CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Senate Bill No. 1176Introduced by Senator LimnFebruary 17, 2022 An act to add Division 26 (commencing with Section 100100) to the Financial Code, relating to financial institutions. LEGISLATIVE COUNSEL'S DIGESTSB 1176, as introduced, Limn. Financial institutions: California Community Reinvestment Act.Existing law establishes the Department of Financial Protection and Innovation, which is under the direction of the Commissioner of Financial Protection and Innovation. Existing law makes the department responsible for administering various laws relating to financial institutions, including banks and credit unions. Existing law, until January 1, 2030, establishes the Financial Empowerment Fund, and provides that moneys in the fund are continuously appropriated to the commissioner for allocation to fund financial education and financial empowerment programs and services for at-risk populations in California, as specified.This bill would establish the California Community Reinvestment Act, and would require a covered financial institution, as defined, to have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which the covered financial institution conducts substantial business, as specified. The bill would require the commissioner to assess the record of each covered financial institution in satisfying this obligation no less than once every 3 years, as specified. After each assessment, the bill would require the commissioner to assign one of 5 possible ratings to describe how the covered financial institution is meeting its community financial services needs, and to prepare a specified written evaluation of the covered financial institutions record of performance. The bill would authorize the commissioner to consider this record of performance when considering an application for, among other things, the establishment of a branch or the relocation of a main office. The bill would also prohibit a covered financial institution with certain ratings from receiving state funds for deposit or being awarded a state contract to provide financial services.This bill would also authorize the commissioner to conduct specified investigations into covered financial institutions for compliance with the act. The bill would also authorize the commissioner to examine, in consultation with state and federal regulators, covered financial institutions for their compliance with specified state and federal laws.This bill would establish the Community Reinvestment Fund within the State Treasury, and would make moneys in the fund available, upon appropriation by the Legislature, to the commissioner for purposes of administering these provisions. The bill would authorize the commissioner to issue an administrative penalty of up to $100,000 to a covered financial institution that regularly fails to meet its obligations under the act, and would require those penalties to be deposited in the fund.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Division 26 (commencing with Section 100100) is added to the Financial Code, to read:DIVISION 26. California Community Reinvestment Act100100. This division may be known and cited as the California Community Reinvestment Act.100102. For the purposes of this division, the following definitions apply:(a) Commissioner means the Commissioner of Financial Protection and Innovation.(b) Covered financial institution means all of the following that are subject to the licensing laws of this state:(1) A bank.(2) A credit union.(3) A residential mortgage lender.(4) A money transmitter that sells or issues stored value, as defined in Section 2003.(c) Fund means the Community Reinvestment Fund, as specified in subdivision (a) of Section 100128.100104. (a) A covered financial institution shall have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which its offices, branches, and other facilities are maintained and where it conducts substantial business, consistent with the safe and sound operation of the financial institution, and for credit unions, consistent with its common bond.(b) A covered financial institution that provides all or a majority of its products and services via mobile and other digital channels shall have a continuing and affirmative obligation to help meet the financial services needs of a deposit-based, lending-based, activities-based, or statewide assessment area, including low-income and moderate-income neighborhoods and neighborhoods of color, and areas where there is a lack of access to safe and affordable banking and lending services, consistent with the safe and sound operation of those financial institutions, including credit unions, consistent with its common bond.100106. (a) Before January 1, 2025, a covered financial institution shall conduct an initial assessment to determine the financial services needs of local communities.(b) The covered financial institution shall solicit public input to be considered in the assessment required by subdivision (a).(c) (1) Upon completion of the assessment required by subdivision (a), the covered financial institution shall deliver, in writing, the assessment and evidence of the covered financial institutions satisfaction of subdivision (b) to the commissioner.(2) The covered financial institution and the commissioner shall make the documents submitted pursuant to paragraph (1) available to the public for further comment on their respective internet websites.100108. (a) The commissioner shall assess the record of each covered financial institution in satisfying its obligation under Section 100104.(b) The commissioner shall conduct an assessment described by subdivision (a) for every covered financial institution for compliance with this division no less than once every three years.(c) The commissioner shall make public an assessment schedule at the beginning of each year and invite public comment related to a covered financial institutions compliance with this division.(d) To assist in carrying out this division, the commissioner shall adopt rules incorporating all federal regulations applicable to covered financial institutions, and the commissioner may make adjustments and exceptions thereto as the commissioner deems necessary.100110. To assist in conducting the assessments required by Section 100108, the commissioner shall adopt rules providing for consideration of the following factors, at a minimum, pertaining to whether covered financial institutions are meeting the financial services needs of local communities:(a) Activities to ascertain the financial services needs of the community, including communication with community members regarding the financial services provided.(b) Extent of marketing to make members of the community aware of the financial services and products offered.(c) The current distribution of the institutions branches among low-, moderate-, middle-, and upper-income geographies, and the institutions record of opening and closing branches, particularly branches located in rural or low- and moderate-income geographies and neighborhoods of color.(d) The origination of mortgage loans, including, but not limited to, home purchase, home improvement and rehabilitation loans, and other efforts to assist existing low-income and moderate-income residents to be able to remain in affordable housing in their neighborhoods.(e) The range of mortgage loan products offered, including, but not limited to, the offerings of government-backed loans or loans featuring low downpayments or other features designed to facilitate lending to low- and moderate-income borrowers.(f) For small business and farm lenders, the origination of loans to businesses and farms with gross annual revenues of one million dollars ($1,000,000) or less, particularly those in rural and low- and moderate-income neighborhoods.(g) The percentage of consumer and commercial loans applied for and originated by race and ethnicity, as reported by the borrower, and whether these consumer and commercial credit needs are being met.(h) Participation, including by making investments or grants, in community development and redevelopment programs, affordable housing creation and preservation, small business technical assistance programs, minority-owned depository institutions, community development financial institutions, tribal communities, projects and initiatives to increase access to high-speed internet and broadband services for underserved communities, green initiatives, housing counseling agencies, community land trusts, and other nonprofit organizations serving the affordable and fair housing, economic development, and wealth building needs of the community.(i) Efforts working with delinquent customers to facilitate a resolution of the delinquency.(j) For mortgage loans, the institutions efforts to work with delinquent borrowers to facilitate a resolution of the delinquency, including the number of loan modifications, the timeliness of such modifications, and the extent to which those modifications are effective in preventing subsequent defaults or foreclosures, in addition to data on numbers of delinquencies and foreclosures. If foreclosure is unavoidable, efforts to transfer property ownership to community land trusts, bona fide nonprofit housing organizations, or prospective owner occupants.(k) Origination of loans that show an undue concentration and a systematic pattern of lending resulting in the loss of affordable housing, deed restricted and rent controlled units, and displacement of residents, which shall result in a downgrade of the rating given pursuant to Section 100114.(l) The racial, ethnic, and gender diversity of the institutions board of directors and senior management.(m) For a covered financial institution that is a depository institution, the institutions use of reports from a specialty consumer reporting agency to determine eligibility for opening a bank account.(n) For covered financial institutions that are depository institutions, the number of open and active accounts that meet the Bank On National Account Standards issued by the Cities for Financial Empowerment Fund.(o) Evidence of discriminatory and prohibited practices, including violations of consumer protection laws, which shall result in a downgrade of the rating given pursuant to Section 100114.(p) An institutions record of meeting community needs, as informed by public comment.(q) Any other factors or requirements, as determined by the commissioner, which reasonably bear on the extent to which a covered financial institution is meeting the financial services needs of its entire community, including responsiveness to community needs as reflected by public comments.100112. (a) (1) The commissioner may at any time investigate into the affairs of, and examine the books, accounts, records, files, and offices, whether within or outside of this state, used in the business of a covered financial institution, for compliance with this division.(2) The commissioner and the commissioners duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a covered financial institution referred to in paragraph (1).(3) The examined officers and employees of a covered financial institution shall exhibit to the examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power.(b) The commissioner, in consultation with state and federal regulators with an appropriate regulatory interest, shall examine each covered financial institution for compliance with this division, as well as applicable fair lending laws, including, but not limited to, the Unruh Civil Rights Act, the federal Equal Credit Opportunity Act, the federal Fair Housing Act, the federal Home Mortgage Disclosure Act, and Section 1071 of the Dodd-Frank Act.(c) The commissioner may adopt rules with respect to the manner of examination, including the imposition of examination fees.(d) The commissioner may conduct any examinations under this division with other state or federal regulators and may enter into cooperative agreements relative to the coordination of or joint participation in any examinations, the amount and assessment of fees therefor or enforcement actions relevant thereto, and may accept reports of assessments by these regulators under those arrangements or agreements.100114. The commissioner shall assign one of the following ratings to describe how a covered financial institution is meeting its community financial services needs based on the assessment conducted under Section 100108:(a) Outstanding.(b) High satisfactory.(c) Satisfactory.(d) Needs to improve.(e) Substantial noncompliance.100116. Upon the completion of the assessment of a covered financial institution under Section 100108, the commissioner shall prepare a written evaluation of the covered financial institutions record of performance relative to this division. The written evaluation shall have a public section, which shall include no less information than would be disclosed in a written evaluation under the federal Community Reinvestment Act, and a summary of relevant Home Mortgage Disclosure Act data, including data related to applications, originations, and denials for conventional and government-insured mortgages based on the demographics of applicants and demographics of neighborhoods, and a confidential section. The commissioner shall give the covered financial institution an opportunity to comment on the evaluation, and then shall make the public section of the written evaluation publicly available on the internet websites of the department and covered financial institution, respectively. The written evaluation shall include, but not be limited to, all of the following:(a) The assessment factors utilized to determine the covered financial institutions descriptive rating.(b) The commissioners conclusions with respect to each assessment factor.(c) A discussion of the facts supporting the conclusions made under subdivision (b).(d) The covered financial institutions descriptive rating and the basis therefor.(e) A summary of public comments.100118. Notwithstanding any other section in this division, the commissioner may establish, by rule, an alternative examination procedure for any covered financial institution that, as of the most recent examination, has been assigned a rating of outstanding or high satisfactory for its record of performance in meeting its community financial services needs.100120. A covered financial institution that receives a rating of needs to improve or substantial noncompliance shall submit a plan within 180 days of receiving the rating to the commissioner describing the covered financial institutions efforts to improve its performance in helping to meet the financial needs of local communities and the results of those efforts. The plan shall be subject to public comment and updated quarterly until the covered financial institution receives a rating of satisfactory or better.100122. A covered financial institution shall provide, in the public lobby of each of its offices, if any, and on its internet website, a public notice that is substantially similar to the following:State of California Community Reinvestment NoticeThe California Department of Financial Protection and Innovation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.100124. In considering an application for the establishment of a branch, office, or other facility, the relocation of a main office, branch, office, or other facility, a license renewal, change in control of a covered financial institution, or a merger or consolidation with or the acquisition of assets or assumption of liabilities of any covered financial institution, out-of-state bank, credit union, or residential mortgage licensee, national bank or credit union, or foreign financial institution, the commissioner shall consider, but not be limited to considering, the record of performance of the covered financial institution and its parent company, including all subsidiaries and affiliates thereof, relative to this division. The record of performance of the covered financial institution may be the basis for the denial of an application.100126. The commissioner shall prepare and submit annually to the Treasurer a list of covered financial institutions which have received a rating of needs to improve or substantial noncompliance pursuant to this division. Notwithstanding any other law, a covered financial institution with a rating of needs to improve or substantial noncompliance shall not receive state funds for deposit or be awarded a state contract to provide financial services.100128. (a) The Community Reinvestment Fund is hereby established within the State Treasury. Moneys in the fund shall be available, upon appropriation by the Legislature, to the commissioner for purposes of administering this division.(b) (1) The commissioner may issue an administrative penalty of up to one hundred thousand dollars ($100,000) to a covered financial institution that regularly fails to meet its obligations prescribed by Section 100104, including, but not limited to, a covered financial institution that receives a rating of substantial noncompliance in any two successive examinations.(2) All moneys received in payment of administrative penalties under this section shall be deposited in the fund.
