Existing law, the Escrow Law, requires people engaging in business as escrow agents to be organized as corporations for that purpose, as specified, and appropriately licensed by the Commissioner of Financial Protection and Innovation. Existing law requires an escrow agent licensed on or after January 1, 1986, to maintain a tangible net worth of $50,000, including liquid assets of at least $25,000 in excess of current liabilities. Existing law required an escrow agent licensed before January 1, 1986, to maintain an increasing tangible net worth pursuant to a prescribed schedule, the amounts of which, by 1993, matched the requirements for escrow agents licensed on and after January 1, 1986.
This bill would delete obsolete provisions by deleting the tangible net worth schedule for escrow agents licensed before January 1, 1986, as described above,
and the distinctions in this context based on when an agent was licensed.
Existing law requires, among other requirements relating to submissions of financial statements to the commissioner, each escrow agent licensee to submit to the commissioner, at the licensee’s own expense, an audit report containing audited financial statements covering the calendar year or, if the licensee has an established fiscal year, then for that fiscal year, within 105 days after the close of the calendar or fiscal year, as applicable. Existing law makes it unlawful to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of any provision of the Escrow Law. Existing law also makes it unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination,
with the intent to impede, obstruct, or influence the administration or enforcement of any provision of the Escrow Law.
This bill would require the commissioner to exempt an escrow agent licensee from the provisions of Topic 842 of the Financial Accounting Standards Board’s Accounting Standards Update, relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensee’s own expense and in compliance with specified requirements, audited financial statements covering the current and immediately preceding calendar or fiscal years or, if the licensee has an established fiscal year, then for the current and immediately preceding fiscal years. The bill would provide that a licensee is exempt
only until an independent accountant, third-party
contractor, unless an independent public accountant or the commissioner conducts an audit of the licensee and deems the licensee’s financial records are not materially designated as qualified, as defined. to be not prepared in accordance with generally accepted accounting principles and specified rules of the commissioner. By expanding the scope of a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.