53661
. (a) The Commissioner of Business Oversight shall act as
Administrator of Local Agency Security and shall be responsible for
the administration of Sections 53638, 53651, 53651.2, 53651.4,
53651.6, 53652, 53654, 53655, 53656, 53657, 53658, 53659, 53660,
53661, 53663, 53664, 53665, 53666, and 53667.
(b) The administrator shall have the powers necessary or
convenient to administer and enforce the sections specified in
subdivision (a).
(c) (1) The administrator shall issue regulations consistent with
law as the administrator may deem necessary or advisable in executing
the powers, duties, and responsibilities assigned by this article.
The regulations may include regulations prescribing standards for the
valuation, marketability, and liquidity of the eligible securities
of the class described in subdivision (m) of Section 53651,
regulations prescribing procedures and documentation for adding,
withdrawing, substituting, and holding pooled securities, and
regulations prescribing the form, content, and execution of any
application, report, or other document called for in any of the
sections specified in subdivision (a) or in any regulation or order
issued under any of those sections.
(2) The administrator, for good cause, may waive any provision of
any regulation adopted pursuant to paragraph (1) or any order issued
under this article, where the provision is not necessary in the
public interest.
(d) The administrator may enter into any contracts or agreements
as may be necessary, including joint underwriting agreements, to sell
or liquidate eligible securities securing local agency deposits in
the event of the failure of the depository or if the depository fails
to pay all or part of the deposits of a local agency.
(e) The administrator shall require from every depository a report
certified by the agent of depository listing all securities, and the
market value thereof, which are securing local agency deposits
together with the total deposits then secured by the pool, to
determine whether there is compliance with Section 53652. These
reports may be required whenever deemed necessary by the
administrator, but shall be required at least four times each year at
the times designated by the Comptroller of the Currency for reports
from national banking associations. These reports shall be filed in
the office of the administrator by the depository within 20 business
days of the date the administrator calls for the report.
(f) The administrator may have access to reports of examination
made by the Comptroller of the Currency insofar as the reports relate
to national banking association trust department activities which
are subject to this article.
(g) (1) The administrator shall require the immediate substitution
of an eligible security, where the substitution is necessary for
compliance with Section 53652, if (i) the administrator determines
that a security listed in Section 53651 is not qualified to secure
public deposits, or (ii) a treasurer, who has deposits secured by the
securities pool, provides written notice to the administrator and
the administrator confirms that a security in the pool is not
qualified to secure public deposits.
(2) The failure of a depository to substitute securities, where
the administrator has required the substitution, shall be reported by
the administrator promptly to those treasurers having money on
deposit in that depository and, in addition, shall be reported as
follows:
(A) When that depository is a national bank, to the Comptroller of
the Currency of the United States.
(B) When that depository is a state bank, to the Commissioner of
Business Oversight.
(C) When that depository is a federal association, to the Office
of the Comptroller of the Currency.
(D) When that depository is a savings association, to the
Commissioner of Business Oversight.
(E) When that depository is a federal credit union, to the
National Credit Union Administration.
(F) When that depository is a state credit union or a federally
insured industrial loan company, to the Commissioner of Business
Oversight.
(h) The administrator may require from each treasurer a
registration report and at appropriate times a report stating the
amount and location of each deposit together with other information
deemed necessary by the administrator for effective operation of this
article. The facts recited in any report from a treasurer to the
administrator are conclusively presumed to be true for the single
purpose of the administrator fulfilling responsibilities assigned to
him or her by this article and for no other purpose.
(i) (1) If, after notice and opportunity for hearing, the
administrator finds that any depository or agent of depository has
violated or is violating, or that there is reasonable cause to
believe that any depository or agent of depository is about to
violate, any of the sections specified in subdivision (a) or any
regulation or order issued under any of those sections, the
administrator may order the depository or agent of depository to
cease and desist from the violation or may by order suspend or revoke
the authorization of the agent of depository. The order may require
the depository or agent of depository to take affirmative action to
correct any condition resulting from the violation.