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Senate Bill No. 1176Introduced by Senator LimnFebruary 17, 2022 An act to add Division 26 (commencing with Section 100100) to the Financial Code, relating to financial institutions. LEGISLATIVE COUNSEL'S DIGESTSB 1176, as introduced, Limn. Financial institutions: California Community Reinvestment Act.Existing law establishes the Department of Financial Protection and Innovation, which is under the direction of the Commissioner of Financial Protection and Innovation. Existing law makes the department responsible for administering various laws relating to financial institutions, including banks and credit unions. Existing law, until January 1, 2030, establishes the Financial Empowerment Fund, and provides that moneys in the fund are continuously appropriated to the commissioner for allocation to fund financial education and financial empowerment programs and services for at-risk populations in California, as specified.This bill would establish the California Community Reinvestment Act, and would require a covered financial institution, as defined, to have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which the covered financial institution conducts substantial business, as specified. The bill would require the commissioner to assess the record of each covered financial institution in satisfying this obligation no less than once every 3 years, as specified. After each assessment, the bill would require the commissioner to assign one of 5 possible ratings to describe how the covered financial institution is meeting its community financial services needs, and to prepare a specified written evaluation of the covered financial institutions record of performance. The bill would authorize the commissioner to consider this record of performance when considering an application for, among other things, the establishment of a branch or the relocation of a main office. The bill would also prohibit a covered financial institution with certain ratings from receiving state funds for deposit or being awarded a state contract to provide financial services.This bill would also authorize the commissioner to conduct specified investigations into covered financial institutions for compliance with the act. The bill would also authorize the commissioner to examine, in consultation with state and federal regulators, covered financial institutions for their compliance with specified state and federal laws.This bill would establish the Community Reinvestment Fund within the State Treasury, and would make moneys in the fund available, upon appropriation by the Legislature, to the commissioner for purposes of administering these provisions. The bill would authorize the commissioner to issue an administrative penalty of up to $100,000 to a covered financial institution that regularly fails to meet its obligations under the act, and would require those penalties to be deposited in the fund.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION
Senate Bill
No. 1176
Introduced by Senator LimnFebruary 17, 2022
Introduced by Senator Limn
February 17, 2022
An act to add Division 26 (commencing with Section 100100) to the Financial Code, relating to financial institutions.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 1176, as introduced, Limn. Financial institutions: California Community Reinvestment Act.
Existing law establishes the Department of Financial Protection and Innovation, which is under the direction of the Commissioner of Financial Protection and Innovation. Existing law makes the department responsible for administering various laws relating to financial institutions, including banks and credit unions. Existing law, until January 1, 2030, establishes the Financial Empowerment Fund, and provides that moneys in the fund are continuously appropriated to the commissioner for allocation to fund financial education and financial empowerment programs and services for at-risk populations in California, as specified.This bill would establish the California Community Reinvestment Act, and would require a covered financial institution, as defined, to have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which the covered financial institution conducts substantial business, as specified. The bill would require the commissioner to assess the record of each covered financial institution in satisfying this obligation no less than once every 3 years, as specified. After each assessment, the bill would require the commissioner to assign one of 5 possible ratings to describe how the covered financial institution is meeting its community financial services needs, and to prepare a specified written evaluation of the covered financial institutions record of performance. The bill would authorize the commissioner to consider this record of performance when considering an application for, among other things, the establishment of a branch or the relocation of a main office. The bill would also prohibit a covered financial institution with certain ratings from receiving state funds for deposit or being awarded a state contract to provide financial services.This bill would also authorize the commissioner to conduct specified investigations into covered financial institutions for compliance with the act. The bill would also authorize the commissioner to examine, in consultation with state and federal regulators, covered financial institutions for their compliance with specified state and federal laws.This bill would establish the Community Reinvestment Fund within the State Treasury, and would make moneys in the fund available, upon appropriation by the Legislature, to the commissioner for purposes of administering these provisions. The bill would authorize the commissioner to issue an administrative penalty of up to $100,000 to a covered financial institution that regularly fails to meet its obligations under the act, and would require those penalties to be deposited in the fund.
Existing law establishes the Department of Financial Protection and Innovation, which is under the direction of the Commissioner of Financial Protection and Innovation. Existing law makes the department responsible for administering various laws relating to financial institutions, including banks and credit unions. Existing law, until January 1, 2030, establishes the Financial Empowerment Fund, and provides that moneys in the fund are continuously appropriated to the commissioner for allocation to fund financial education and financial empowerment programs and services for at-risk populations in California, as specified.
This bill would establish the California Community Reinvestment Act, and would require a covered financial institution, as defined, to have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which the covered financial institution conducts substantial business, as specified. The bill would require the commissioner to assess the record of each covered financial institution in satisfying this obligation no less than once every 3 years, as specified. After each assessment, the bill would require the commissioner to assign one of 5 possible ratings to describe how the covered financial institution is meeting its community financial services needs, and to prepare a specified written evaluation of the covered financial institutions record of performance. The bill would authorize the commissioner to consider this record of performance when considering an application for, among other things, the establishment of a branch or the relocation of a main office. The bill would also prohibit a covered financial institution with certain ratings from receiving state funds for deposit or being awarded a state contract to provide financial services.
This bill would also authorize the commissioner to conduct specified investigations into covered financial institutions for compliance with the act. The bill would also authorize the commissioner to examine, in consultation with state and federal regulators, covered financial institutions for their compliance with specified state and federal laws.
