Bill Text: CA AB2618 | 2023-2024 | Regular Session | Amended
Bill Title: Surplus funds: investment.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2024-05-02 - Read second time. Ordered to Consent Calendar. [AB2618 Detail]
Download: California-2023-AB2618-Amended.html
|
Amended
IN
Assembly
March 21, 2024 |
| Introduced by Assembly Member Chen |
February 14, 2024 |
LEGISLATIVE COUNSEL'S DIGEST
Existing law, the Debt Collection Licensing Act, prohibits a person from engaging in the business of debt collection in the state without first obtaining a license from the Commissioner of Financial Protection and Innovation, in accordance with specified requirements. Existing law authorizes the commissioner to allow any debt collector that submits an application before January 1, 2023, to operate pending the approval or denial of the application in accordance with specified requirements.
This bill would make a nonsubstantive change to these provisions.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 53601.8 of the Government Code, as amended by Section 1 of Chapter 619 of the Statutes of 2019, is amended to read:53601.8.
Notwithstanding any other provision of this code, a local agency that has the authority under law to invest funds, at its discretion, may invest a portion of its surplus funds in deposits at a commercial bank, savings bank, savings and loan association, or credit union that uses a private sector entity that assists in the placement of deposits. The following conditions shall apply:(k)This section shall remain in effect until January 1, 2026, and as of that date is repealed.
SEC. 2.
Section 53601.8 of the Government Code, as added by Section 3 of Chapter 619 of the Statutes of 2019, is repealed.Notwithstanding any other provision of this code, a local agency that has the authority under law to invest funds, at its discretion, may invest a portion of its surplus funds in deposits at a commercial bank, savings bank, savings and loan association, or credit union that uses a private sector entity that assists in the placement of deposits. The following conditions shall apply:
(a)The local agency shall choose a nationally or state-chartered commercial bank, savings bank, savings and loan
association, or credit union in this state to invest the funds, which shall be known as the “selected” depository institution.
(b)The selected depository institution may use a private sector entity to help place local agency deposits with one or more commercial banks, savings banks, savings and loan associations, or credit unions that are located in the United States and are within the network used by the private sector entity for this purpose.
(c)The selected depository institution shall request that the local agency inform
it of depository institutions at which the local agency has other deposits, and the selected depository institution shall provide that information to the private sector entity.
(d)Any private sector entity used by a selected depository institution to help place its local agency deposits shall maintain policies and procedures requiring all of the following:
(1)The full amount of each deposit placed pursuant to subdivision (b) and the interest that may accrue on each such deposit shall at all times be insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.
(2)Every depository institution where funds are placed shall be capitalized at a level that is sufficient, and be otherwise eligible, to receive such deposits pursuant to regulations of the Federal Deposit Insurance Corporation or the National Credit Union Administration, as applicable.
(3)At the time of the local agency’s investment with a selected depository institution and no less than monthly thereafter, the private sector entity shall ensure that the local agency is provided with an inventory of all depository institutions in which deposits have been placed on the local agency’s behalf, that are within the private sector entity’s network.
(4)Within its network, the private sector entity shall ensure that it does not place additional deposits from a particular local agency with any depository institution identified pursuant to subdivision (c) as holding that local agency’s deposits if those additional deposits would result in that local agency’s total amount on deposit at that depository institution exceeding the Federal Deposit Insurance Corporation or the National Credit Union Administration insurance limit.
(e)If a selected depository uses two or more private sector entities to assist in the placement of a local agency’s deposits, the selected depository shall ensure that it does not place additional deposits from a particular local agency with a depository institution if those additional deposits would result in that local agency’s total amount on deposit at that depository institution exceeding the Federal Deposit Insurance Corporation or the National Credit Union Administration insurance limit.
(f)The selected depository institution shall serve as a custodian for each such deposit.
(g)On the same date that the local agency’s funds are placed pursuant to subdivision (b) by the private sector entity, the selected depository institution shall receive an amount of insured deposits from other financial institutions that, in total, are equal
to, or greater than, the full amount of the principal that the local agency initially deposited through the selected depository institution pursuant to subdivision (b).
(h)Notwithstanding subdivisions (a) to
(g), inclusive, a credit union shall not act as a selected depository institution under this section unless both of the following conditions are satisfied:
(1)The credit union offers federal depository insurance through the National Credit Union Administration.
(2)The credit union is in possession of written guidance or other written communication from the National Credit Union Administration authorizing participation of federally insured credit unions in one or more deposit placement services and affirming that the moneys held by those credit unions while participating in a deposit placement service will at all times be insured by the federal government.
(i)It is the intent of the Legislature that this section shall not restrict competition among private sector entities that provide placement services pursuant to this section.
(j)The deposits placed pursuant to this section shall be subject to Section 53638 and shall not, in total, exceed 30 percent of the agency’s funds that may be invested for this purpose.
(k)This section shall become operative on January 1,
2026.
(a)The commissioner shall allow a debt collector that submits an application before January 1, 2023, to operate pending the approval or denial of the application.
(b)(1)Notwithstanding Section 100011, the commissioner may issue a conditional license to an applicant pending compliance with the requirements of subdivisions (a) to (c), inclusive, of Section 100008.
(2)A conditional license issued pursuant to this subdivision shall expire at the earliest of the following:
(A)Ninety days after the requirements of Sections 100007, 100008, and 100009 have been satisfied.
(B)Upon the issuance of an unconditional license.
(C)Ninety days after the commissioner directs the licensee in writing to submit fingerprints for submission to the Department of Justice pursuant to Section 100008, if the licensee fails to submit a set of fingerprints for each individual described in Section 100009.
(D)Upon the denial, pursuant to Section 100012, of a license application.
(c)The commissioner may deny an application under Section 100012 at any time before the issuance of an unconditional license.
