payment of such fees as are applicable under Section 17207. The provisions of this subdivision shall not apply when the actual or contemplated change of ownership is to the transferor's ancestors, descendants, or spouse, or any custodian or trustee for the account of the transferor or the transferor's ancestors, descendants, or spouse.
The commissioner may order a licensed escrow agent which
opens a branch office or changes its business location or locations
without first obtaining the approval of the commissioner to forfeit
to the people of the state a sum of up to one hundred dollars ($100)
for every day for the first 10 days and ten dollars ($10) for every
day thereafter during which the branch office or changed location is
maintained without authority.
Licensees of this division shall be entitled to establish
additional business office locations by compliance with all of the
following:
(a) Filing with the commissioner notice of the intended address, or addresses.
(b) Payment of the fees prescribed in Section 17207.
(c) Filing with the commissioner any additional bonds for the purposes set forth in Sections 17202 and 17203. In addition to the amount required by Section 17202, the amounts for additional office locations shall be five thousand dollars ($5,000) for each additional location. The aggregate amounts of all bonds given by a licensee under this section shall be for the purpose of complying with the conditions of Sections 17202 and 17203 regardless of the office location at which any act violating those conditions takes place, and upon payment of the aggregate amount, the surety is completely released from further liability under the bond or bonds. An escrow agent licensed prior to January 1, 1996, shall comply with the requirements of this subdivision at the time of the next renewal of its bond.
(d) Filing with the commissioner financial statements prepared in accordance with generally accepted accounting principles. If the licensee's fiscal year end is more than six months before the date of filing the application, the commissioner may require current financial statements which shall not be more than 60 days old. The interim financial statements may be unaudited.
(e) Filing with the commissioner the names and addresses of the licensee's owners and employees to be stationed at the new location, showing that the operation of the additional office, or offices, will be under the complete management and control of the parent licensee.
(f) Filing with the commissioner statements offsetting and meeting each of the conditions set forth in Section 17209.3. With respect to all applications for authorization to establish additional locations, the commissioner shall promptly commence his or her investigation and review of the application. The commissioner shall within 30 days from the receipt by the commissioner of a separate and complete application, license the designated premises as a branch of the parent licensee, unless the commissioner finds (1) that the applicant has failed to comply with all of the requirements of this section, (2) that the applicant then fails to meet any of the standards applicable for the issuance of a license pursuant to Section 17209.3, or (3) that a hearing shall be held to determine whether the application should be granted or denied.
(a) Filing with the commissioner notice of the intended address, or addresses.
(b) Payment of the fees prescribed in Section 17207.
(c) Filing with the commissioner any additional bonds for the purposes set forth in Sections 17202 and 17203. In addition to the amount required by Section 17202, the amounts for additional office locations shall be five thousand dollars ($5,000) for each additional location. The aggregate amounts of all bonds given by a licensee under this section shall be for the purpose of complying with the conditions of Sections 17202 and 17203 regardless of the office location at which any act violating those conditions takes place, and upon payment of the aggregate amount, the surety is completely released from further liability under the bond or bonds. An escrow agent licensed prior to January 1, 1996, shall comply with the requirements of this subdivision at the time of the next renewal of its bond.
(d) Filing with the commissioner financial statements prepared in accordance with generally accepted accounting principles. If the licensee's fiscal year end is more than six months before the date of filing the application, the commissioner may require current financial statements which shall not be more than 60 days old. The interim financial statements may be unaudited.
(e) Filing with the commissioner the names and addresses of the licensee's owners and employees to be stationed at the new location, showing that the operation of the additional office, or offices, will be under the complete management and control of the parent licensee.
(f) Filing with the commissioner statements offsetting and meeting each of the conditions set forth in Section 17209.3. With respect to all applications for authorization to establish additional locations, the commissioner shall promptly commence his or her investigation and review of the application. The commissioner shall within 30 days from the receipt by the commissioner of a separate and complete application, license the designated premises as a branch of the parent licensee, unless the commissioner finds (1) that the applicant has failed to comply with all of the requirements of this section, (2) that the applicant then fails to meet any of the standards applicable for the issuance of a license pursuant to Section 17209.3, or (3) that a hearing shall be held to determine whether the application should be granted or denied.
(a) There is established in the Department of Business
Oversight an Escrow Law Advisory Committee consisting of 11 members.
The members shall consist of the commissioner or his or her designee;
the chairman of the board and the immediate past chairman of the
board for the Escrow Agents' Fidelity Corporation; the current
chairman of the board and the immediate past chairman of the board
for the Escrow Institute of California; a person selected by the
commissioner to represent a different type of business ownership
under this division; a person selected by the commissioner to
represent a different type of business specialization; a person
selected by the commissioner to represent small businesses operating
pursuant to this division; a person selected by the commissioner to
represent medium-sized businesses operating pursuant to this
division; an attorney at law experienced in escrow matters selected
by the commissioner; and a certified public accountant experienced in
the escrow business selected by the commissioner.
Except for the members from the Escrow Agents' Fidelity
Corporation and the Escrow Institute of California, members appointed
by the commissioner shall serve for a term of two years.
The committee shall meet at least quarterly. The commissioner or
his or her designee shall chair the committee. All members shall
serve without compensation or reimbursement for expenses.
Where the chairman of the board or the immediate past chairman of
the board of the Escrow Agents' Fidelity Corporation is the same
person, or is unable to serve on the advisory committee, then the
commissioner, after consultation with the board of directors of the
Escrow Agents' Fidelity Corporation, shall choose a member of the
board of directors to serve on the committee. Where the president or
past president of the Escrow Institute of California is the same
person, or is unable to serve on the advisory committee, then the
commissioner, after consultation with the board of directors of the
Escrow Institute of California, shall choose a member of the board of
directors to serve on the committee.
(b) The purpose of the committee is to assist the commissioner in the implementation of the commissioner's duties under this chapter.
(b) The purpose of the committee is to assist the commissioner in the implementation of the commissioner's duties under this chapter.
Whenever the commissioner issues a license or order under
this division, the commissioner may impose conditions that are
necessary and appropriate to carry out the provisions and purposes of
this division and, with respect to Internet escrow agents, are also
consistent with the intent of the Legislature.