This bill would establish the Community Reinvestment Fund within the State Treasury, and would make moneys in the fund available, upon appropriation by the Legislature, to the commissioner for purposes of administering these provisions. The bill would authorize the commissioner to issue an administrative penalty of up to $100,000 to a covered financial institution that regularly fails to meet its obligations under the act, and would require those penalties to be deposited in the fund.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Division 26 (commencing with Section 100100) is added to the Financial Code, to read:DIVISION 26. California Community Reinvestment Act100100. This division may be known and cited as the California Community Reinvestment Act.100102. For the purposes of this division, the following definitions apply:(a) Commissioner means the Commissioner of Financial Protection and Innovation.(b) Covered financial institution means all of the following that are subject to the licensing laws of this state:(1) A bank.(2) A credit union.(3) A residential mortgage lender.(4) A money transmitter that sells or issues stored value, as defined in Section 2003.(c) Fund means the Community Reinvestment Fund, as specified in subdivision (a) of Section 100128.100104. (a) A covered financial institution shall have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which its offices, branches, and other facilities are maintained and where it conducts substantial business, consistent with the safe and sound operation of the financial institution, and for credit unions, consistent with its common bond.(b) A covered financial institution that provides all or a majority of its products and services via mobile and other digital channels shall have a continuing and affirmative obligation to help meet the financial services needs of a deposit-based, lending-based, activities-based, or statewide assessment area, including low-income and moderate-income neighborhoods and neighborhoods of color, and areas where there is a lack of access to safe and affordable banking and lending services, consistent with the safe and sound operation of those financial institutions, including credit unions, consistent with its common bond.100106. (a) Before January 1, 2025, a covered financial institution shall conduct an initial assessment to determine the financial services needs of local communities.(b) The covered financial institution shall solicit public input to be considered in the assessment required by subdivision (a).(c) (1) Upon completion of the assessment required by subdivision (a), the covered financial institution shall deliver, in writing, the assessment and evidence of the covered financial institutions satisfaction of subdivision (b) to the commissioner.(2) The covered financial institution and the commissioner shall make the documents submitted pursuant to paragraph (1) available to the public for further comment on their respective internet websites.100108. (a) The commissioner shall assess the record of each covered financial institution in satisfying its obligation under Section 100104.(b) The commissioner shall conduct an assessment described by subdivision (a) for every covered financial institution for compliance with this division no less than once every three years.(c) The commissioner shall make public an assessment schedule at the beginning of each year and invite public comment related to a covered financial institutions compliance with this division.(d) To assist in carrying out this division, the commissioner shall adopt rules incorporating all federal regulations applicable to covered financial institutions, and the commissioner may make adjustments and exceptions thereto as the commissioner deems necessary.100110. To assist in conducting the assessments required by Section 100108, the commissioner shall adopt rules providing for consideration of the following factors, at a minimum, pertaining to whether covered financial institutions are meeting the financial services needs of local communities:(a) Activities to ascertain the financial services needs of the community, including communication with community members regarding the financial services provided.(b) Extent of marketing to make members of the community aware of the financial services and products offered.(c) The current distribution of the institutions branches among low-, moderate-, middle-, and upper-income geographies, and the institutions record of opening and closing branches, particularly branches located in rural or low- and moderate-income geographies and neighborhoods of color.(d) The origination of mortgage loans, including, but not limited to, home purchase, home improvement and rehabilitation loans, and other efforts to assist existing low-income and moderate-income residents to be able to remain in affordable housing in their neighborhoods.(e) The range of mortgage loan products offered, including, but not limited to, the offerings of government-backed loans or loans featuring low downpayments or other features designed to facilitate lending to low- and moderate-income borrowers.(f) For small business and farm lenders, the origination of loans to businesses and farms with gross annual revenues of one million dollars ($1,000,000) or less, particularly those in rural and low- and moderate-income neighborhoods.(g) The percentage of consumer and commercial loans applied for and originated by race and ethnicity, as reported by the borrower, and whether these consumer and commercial credit needs are being met.(h) Participation, including by making investments or grants, in community development and redevelopment programs, affordable housing creation and preservation, small business technical assistance programs, minority-owned depository institutions, community development financial institutions, tribal communities, projects and initiatives to increase access to high-speed internet and broadband services for underserved communities, green initiatives, housing counseling agencies, community land trusts, and other nonprofit organizations serving the affordable and fair housing, economic development, and wealth building needs of the community.(i) Efforts working with delinquent customers to facilitate a resolution of the delinquency.(j) For mortgage loans, the institutions efforts to work with delinquent borrowers to facilitate a resolution of the delinquency, including the number of loan modifications, the timeliness of such modifications, and the extent to which those modifications are effective in preventing subsequent defaults or foreclosures, in addition to data on numbers of delinquencies and foreclosures. If foreclosure is unavoidable, efforts to transfer property ownership to community land trusts, bona fide nonprofit housing organizations, or prospective owner occupants.(k) Origination of loans that show an undue concentration and a systematic pattern of lending resulting in the loss of affordable housing, deed restricted and rent controlled units, and displacement of residents, which shall result in a downgrade of the rating given pursuant to Section 100114.(l) The racial, ethnic, and gender diversity of the institutions board of directors and senior management.(m) For a covered financial institution that is a depository institution, the institutions use of reports from a specialty consumer reporting agency to determine eligibility for opening a bank account.(n) For covered financial institutions that are depository institutions, the number of open and active accounts that meet the Bank On National Account Standards issued by the Cities for Financial Empowerment Fund.(o) Evidence of discriminatory and prohibited practices, including violations of consumer protection laws, which shall result in a downgrade of the rating given pursuant to Section 100114.(p) An institutions record of meeting community needs, as informed by public comment.(q) Any other factors or requirements, as determined by the commissioner, which reasonably bear on the extent to which a covered financial institution is meeting the financial services needs of its entire community, including responsiveness to community needs as reflected by public comments.100112. (a) (1) The commissioner may at any time investigate into the affairs of, and examine the books, accounts, records, files, and offices, whether within or outside of this state, used in the business of a covered financial institution, for compliance with this division.(2) The commissioner and the commissioners duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a covered financial institution referred to in paragraph (1).(3) The examined officers and employees of a covered financial institution shall exhibit to the examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power.(b) The commissioner, in consultation with state and federal regulators with an appropriate regulatory interest, shall examine each covered financial institution for compliance with this division, as well as applicable fair lending laws, including, but not limited to, the Unruh Civil Rights Act, the federal Equal Credit Opportunity Act, the federal Fair Housing Act, the federal Home Mortgage Disclosure Act, and Section 1071 of the Dodd-Frank Act.(c) The commissioner may adopt rules with respect to the manner of examination, including the imposition of examination fees.(d) The commissioner may conduct any examinations under this division with other state or federal regulators and may enter into cooperative agreements relative to the coordination of or joint participation in any examinations, the amount and assessment of fees therefor or enforcement actions relevant thereto, and may accept reports of assessments by these regulators under those arrangements or agreements.100114. The commissioner shall assign one of the following ratings to describe how a covered financial institution is meeting its community financial services needs based on the assessment conducted under Section 100108:(a) Outstanding.(b) High satisfactory.(c) Satisfactory.(d) Needs to improve.(e) Substantial noncompliance.100116. Upon the completion of the assessment of a covered financial institution under Section 100108, the commissioner shall prepare a written evaluation of the covered financial institutions record of performance relative to this division. The written evaluation shall have a public section, which shall include no less information than would be disclosed in a written evaluation under the federal Community Reinvestment Act, and a summary of relevant Home Mortgage Disclosure Act data, including data related to applications, originations, and denials for conventional and government-insured mortgages based on the demographics of applicants and demographics of neighborhoods, and a confidential section. The commissioner shall give the covered financial institution an opportunity to comment on the evaluation, and then shall make the public section of the written evaluation publicly available on the internet websites of the department and covered financial institution, respectively. The written evaluation shall include, but not be limited to, all of the following:(a) The assessment factors utilized to determine the covered financial institutions descriptive rating.(b) The commissioners conclusions with respect to each assessment factor.(c) A discussion of the facts supporting the conclusions made under subdivision (b).(d) The covered financial institutions descriptive rating and the basis therefor.(e) A summary of public comments.100118. Notwithstanding any other section in this division, the commissioner may establish, by rule, an alternative examination procedure for any covered financial institution that, as of the most recent examination, has been assigned a rating of outstanding or high satisfactory for its record of performance in meeting its community financial services needs.100120. A covered financial institution that receives a rating of needs to improve or substantial noncompliance shall submit a plan within 180 days of receiving the rating to the commissioner describing the covered financial institutions efforts to improve its performance in helping to meet the financial needs of local communities and the results of those efforts. The plan shall be subject to public comment and updated quarterly until the covered financial institution receives a rating of satisfactory or better.100122. A covered financial institution shall provide, in the public lobby of each of its offices, if any, and on its internet website, a public notice that is substantially similar to the following:State of California Community Reinvestment NoticeThe California Department of Financial Protection and Innovation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.100124. In considering an application for the establishment of a branch, office, or other facility, the relocation of a main office, branch, office, or other facility, a license renewal, change in control of a covered financial institution, or a merger or consolidation with or the acquisition of assets or assumption of liabilities of any covered financial institution, out-of-state bank, credit union, or residential mortgage licensee, national bank or credit union, or foreign financial institution, the commissioner shall consider, but not be limited to considering, the record of performance of the covered financial institution and its parent company, including all subsidiaries and affiliates thereof, relative to this division. The record of performance of the covered financial institution may be the basis for the denial of an application.100126. The commissioner shall prepare and submit annually to the Treasurer a list of covered financial institutions which have received a rating of needs to improve or substantial noncompliance pursuant to this division. Notwithstanding any other law, a covered financial institution with a rating of needs to improve or substantial noncompliance shall not receive state funds for deposit or be awarded a state contract to provide financial services.100128. (a) The Community Reinvestment Fund is hereby established within the State Treasury. Moneys in the fund shall be available, upon appropriation by the Legislature, to the commissioner for purposes of administering this division.(b) (1) The commissioner may issue an administrative penalty of up to one hundred thousand dollars ($100,000) to a covered financial institution that regularly fails to meet its obligations prescribed by Section 100104, including, but not limited to, a covered financial institution that receives a rating of substantial noncompliance in any two successive examinations.