Financial Institutions Law.
The amendment involves specifying that the term 'member of the public' excludes certain individuals such as directors, officers, employees, attorneys, accountants, and consultants related to a licensee, as long as the confidential information involved pertains solely to the licensee they serve. This change seeks to refine the definition to enhance clarity in the legal framework governing interactions between financial institutions and the public, potentially reducing confusion about who is afforded protections under the law.
Assembly Bill No. 2688, introduced by Assembly Member Chen on February 18, 2022, proposes an amendment to Section 187 of the Financial Code, which governs financial institutions in California. This bill aims to clarify and make nonsubstantive changes to the definition of 'member of the public' in the context of financial regulations. Currently, the law regulates various financial entities, including commercial banks, credit unions, and industrial banks, ensuring transparency and accountability within these institutions.
While the bill primarily focuses on clarifying legal terminology, there is concern among some stakeholders regarding the implications of excluding certain individuals from the definition of 'member of the public'. Critics argue that this exclusion may limit transparency in the operation of financial institutions, as it may permit directors and other key personnel to evade scrutiny under specific circumstances. Therefore, discussions around this bill may center on the balance between the need for clarity in financial regulations and the necessity of maintaining public oversight over these institutions.