(2) (A) If the administrator makes any of the findings set forth
in paragraph (1) with respect to any depository or agent of
depository and, in addition, finds that the violation or the
continuation of the violation is likely to seriously prejudice the
interests of treasurers, the administrator may order the depository
or agent of depository to cease and desist from the violation or may
suspend or revoke the authorization of the agent of depository. The
order may require the depository or agent of depository to take
affirmative action to correct any condition resulting from the
violation.
(B) Within five business days after an order is issued under
subparagraph (A), the depository or agent of depository may file with
the administrator an application for a hearing on the order. The
administrator shall schedule a hearing at least 30 days, but not more
than 40 days, after receipt of an application for a hearing or
within a shorter or longer period of time agreed to by a depository
or an agent of depository. If the administrator fails to schedule the
hearing within the specified or agreed to time period, the order
shall be deemed rescinded. Within 30 days after the hearing, the
administrator shall affirm, modify, or rescind the order; otherwise,
the order shall be deemed rescinded. The right of a depository or
agent of depository to which an order is issued under subparagraph
(A) to petition for judicial review of the order shall not be
affected by the failure of the depository or agent of depository to
apply to the administrator for a hearing on the order pursuant to
this subparagraph.
(3) Whenever the administrator issues a cease and desist order
under paragraph (1) or (2), the administrator may in the order
restrict the right of the depository to withdraw securities from a
security pool; and, in that event, both the depository to which the
order is directed and the agent of depository which holds the
security pool shall comply with the restriction.
(4) In case the administrator issues an order under paragraph (1)
or (2) suspending or revoking the authorization of an agent of
depository, the administrator may order the agent of depository at
its own expense to transfer all pooled securities held by it to such
agent of depository as the administrator may designate in the order.
The agent of depository designated in the order shall accept and hold
the pooled securities in accordance with this article and
regulations and orders issued under this article.
(j) In the discretion of the administrator, whenever it appears to
the administrator that any person has violated or is violating, or
that there is reasonable cause to believe that any person is about to
violate, any of the sections specified in subdivision (a) or any
regulation or order issued thereunder, the administrator may bring an
action in the name of the people of the State of California in the
superior court to enjoin the violation or to enforce compliance with
those sections or any regulation or order issued thereunder. Upon a
proper showing a permanent or preliminary injunction, restraining
order, or writ of mandate shall be granted, and the court may not
require the administrator to post a bond.
(k) In addition to other remedies, the administrator shall have
the power and authority to impose the following sanctions for
noncompliance with the sections specified in subdivision (a) after a
hearing if requested by the party deemed in noncompliance. Any fine
assessed pursuant to this subdivision shall be paid within 30 days
after receipt of the assessment.
(1) Assess against and collect from a depository a fine not to
exceed two hundred fifty dollars ($250) for each day the depository
fails to maintain with the agent of depository securities as required
by Section 53652.
(2) Assess against and collect from a depository a fine not to
exceed one hundred dollars ($100) for each day beyond the time period
specified in subdivision (b) of Section 53663 the depository
negligently or willfully fails to file in the office of the
administrator a written report required by that section.
(3) Assess against and collect from a depository a fine not to
exceed one hundred dollars ($100) for each day beyond the time period
specified in subdivision (e) that a depository negligently or
willfully fails to file in the office of the administrator a written
report required by that subdivision.
(4) Assess and collect from an agent of depository a fine not to
exceed one hundred dollars ($100) for each day the agent of
depository fails to comply with any of the applicable sections
specified in subdivision (a) or any applicable regulation or order
issued thereunder.
(l) (1) In the event that a depository or agent of depository
fails to pay a fine assessed by the administrator pursuant to
subdivision (k) within 30 days of receipt of the assessment, the
administrator may assess and collect an additional penalty of 5
percent of the fine for each month or part thereof that the payment
is delinquent.
(2) If a depository fails to pay the fines or penalties assessed
by the administrator, the administrator may notify local agency
treasurers with deposits in the depository.
(3) If an agent of depository fails to pay the fines or penalties
assessed by the administrator, the administrator may notify local
agency treasurers who have authorized the agent of depository as
provided in Sections 53649 and 53656, and may by order revoke the
authorization of the agent of depository as provided in subdivision
(i).
(m) The amendments to this section enacted by the Legislature
during the 1999-2000 Regular Session shall become operative on
January 1, 2001.