(2) All moneys received in payment of administrative penalties under this section shall be deposited in the fund.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Division 26 (commencing with Section 100100) is added to the Financial Code, to read:DIVISION 26. California Community Reinvestment Act100100. This division may be known and cited as the California Community Reinvestment Act.100102. For the purposes of this division, the following definitions apply:(a) Commissioner means the Commissioner of Financial Protection and Innovation.(b) Covered financial institution means all of the following that are subject to the licensing laws of this state:(1) A bank.(2) A credit union.(3) A residential mortgage lender.(4) A money transmitter that sells or issues stored value, as defined in Section 2003.(c) Fund means the Community Reinvestment Fund, as specified in subdivision (a) of Section 100128.100104. (a) A covered financial institution shall have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which its offices, branches, and other facilities are maintained and where it conducts substantial business, consistent with the safe and sound operation of the financial institution, and for credit unions, consistent with its common bond.(b) A covered financial institution that provides all or a majority of its products and services via mobile and other digital channels shall have a continuing and affirmative obligation to help meet the financial services needs of a deposit-based, lending-based, activities-based, or statewide assessment area, including low-income and moderate-income neighborhoods and neighborhoods of color, and areas where there is a lack of access to safe and affordable banking and lending services, consistent with the safe and sound operation of those financial institutions, including credit unions, consistent with its common bond.100106. (a) Before January 1, 2025, a covered financial institution shall conduct an initial assessment to determine the financial services needs of local communities.(b) The covered financial institution shall solicit public input to be considered in the assessment required by subdivision (a).(c) (1) Upon completion of the assessment required by subdivision (a), the covered financial institution shall deliver, in writing, the assessment and evidence of the covered financial institutions satisfaction of subdivision (b) to the commissioner.(2) The covered financial institution and the commissioner shall make the documents submitted pursuant to paragraph (1) available to the public for further comment on their respective internet websites.100108. (a) The commissioner shall assess the record of each covered financial institution in satisfying its obligation under Section 100104.(b) The commissioner shall conduct an assessment described by subdivision (a) for every covered financial institution for compliance with this division no less than once every three years.(c) The commissioner shall make public an assessment schedule at the beginning of each year and invite public comment related to a covered financial institutions compliance with this division.(d) To assist in carrying out this division, the commissioner shall adopt rules incorporating all federal regulations applicable to covered financial institutions, and the commissioner may make adjustments and exceptions thereto as the commissioner deems necessary.100110. To assist in conducting the assessments required by Section 100108, the commissioner shall adopt rules providing for consideration of the following factors, at a minimum, pertaining to whether covered financial institutions are meeting the financial services needs of local communities:(a) Activities to ascertain the financial services needs of the community, including communication with community members regarding the financial services provided.(b) Extent of marketing to make members of the community aware of the financial services and products offered.(c) The current distribution of the institutions branches among low-, moderate-, middle-, and upper-income geographies, and the institutions record of opening and closing branches, particularly branches located in rural or low- and moderate-income geographies and neighborhoods of color.(d) The origination of mortgage loans, including, but not limited to, home purchase, home improvement and rehabilitation loans, and other efforts to assist existing low-income and moderate-income residents to be able to remain in affordable housing in their neighborhoods.(e) The range of mortgage loan products offered, including, but not limited to, the offerings of government-backed loans or loans featuring low downpayments or other features designed to facilitate lending to low- and moderate-income borrowers.(f) For small business and farm lenders, the origination of loans to businesses and farms with gross annual revenues of one million dollars ($1,000,000) or less, particularly those in rural and low- and moderate-income neighborhoods.(g) The percentage of consumer and commercial loans applied for and originated by race and ethnicity, as reported by the borrower, and whether these consumer and commercial credit needs are being met.(h) Participation, including by making investments or grants, in community development and redevelopment programs, affordable housing creation and preservation, small business technical assistance programs, minority-owned depository institutions, community development financial institutions, tribal communities, projects and initiatives to increase access to high-speed internet and broadband services for underserved communities, green initiatives, housing counseling agencies, community land trusts, and other nonprofit organizations serving the affordable and fair housing, economic development, and wealth building needs of the community.(i) Efforts working with delinquent customers to facilitate a resolution of the delinquency.(j) For mortgage loans, the institutions efforts to work with delinquent borrowers to facilitate a resolution of the delinquency, including the number of loan modifications, the timeliness of such modifications, and the extent to which those modifications are effective in preventing subsequent defaults or foreclosures, in addition to data on numbers of delinquencies and foreclosures. If foreclosure is unavoidable, efforts to transfer property ownership to community land trusts, bona fide nonprofit housing organizations, or prospective owner occupants.(k) Origination of loans that show an undue concentration and a systematic pattern of lending resulting in the loss of affordable housing, deed restricted and rent controlled units, and displacement of residents, which shall result in a downgrade of the rating given pursuant to Section 100114.(l) The racial, ethnic, and gender diversity of the institutions board of directors and senior management.(m) For a covered financial institution that is a depository institution, the institutions use of reports from a specialty consumer reporting agency to determine eligibility for opening a bank account.(n) For covered financial institutions that are depository institutions, the number of open and active accounts that meet the Bank On National Account Standards issued by the Cities for Financial Empowerment Fund.(o) Evidence of discriminatory and prohibited practices, including violations of consumer protection laws, which shall result in a downgrade of the rating given pursuant to Section 100114.(p) An institutions record of meeting community needs, as informed by public comment.(q) Any other factors or requirements, as determined by the commissioner, which reasonably bear on the extent to which a covered financial institution is meeting the financial services needs of its entire community, including responsiveness to community needs as reflected by public comments.100112. (a) (1) The commissioner may at any time investigate into the affairs of, and examine the books, accounts, records, files, and offices, whether within or outside of this state, used in the business of a covered financial institution, for compliance with this division.(2) The commissioner and the commissioners duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a covered financial institution referred to in paragraph (1).(3) The examined officers and employees of a covered financial institution shall exhibit to the examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power.(b) The commissioner, in consultation with state and federal regulators with an appropriate regulatory interest, shall examine each covered financial institution for compliance with this division, as well as applicable fair lending laws, including, but not limited to, the Unruh Civil Rights Act, the federal Equal Credit Opportunity Act, the federal Fair Housing Act, the federal Home Mortgage Disclosure Act, and Section 1071 of the Dodd-Frank Act.(c) The commissioner may adopt rules with respect to the manner of examination, including the imposition of examination fees.(d) The commissioner may conduct any examinations under this division with other state or federal regulators and may enter into cooperative agreements relative to the coordination of or joint participation in any examinations, the amount and assessment of fees therefor or enforcement actions relevant thereto, and may accept reports of assessments by these regulators under those arrangements or agreements.100114. The commissioner shall assign one of the following ratings to describe how a covered financial institution is meeting its community financial services needs based on the assessment conducted under Section 100108:(a) Outstanding.(b) High satisfactory.(c) Satisfactory.(d) Needs to improve.(e) Substantial noncompliance.100116. Upon the completion of the assessment of a covered financial institution under Section 100108, the commissioner shall prepare a written evaluation of the covered financial institutions record of performance relative to this division. The written evaluation shall have a public section, which shall include no less information than would be disclosed in a written evaluation under the federal Community Reinvestment Act, and a summary of relevant Home Mortgage Disclosure Act data, including data related to applications, originations, and denials for conventional and government-insured mortgages based on the demographics of applicants and demographics of neighborhoods, and a confidential section. The commissioner shall give the covered financial institution an opportunity to comment on the evaluation, and then shall make the public section of the written evaluation publicly available on the internet websites of the department and covered financial institution, respectively. The written evaluation shall include, but not be limited to, all of the following:(a) The assessment factors utilized to determine the covered financial institutions descriptive rating.(b) The commissioners conclusions with respect to each assessment factor.(c) A discussion of the facts supporting the conclusions made under subdivision (b).(d) The covered financial institutions descriptive rating and the basis therefor.(e) A summary of public comments.100118. Notwithstanding any other section in this division, the commissioner may establish, by rule, an alternative examination procedure for any covered financial institution that, as of the most recent examination, has been assigned a rating of outstanding or high satisfactory for its record of performance in meeting its community financial services needs.100120. A covered financial institution that receives a rating of needs to improve or substantial noncompliance shall submit a plan within 180 days of receiving the rating to the commissioner describing the covered financial institutions efforts to improve its performance in helping to meet the financial needs of local communities and the results of those efforts. The plan shall be subject to public comment and updated quarterly until the covered financial institution receives a rating of satisfactory or better.100122. A covered financial institution shall provide, in the public lobby of each of its offices, if any, and on its internet website, a public notice that is substantially similar to the following:State of California Community Reinvestment NoticeThe California Department of Financial Protection and Innovation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.100124. In considering an application for the establishment of a branch, office, or other facility, the relocation of a main office, branch, office, or other facility, a license renewal, change in control of a covered financial institution, or a merger or consolidation with or the acquisition of assets or assumption of liabilities of any covered financial institution, out-of-state bank, credit union, or residential mortgage licensee, national bank or credit union, or foreign financial institution, the commissioner shall consider, but not be limited to considering, the record of performance of the covered financial institution and its parent company, including all subsidiaries and affiliates thereof, relative to this division. The record of performance of the covered financial institution may be the basis for the denial of an application.100126. The commissioner shall prepare and submit annually to the Treasurer a list of covered financial institutions which have received a rating of needs to improve or substantial noncompliance pursuant to this division. Notwithstanding any other law, a covered financial institution with a rating of needs to improve or substantial noncompliance shall not receive state funds for deposit or be awarded a state contract to provide financial services.100128. (a) The Community Reinvestment Fund is hereby established within the State Treasury. Moneys in the fund shall be available, upon appropriation by the Legislature, to the commissioner for purposes of administering this division.(b) (1) The commissioner may issue an administrative penalty of up to one hundred thousand dollars ($100,000) to a covered financial institution that regularly fails to meet its obligations prescribed by Section 100104, including, but not limited to, a covered financial institution that receives a rating of substantial noncompliance in any two successive examinations.(2) All moneys received in payment of administrative penalties under this section shall be deposited in the fund.
SECTION 1. Division 26 (commencing with Section 100100) is added to the Financial Code, to read:
### SECTION 1.
DIVISION 26. California Community Reinvestment Act100100. This division may be known and cited as the California Community Reinvestment Act.100102. For the purposes of this division, the following definitions apply:(a) Commissioner means the Commissioner of Financial Protection and Innovation.(b) Covered financial institution means all of the following that are subject to the licensing laws of this state:(1) A bank.(2) A credit union.(3) A residential mortgage lender.(4) A money transmitter that sells or issues stored value, as defined in Section 2003.(c) Fund means the Community Reinvestment Fund, as specified in subdivision (a) of Section 100128.100104. (a) A covered financial institution shall have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which its offices, branches, and other facilities are maintained and where it conducts substantial business, consistent with the safe and sound operation of the financial institution, and for credit unions, consistent with its common bond.(b) A covered financial institution that provides all or a majority of its products and services via mobile and other digital channels shall have a continuing and affirmative obligation to help meet the financial services needs of a deposit-based, lending-based, activities-based, or statewide assessment area, including low-income and moderate-income neighborhoods and neighborhoods of color, and areas where there is a lack of access to safe and affordable banking and lending services, consistent with the safe and sound operation of those financial institutions, including credit unions, consistent with its common bond.100106. (a) Before January 1, 2025, a covered financial institution shall conduct an initial assessment to determine the financial services needs of local communities.(b) The covered financial institution shall solicit public input to be considered in the assessment required by subdivision (a).(c) (1) Upon completion of the assessment required by subdivision (a), the covered financial institution shall deliver, in writing, the assessment and evidence of the covered financial institutions satisfaction of subdivision (b) to the commissioner.(2) The covered financial institution and the commissioner shall make the documents submitted pursuant to paragraph (1) available to the public for further comment on their respective internet websites.100108. (a) The commissioner shall assess the record of each covered financial institution in satisfying its obligation under Section 100104.(b) The commissioner shall conduct an assessment described by subdivision (a) for every covered financial institution for compliance with this division no less than once every three years.(c) The commissioner shall make public an assessment schedule at the beginning of each year and invite public comment related to a covered financial institutions compliance with this division.(d) To assist in carrying out this division, the commissioner shall adopt rules incorporating all federal regulations applicable to covered financial institutions, and the commissioner may make adjustments and exceptions thereto as the commissioner deems necessary.100110. To assist in conducting the assessments required by Section 100108, the commissioner shall adopt rules providing for consideration of the following factors, at a minimum, pertaining to whether covered financial institutions are meeting the financial services needs of local communities:(a) Activities to ascertain the financial services needs of the community, including communication with community members regarding the financial services provided.(b) Extent of marketing to make members of the community aware of the financial services and products offered.(c) The current distribution of the institutions branches among low-, moderate-, middle-, and upper-income geographies, and the institutions record of opening and closing branches, particularly branches located in rural or low- and moderate-income geographies and neighborhoods of color.(d) The origination of mortgage loans, including, but not limited to, home purchase, home improvement and rehabilitation loans, and other efforts to assist existing low-income and moderate-income residents to be able to remain in affordable housing in their neighborhoods.(e) The range of mortgage loan products offered, including, but not limited to, the offerings of government-backed loans or loans featuring low downpayments or other features designed to facilitate lending to low- and moderate-income borrowers.(f) For small business and farm lenders, the origination of loans to businesses and farms with gross annual revenues of one million dollars ($1,000,000) or less, particularly those in rural and low- and moderate-income neighborhoods.(g) The percentage of consumer and commercial loans applied for and originated by race and ethnicity, as reported by the borrower, and whether these consumer and commercial credit needs are being met.(h) Participation, including by making investments or grants, in community development and redevelopment programs, affordable housing creation and preservation, small business technical assistance programs, minority-owned depository institutions, community development financial institutions, tribal communities, projects and initiatives to increase access to high-speed internet and broadband services for underserved communities, green initiatives, housing counseling agencies, community land trusts, and other nonprofit organizations serving the affordable and fair housing, economic development, and wealth building needs of the community.(i) Efforts working with delinquent customers to facilitate a resolution of the delinquency.(j) For mortgage loans, the institutions efforts to work with delinquent borrowers to facilitate a resolution of the delinquency, including the number of loan modifications, the timeliness of such modifications, and the extent to which those modifications are effective in preventing subsequent defaults or foreclosures, in addition to data on numbers of delinquencies and foreclosures. If foreclosure is unavoidable, efforts to transfer property ownership to community land trusts, bona fide nonprofit housing organizations, or prospective owner occupants.(k) Origination of loans that show an undue concentration and a systematic pattern of lending resulting in the loss of affordable housing, deed restricted and rent controlled units, and displacement of residents, which shall result in a downgrade of the rating given pursuant to Section 100114.(l) The racial, ethnic, and gender diversity of the institutions board of directors and senior management.(m) For a covered financial institution that is a depository institution, the institutions use of reports from a specialty consumer reporting agency to determine eligibility for opening a bank account.(n) For covered financial institutions that are depository institutions, the number of open and active accounts that meet the Bank On National Account Standards issued by the Cities for Financial Empowerment Fund.(o) Evidence of discriminatory and prohibited practices, including violations of consumer protection laws, which shall result in a downgrade of the rating given pursuant to Section 100114.(p) An institutions record of meeting community needs, as informed by public comment.(q) Any other factors or requirements, as determined by the commissioner, which reasonably bear on the extent to which a covered financial institution is meeting the financial services needs of its entire community, including responsiveness to community needs as reflected by public comments.100112. (a) (1) The commissioner may at any time investigate into the affairs of, and examine the books, accounts, records, files, and offices, whether within or outside of this state, used in the business of a covered financial institution, for compliance with this division.(2) The commissioner and the commissioners duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a covered financial institution referred to in paragraph (1).(3) The examined officers and employees of a covered financial institution shall exhibit to the examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power.(b) The commissioner, in consultation with state and federal regulators with an appropriate regulatory interest, shall examine each covered financial institution for compliance with this division, as well as applicable fair lending laws, including, but not limited to, the Unruh Civil Rights Act, the federal Equal Credit Opportunity Act, the federal Fair Housing Act, the federal Home Mortgage Disclosure Act, and Section 1071 of the Dodd-Frank Act.(c) The commissioner may adopt rules with respect to the manner of examination, including the imposition of examination fees.(d) The commissioner may conduct any examinations under this division with other state or federal regulators and may enter into cooperative agreements relative to the coordination of or joint participation in any examinations, the amount and assessment of fees therefor or enforcement actions relevant thereto, and may accept reports of assessments by these regulators under those arrangements or agreements.100114. The commissioner shall assign one of the following ratings to describe how a covered financial institution is meeting its community financial services needs based on the assessment conducted under Section 100108:(a) Outstanding.(b) High satisfactory.(c) Satisfactory.(d) Needs to improve.(e) Substantial noncompliance.100116. Upon the completion of the assessment of a covered financial institution under Section 100108, the commissioner shall prepare a written evaluation of the covered financial institutions record of performance relative to this division. The written evaluation shall have a public section, which shall include no less information than would be disclosed in a written evaluation under the federal Community Reinvestment Act, and a summary of relevant Home Mortgage Disclosure Act data, including data related to applications, originations, and denials for conventional and government-insured mortgages based on the demographics of applicants and demographics of neighborhoods, and a confidential section. The commissioner shall give the covered financial institution an opportunity to comment on the evaluation, and then shall make the public section of the written evaluation publicly available on the internet websites of the department and covered financial institution, respectively. The written evaluation shall include, but not be limited to, all of the following:(a) The assessment factors utilized to determine the covered financial institutions descriptive rating.(b) The commissioners conclusions with respect to each assessment factor.(c) A discussion of the facts supporting the conclusions made under subdivision (b).(d) The covered financial institutions descriptive rating and the basis therefor.(e) A summary of public comments.100118. Notwithstanding any other section in this division, the commissioner may establish, by rule, an alternative examination procedure for any covered financial institution that, as of the most recent examination, has been assigned a rating of outstanding or high satisfactory for its record of performance in meeting its community financial services needs.100120. A covered financial institution that receives a rating of needs to improve or substantial noncompliance shall submit a plan within 180 days of receiving the rating to the commissioner describing the covered financial institutions efforts to improve its performance in helping to meet the financial needs of local communities and the results of those efforts. The plan shall be subject to public comment and updated quarterly until the covered financial institution receives a rating of satisfactory or better.100122. A covered financial institution shall provide, in the public lobby of each of its offices, if any, and on its internet website, a public notice that is substantially similar to the following:State of California Community Reinvestment NoticeThe California Department of Financial Protection and Innovation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.100124. In considering an application for the establishment of a branch, office, or other facility, the relocation of a main office, branch, office, or other facility, a license renewal, change in control of a covered financial institution, or a merger or consolidation with or the acquisition of assets or assumption of liabilities of any covered financial institution, out-of-state bank, credit union, or residential mortgage licensee, national bank or credit union, or foreign financial institution, the commissioner shall consider, but not be limited to considering, the record of performance of the covered financial institution and its parent company, including all subsidiaries and affiliates thereof, relative to this division. The record of performance of the covered financial institution may be the basis for the denial of an application.100126. The commissioner shall prepare and submit annually to the Treasurer a list of covered financial institutions which have received a rating of needs to improve or substantial noncompliance pursuant to this division. Notwithstanding any other law, a covered financial institution with a rating of needs to improve or substantial noncompliance shall not receive state funds for deposit or be awarded a state contract to provide financial services.100128. (a) The Community Reinvestment Fund is hereby established within the State Treasury. Moneys in the fund shall be available, upon appropriation by the Legislature, to the commissioner for purposes of administering this division.(b) (1) The commissioner may issue an administrative penalty of up to one hundred thousand dollars ($100,000) to a covered financial institution that regularly fails to meet its obligations prescribed by Section 100104, including, but not limited to, a covered financial institution that receives a rating of substantial noncompliance in any two successive examinations.(2) All moneys received in payment of administrative penalties under this section shall be deposited in the fund.
DIVISION 26. California Community Reinvestment Act100100. This division may be known and cited as the California Community Reinvestment Act.100102. For the purposes of this division, the following definitions apply:(a) Commissioner means the Commissioner of Financial Protection and Innovation.(b) Covered financial institution means all of the following that are subject to the licensing laws of this state:(1) A bank.(2) A credit union.(3) A residential mortgage lender.(4) A money transmitter that sells or issues stored value, as defined in Section 2003.(c) Fund means the Community Reinvestment Fund, as specified in subdivision (a) of Section 100128.100104. (a) A covered financial institution shall have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which its offices, branches, and other facilities are maintained and where it conducts substantial business, consistent with the safe and sound operation of the financial institution, and for credit unions, consistent with its common bond.(b) A covered financial institution that provides all or a majority of its products and services via mobile and other digital channels shall have a continuing and affirmative obligation to help meet the financial services needs of a deposit-based, lending-based, activities-based, or statewide assessment area, including low-income and moderate-income neighborhoods and neighborhoods of color, and areas where there is a lack of access to safe and affordable banking and lending services, consistent with the safe and sound operation of those financial institutions, including credit unions, consistent with its common bond.100106. (a) Before January 1, 2025, a covered financial institution shall conduct an initial assessment to determine the financial services needs of local communities.(b) The covered financial institution shall solicit public input to be considered in the assessment required by subdivision (a).(c) (1) Upon completion of the assessment required by subdivision (a), the covered financial institution shall deliver, in writing, the assessment and evidence of the covered financial institutions satisfaction of subdivision (b) to the commissioner.(2) The covered financial institution and the commissioner shall make the documents submitted pursuant to paragraph (1) available to the public for further comment on their respective internet websites.100108. (a) The commissioner shall assess the record of each covered financial institution in satisfying its obligation under Section 100104.(b) The commissioner shall conduct an assessment described by subdivision (a) for every covered financial institution for compliance with this division no less than once every three years.(c) The commissioner shall make public an assessment schedule at the beginning of each year and invite public comment related to a covered financial institutions compliance with this division.(d) To assist in carrying out this division, the commissioner shall adopt rules incorporating all federal regulations applicable to covered financial institutions, and the commissioner may make adjustments and exceptions thereto as the commissioner deems necessary.100110. To assist in conducting the assessments required by Section 100108, the commissioner shall adopt rules providing for consideration of the following factors, at a minimum, pertaining to whether covered financial institutions are meeting the financial services needs of local communities:(a) Activities to ascertain the financial services needs of the community, including communication with community members regarding the financial services provided.(b) Extent of marketing to make members of the community aware of the financial services and products offered.(c) The current distribution of the institutions branches among low-, moderate-, middle-, and upper-income geographies, and the institutions record of opening and closing branches, particularly branches located in rural or low- and moderate-income geographies and neighborhoods of color.(d) The origination of mortgage loans, including, but not limited to, home purchase, home improvement and rehabilitation loans, and other efforts to assist existing low-income and moderate-income residents to be able to remain in affordable housing in their neighborhoods.(e) The range of mortgage loan products offered, including, but not limited to, the offerings of government-backed loans or loans featuring low downpayments or other features designed to facilitate lending to low- and moderate-income borrowers.(f) For small business and farm lenders, the origination of loans to businesses and farms with gross annual revenues of one million dollars ($1,000,000) or less, particularly those in rural and low- and moderate-income neighborhoods.(g) The percentage of consumer and commercial loans applied for and originated by race and ethnicity, as reported by the borrower, and whether these consumer and commercial credit needs are being met.(h) Participation, including by making investments or grants, in community development and redevelopment programs, affordable housing creation and preservation, small business technical assistance programs, minority-owned depository institutions, community development financial institutions, tribal communities, projects and initiatives to increase access to high-speed internet and broadband services for underserved communities, green initiatives, housing counseling agencies, community land trusts, and other nonprofit organizations serving the affordable and fair housing, economic development, and wealth building needs of the community.(i) Efforts working with delinquent customers to facilitate a resolution of the delinquency.(j) For mortgage loans, the institutions efforts to work with delinquent borrowers to facilitate a resolution of the delinquency, including the number of loan modifications, the timeliness of such modifications, and the extent to which those modifications are effective in preventing subsequent defaults or foreclosures, in addition to data on numbers of delinquencies and foreclosures. If foreclosure is unavoidable, efforts to transfer property ownership to community land trusts, bona fide nonprofit housing organizations, or prospective owner occupants.(k) Origination of loans that show an undue concentration and a systematic pattern of lending resulting in the loss of affordable housing, deed restricted and rent controlled units, and displacement of residents, which shall result in a downgrade of the rating given pursuant to Section 100114.(l) The racial, ethnic, and gender diversity of the institutions board of directors and senior management.(m) For a covered financial institution that is a depository institution, the institutions use of reports from a specialty consumer reporting agency to determine eligibility for opening a bank account.(n) For covered financial institutions that are depository institutions, the number of open and active accounts that meet the Bank On National Account Standards issued by the Cities for Financial Empowerment Fund.(o) Evidence of discriminatory and prohibited practices, including violations of consumer protection laws, which shall result in a downgrade of the rating given pursuant to Section 100114.(p) An institutions record of meeting community needs, as informed by public comment.(q) Any other factors or requirements, as determined by the commissioner, which reasonably bear on the extent to which a covered financial institution is meeting the financial services needs of its entire community, including responsiveness to community needs as reflected by public comments.100112. (a) (1) The commissioner may at any time investigate into the affairs of, and examine the books, accounts, records, files, and offices, whether within or outside of this state, used in the business of a covered financial institution, for compliance with this division.(2) The commissioner and the commissioners duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a covered financial institution referred to in paragraph (1).(3) The examined officers and employees of a covered financial institution shall exhibit to the examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power.(b) The commissioner, in consultation with state and federal regulators with an appropriate regulatory interest, shall examine each covered financial institution for compliance with this division, as well as applicable fair lending laws, including, but not limited to, the Unruh Civil Rights Act, the federal Equal Credit Opportunity Act, the federal Fair Housing Act, the federal Home Mortgage Disclosure Act, and Section 1071 of the Dodd-Frank Act.(c) The commissioner may adopt rules with respect to the manner of examination, including the imposition of examination fees.(d) The commissioner may conduct any examinations under this division with other state or federal regulators and may enter into cooperative agreements relative to the coordination of or joint participation in any examinations, the amount and assessment of fees therefor or enforcement actions relevant thereto, and may accept reports of assessments by these regulators under those arrangements or agreements.100114. The commissioner shall assign one of the following ratings to describe how a covered financial institution is meeting its community financial services needs based on the assessment conducted under Section 100108:(a) Outstanding.(b) High satisfactory.(c) Satisfactory.(d) Needs to improve.(e) Substantial noncompliance.100116. Upon the completion of the assessment of a covered financial institution under Section 100108, the commissioner shall prepare a written evaluation of the covered financial institutions record of performance relative to this division. The written evaluation shall have a public section, which shall include no less information than would be disclosed in a written evaluation under the federal Community Reinvestment Act, and a summary of relevant Home Mortgage Disclosure Act data, including data related to applications, originations, and denials for conventional and government-insured mortgages based on the demographics of applicants and demographics of neighborhoods, and a confidential section. The commissioner shall give the covered financial institution an opportunity to comment on the evaluation, and then shall make the public section of the written evaluation publicly available on the internet websites of the department and covered financial institution, respectively. The written evaluation shall include, but not be limited to, all of the following:(a) The assessment factors utilized to determine the covered financial institutions descriptive rating.(b) The commissioners conclusions with respect to each assessment factor.(c) A discussion of the facts supporting the conclusions made under subdivision (b).(d) The covered financial institutions descriptive rating and the basis therefor.(e) A summary of public comments.100118. Notwithstanding any other section in this division, the commissioner may establish, by rule, an alternative examination procedure for any covered financial institution that, as of the most recent examination, has been assigned a rating of outstanding or high satisfactory for its record of performance in meeting its community financial services needs.100120. A covered financial institution that receives a rating of needs to improve or substantial noncompliance shall submit a plan within 180 days of receiving the rating to the commissioner describing the covered financial institutions efforts to improve its performance in helping to meet the financial needs of local communities and the results of those efforts. The plan shall be subject to public comment and updated quarterly until the covered financial institution receives a rating of satisfactory or better.100122. A covered financial institution shall provide, in the public lobby of each of its offices, if any, and on its internet website, a public notice that is substantially similar to the following:State of California Community Reinvestment NoticeThe California Department of Financial Protection and Innovation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.100124. In considering an application for the establishment of a branch, office, or other facility, the relocation of a main office, branch, office, or other facility, a license renewal, change in control of a covered financial institution, or a merger or consolidation with or the acquisition of assets or assumption of liabilities of any covered financial institution, out-of-state bank, credit union, or residential mortgage licensee, national bank or credit union, or foreign financial institution, the commissioner shall consider, but not be limited to considering, the record of performance of the covered financial institution and its parent company, including all subsidiaries and affiliates thereof, relative to this division. The record of performance of the covered financial institution may be the basis for the denial of an application.100126. The commissioner shall prepare and submit annually to the Treasurer a list of covered financial institutions which have received a rating of needs to improve or substantial noncompliance pursuant to this division. Notwithstanding any other law, a covered financial institution with a rating of needs to improve or substantial noncompliance shall not receive state funds for deposit or be awarded a state contract to provide financial services.100128. (a) The Community Reinvestment Fund is hereby established within the State Treasury. Moneys in the fund shall be available, upon appropriation by the Legislature, to the commissioner for purposes of administering this division.(b) (1) The commissioner may issue an administrative penalty of up to one hundred thousand dollars ($100,000) to a covered financial institution that regularly fails to meet its obligations prescribed by Section 100104, including, but not limited to, a covered financial institution that receives a rating of substantial noncompliance in any two successive examinations.(2) All moneys received in payment of administrative penalties under this section shall be deposited in the fund.
DIVISION 26. California Community Reinvestment Act
DIVISION 26. California Community Reinvestment Act
100100. This division may be known and cited as the California Community Reinvestment Act.
100100. This division may be known and cited as the California Community Reinvestment Act.
100102. For the purposes of this division, the following definitions apply:(a) Commissioner means the Commissioner of Financial Protection and Innovation.(b) Covered financial institution means all of the following that are subject to the licensing laws of this state:(1) A bank.(2) A credit union.(3) A residential mortgage lender.(4) A money transmitter that sells or issues stored value, as defined in Section 2003.(c) Fund means the Community Reinvestment Fund, as specified in subdivision (a) of Section 100128.
100102. For the purposes of this division, the following definitions apply:
(a) Commissioner means the Commissioner of Financial Protection and Innovation.
(b) Covered financial institution means all of the following that are subject to the licensing laws of this state:
(1) A bank.
(2) A credit union.
(3) A residential mortgage lender.
(4) A money transmitter that sells or issues stored value, as defined in Section 2003.
(c) Fund means the Community Reinvestment Fund, as specified in subdivision (a) of Section 100128.
100104. (a) A covered financial institution shall have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which its offices, branches, and other facilities are maintained and where it conducts substantial business, consistent with the safe and sound operation of the financial institution, and for credit unions, consistent with its common bond.(b) A covered financial institution that provides all or a majority of its products and services via mobile and other digital channels shall have a continuing and affirmative obligation to help meet the financial services needs of a deposit-based, lending-based, activities-based, or statewide assessment area, including low-income and moderate-income neighborhoods and neighborhoods of color, and areas where there is a lack of access to safe and affordable banking and lending services, consistent with the safe and sound operation of those financial institutions, including credit unions, consistent with its common bond.
100104. (a) A covered financial institution shall have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which its offices, branches, and other facilities are maintained and where it conducts substantial business, consistent with the safe and sound operation of the financial institution, and for credit unions, consistent with its common bond.
(b) A covered financial institution that provides all or a majority of its products and services via mobile and other digital channels shall have a continuing and affirmative obligation to help meet the financial services needs of a deposit-based, lending-based, activities-based, or statewide assessment area, including low-income and moderate-income neighborhoods and neighborhoods of color, and areas where there is a lack of access to safe and affordable banking and lending services, consistent with the safe and sound operation of those financial institutions, including credit unions, consistent with its common bond.
100106. (a) Before January 1, 2025, a covered financial institution shall conduct an initial assessment to determine the financial services needs of local communities.(b) The covered financial institution shall solicit public input to be considered in the assessment required by subdivision (a).(c) (1) Upon completion of the assessment required by subdivision (a), the covered financial institution shall deliver, in writing, the assessment and evidence of the covered financial institutions satisfaction of subdivision (b) to the commissioner.(2) The covered financial institution and the commissioner shall make the documents submitted pursuant to paragraph (1) available to the public for further comment on their respective internet websites.
100106. (a) Before January 1, 2025, a covered financial institution shall conduct an initial assessment to determine the financial services needs of local communities.
(b) The covered financial institution shall solicit public input to be considered in the assessment required by subdivision (a).
(c) (1) Upon completion of the assessment required by subdivision (a), the covered financial institution shall deliver, in writing, the assessment and evidence of the covered financial institutions satisfaction of subdivision (b) to the commissioner.
(2) The covered financial institution and the commissioner shall make the documents submitted pursuant to paragraph (1) available to the public for further comment on their respective internet websites.
100108. (a) The commissioner shall assess the record of each covered financial institution in satisfying its obligation under Section 100104.(b) The commissioner shall conduct an assessment described by subdivision (a) for every covered financial institution for compliance with this division no less than once every three years.(c) The commissioner shall make public an assessment schedule at the beginning of each year and invite public comment related to a covered financial institutions compliance with this division.(d) To assist in carrying out this division, the commissioner shall adopt rules incorporating all federal regulations applicable to covered financial institutions, and the commissioner may make adjustments and exceptions thereto as the commissioner deems necessary.
100108. (a) The commissioner shall assess the record of each covered financial institution in satisfying its obligation under Section 100104.
(b) The commissioner shall conduct an assessment described by subdivision (a) for every covered financial institution for compliance with this division no less than once every three years.
(c) The commissioner shall make public an assessment schedule at the beginning of each year and invite public comment related to a covered financial institutions compliance with this division.
(d) To assist in carrying out this division, the commissioner shall adopt rules incorporating all federal regulations applicable to covered financial institutions, and the commissioner may make adjustments and exceptions thereto as the commissioner deems necessary.
100110. To assist in conducting the assessments required by Section 100108, the commissioner shall adopt rules providing for consideration of the following factors, at a minimum, pertaining to whether covered financial institutions are meeting the financial services needs of local communities:(a) Activities to ascertain the financial services needs of the community, including communication with community members regarding the financial services provided.(b) Extent of marketing to make members of the community aware of the financial services and products offered.(c) The current distribution of the institutions branches among low-, moderate-, middle-, and upper-income geographies, and the institutions record of opening and closing branches, particularly branches located in rural or low- and moderate-income geographies and neighborhoods of color.(d) The origination of mortgage loans, including, but not limited to, home purchase, home improvement and rehabilitation loans, and other efforts to assist existing low-income and moderate-income residents to be able to remain in affordable housing in their neighborhoods.(e) The range of mortgage loan products offered, including, but not limited to, the offerings of government-backed loans or loans featuring low downpayments or other features designed to facilitate lending to low- and moderate-income borrowers.(f) For small business and farm lenders, the origination of loans to businesses and farms with gross annual revenues of one million dollars ($1,000,000) or less, particularly those in rural and low- and moderate-income neighborhoods.(g) The percentage of consumer and commercial loans applied for and originated by race and ethnicity, as reported by the borrower, and whether these consumer and commercial credit needs are being met.(h) Participation, including by making investments or grants, in community development and redevelopment programs, affordable housing creation and preservation, small business technical assistance programs, minority-owned depository institutions, community development financial institutions, tribal communities, projects and initiatives to increase access to high-speed internet and broadband services for underserved communities, green initiatives, housing counseling agencies, community land trusts, and other nonprofit organizations serving the affordable and fair housing, economic development, and wealth building needs of the community.(i) Efforts working with delinquent customers to facilitate a resolution of the delinquency.(j) For mortgage loans, the institutions efforts to work with delinquent borrowers to facilitate a resolution of the delinquency, including the number of loan modifications, the timeliness of such modifications, and the extent to which those modifications are effective in preventing subsequent defaults or foreclosures, in addition to data on numbers of delinquencies and foreclosures. If foreclosure is unavoidable, efforts to transfer property ownership to community land trusts, bona fide nonprofit housing organizations, or prospective owner occupants.(k) Origination of loans that show an undue concentration and a systematic pattern of lending resulting in the loss of affordable housing, deed restricted and rent controlled units, and displacement of residents, which shall result in a downgrade of the rating given pursuant to Section 100114.(l) The racial, ethnic, and gender diversity of the institutions board of directors and senior management.(m) For a covered financial institution that is a depository institution, the institutions use of reports from a specialty consumer reporting agency to determine eligibility for opening a bank account.(n) For covered financial institutions that are depository institutions, the number of open and active accounts that meet the Bank On National Account Standards issued by the Cities for Financial Empowerment Fund.(o) Evidence of discriminatory and prohibited practices, including violations of consumer protection laws, which shall result in a downgrade of the rating given pursuant to Section 100114.(p) An institutions record of meeting community needs, as informed by public comment.(q) Any other factors or requirements, as determined by the commissioner, which reasonably bear on the extent to which a covered financial institution is meeting the financial services needs of its entire community, including responsiveness to community needs as reflected by public comments.
100110. To assist in conducting the assessments required by Section 100108, the commissioner shall adopt rules providing for consideration of the following factors, at a minimum, pertaining to whether covered financial institutions are meeting the financial services needs of local communities:
(a) Activities to ascertain the financial services needs of the community, including communication with community members regarding the financial services provided.
(b) Extent of marketing to make members of the community aware of the financial services and products offered.
(c) The current distribution of the institutions branches among low-, moderate-, middle-, and upper-income geographies, and the institutions record of opening and closing branches, particularly branches located in rural or low- and moderate-income geographies and neighborhoods of color.
(d) The origination of mortgage loans, including, but not limited to, home purchase, home improvement and rehabilitation loans, and other efforts to assist existing low-income and moderate-income residents to be able to remain in affordable housing in their neighborhoods.
(e) The range of mortgage loan products offered, including, but not limited to, the offerings of government-backed loans or loans featuring low downpayments or other features designed to facilitate lending to low- and moderate-income borrowers.
(f) For small business and farm lenders, the origination of loans to businesses and farms with gross annual revenues of one million dollars ($1,000,000) or less, particularly those in rural and low- and moderate-income neighborhoods.
(g) The percentage of consumer and commercial loans applied for and originated by race and ethnicity, as reported by the borrower, and whether these consumer and commercial credit needs are being met.
(h) Participation, including by making investments or grants, in community development and redevelopment programs, affordable housing creation and preservation, small business technical assistance programs, minority-owned depository institutions, community development financial institutions, tribal communities, projects and initiatives to increase access to high-speed internet and broadband services for underserved communities, green initiatives, housing counseling agencies, community land trusts, and other nonprofit organizations serving the affordable and fair housing, economic development, and wealth building needs of the community.
(i) Efforts working with delinquent customers to facilitate a resolution of the delinquency.
(j) For mortgage loans, the institutions efforts to work with delinquent borrowers to facilitate a resolution of the delinquency, including the number of loan modifications, the timeliness of such modifications, and the extent to which those modifications are effective in preventing subsequent defaults or foreclosures, in addition to data on numbers of delinquencies and foreclosures. If foreclosure is unavoidable, efforts to transfer property ownership to community land trusts, bona fide nonprofit housing organizations, or prospective owner occupants.
(k) Origination of loans that show an undue concentration and a systematic pattern of lending resulting in the loss of affordable housing, deed restricted and rent controlled units, and displacement of residents, which shall result in a downgrade of the rating given pursuant to Section 100114.
(l) The racial, ethnic, and gender diversity of the institutions board of directors and senior management.
(m) For a covered financial institution that is a depository institution, the institutions use of reports from a specialty consumer reporting agency to determine eligibility for opening a bank account.
(n) For covered financial institutions that are depository institutions, the number of open and active accounts that meet the Bank On National Account Standards issued by the Cities for Financial Empowerment Fund.
(o) Evidence of discriminatory and prohibited practices, including violations of consumer protection laws, which shall result in a downgrade of the rating given pursuant to Section 100114.
(p) An institutions record of meeting community needs, as informed by public comment.
(q) Any other factors or requirements, as determined by the commissioner, which reasonably bear on the extent to which a covered financial institution is meeting the financial services needs of its entire community, including responsiveness to community needs as reflected by public comments.
100112. (a) (1) The commissioner may at any time investigate into the affairs of, and examine the books, accounts, records, files, and offices, whether within or outside of this state, used in the business of a covered financial institution, for compliance with this division.(2) The commissioner and the commissioners duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a covered financial institution referred to in paragraph (1).(3) The examined officers and employees of a covered financial institution shall exhibit to the examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power.(b) The commissioner, in consultation with state and federal regulators with an appropriate regulatory interest, shall examine each covered financial institution for compliance with this division, as well as applicable fair lending laws, including, but not limited to, the Unruh Civil Rights Act, the federal Equal Credit Opportunity Act, the federal Fair Housing Act, the federal Home Mortgage Disclosure Act, and Section 1071 of the Dodd-Frank Act.(c) The commissioner may adopt rules with respect to the manner of examination, including the imposition of examination fees.(d) The commissioner may conduct any examinations under this division with other state or federal regulators and may enter into cooperative agreements relative to the coordination of or joint participation in any examinations, the amount and assessment of fees therefor or enforcement actions relevant thereto, and may accept reports of assessments by these regulators under those arrangements or agreements.
100112. (a) (1) The commissioner may at any time investigate into the affairs of, and examine the books, accounts, records, files, and offices, whether within or outside of this state, used in the business of a covered financial institution, for compliance with this division.
(2) The commissioner and the commissioners duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a covered financial institution referred to in paragraph (1).
(3) The examined officers and employees of a covered financial institution shall exhibit to the examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power.
(b) The commissioner, in consultation with state and federal regulators with an appropriate regulatory interest, shall examine each covered financial institution for compliance with this division, as well as applicable fair lending laws, including, but not limited to, the Unruh Civil Rights Act, the federal Equal Credit Opportunity Act, the federal Fair Housing Act, the federal Home Mortgage Disclosure Act, and Section 1071 of the Dodd-Frank Act.
(c) The commissioner may adopt rules with respect to the manner of examination, including the imposition of examination fees.
(d) The commissioner may conduct any examinations under this division with other state or federal regulators and may enter into cooperative agreements relative to the coordination of or joint participation in any examinations, the amount and assessment of fees therefor or enforcement actions relevant thereto, and may accept reports of assessments by these regulators under those arrangements or agreements.
100114. The commissioner shall assign one of the following ratings to describe how a covered financial institution is meeting its community financial services needs based on the assessment conducted under Section 100108:(a) Outstanding.(b) High satisfactory.(c) Satisfactory.(d) Needs to improve.(e) Substantial noncompliance.
100114. The commissioner shall assign one of the following ratings to describe how a covered financial institution is meeting its community financial services needs based on the assessment conducted under Section 100108:
(a) Outstanding.
(b) High satisfactory.
(c) Satisfactory.
(d) Needs to improve.
(e) Substantial noncompliance.
100116. Upon the completion of the assessment of a covered financial institution under Section 100108, the commissioner shall prepare a written evaluation of the covered financial institutions record of performance relative to this division. The written evaluation shall have a public section, which shall include no less information than would be disclosed in a written evaluation under the federal Community Reinvestment Act, and a summary of relevant Home Mortgage Disclosure Act data, including data related to applications, originations, and denials for conventional and government-insured mortgages based on the demographics of applicants and demographics of neighborhoods, and a confidential section. The commissioner shall give the covered financial institution an opportunity to comment on the evaluation, and then shall make the public section of the written evaluation publicly available on the internet websites of the department and covered financial institution, respectively. The written evaluation shall include, but not be limited to, all of the following:(a) The assessment factors utilized to determine the covered financial institutions descriptive rating.(b) The commissioners conclusions with respect to each assessment factor.(c) A discussion of the facts supporting the conclusions made under subdivision (b).(d) The covered financial institutions descriptive rating and the basis therefor.(e) A summary of public comments.
100116. Upon the completion of the assessment of a covered financial institution under Section 100108, the commissioner shall prepare a written evaluation of the covered financial institutions record of performance relative to this division. The written evaluation shall have a public section, which shall include no less information than would be disclosed in a written evaluation under the federal Community Reinvestment Act, and a summary of relevant Home Mortgage Disclosure Act data, including data related to applications, originations, and denials for conventional and government-insured mortgages based on the demographics of applicants and demographics of neighborhoods, and a confidential section. The commissioner shall give the covered financial institution an opportunity to comment on the evaluation, and then shall make the public section of the written evaluation publicly available on the internet websites of the department and covered financial institution, respectively. The written evaluation shall include, but not be limited to, all of the following:
(a) The assessment factors utilized to determine the covered financial institutions descriptive rating.
(b) The commissioners conclusions with respect to each assessment factor.
(c) A discussion of the facts supporting the conclusions made under subdivision (b).
(d) The covered financial institutions descriptive rating and the basis therefor.
(e) A summary of public comments.
100118. Notwithstanding any other section in this division, the commissioner may establish, by rule, an alternative examination procedure for any covered financial institution that, as of the most recent examination, has been assigned a rating of outstanding or high satisfactory for its record of performance in meeting its community financial services needs.
100118. Notwithstanding any other section in this division, the commissioner may establish, by rule, an alternative examination procedure for any covered financial institution that, as of the most recent examination, has been assigned a rating of outstanding or high satisfactory for its record of performance in meeting its community financial services needs.
100120. A covered financial institution that receives a rating of needs to improve or substantial noncompliance shall submit a plan within 180 days of receiving the rating to the commissioner describing the covered financial institutions efforts to improve its performance in helping to meet the financial needs of local communities and the results of those efforts. The plan shall be subject to public comment and updated quarterly until the covered financial institution receives a rating of satisfactory or better.
100120. A covered financial institution that receives a rating of needs to improve or substantial noncompliance shall submit a plan within 180 days of receiving the rating to the commissioner describing the covered financial institutions efforts to improve its performance in helping to meet the financial needs of local communities and the results of those efforts. The plan shall be subject to public comment and updated quarterly until the covered financial institution receives a rating of satisfactory or better.
100122. A covered financial institution shall provide, in the public lobby of each of its offices, if any, and on its internet website, a public notice that is substantially similar to the following:State of California Community Reinvestment NoticeThe California Department of Financial Protection and Innovation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.
100122. A covered financial institution shall provide, in the public lobby of each of its offices, if any, and on its internet website, a public notice that is substantially similar to the following:
State of California Community Reinvestment Notice
The California Department of Financial Protection and Innovation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.
100124. In considering an application for the establishment of a branch, office, or other facility, the relocation of a main office, branch, office, or other facility, a license renewal, change in control of a covered financial institution, or a merger or consolidation with or the acquisition of assets or assumption of liabilities of any covered financial institution, out-of-state bank, credit union, or residential mortgage licensee, national bank or credit union, or foreign financial institution, the commissioner shall consider, but not be limited to considering, the record of performance of the covered financial institution and its parent company, including all subsidiaries and affiliates thereof, relative to this division. The record of performance of the covered financial institution may be the basis for the denial of an application.
100124. In considering an application for the establishment of a branch, office, or other facility, the relocation of a main office, branch, office, or other facility, a license renewal, change in control of a covered financial institution, or a merger or consolidation with or the acquisition of assets or assumption of liabilities of any covered financial institution, out-of-state bank, credit union, or residential mortgage licensee, national bank or credit union, or foreign financial institution, the commissioner shall consider, but not be limited to considering, the record of performance of the covered financial institution and its parent company, including all subsidiaries and affiliates thereof, relative to this division. The record of performance of the covered financial institution may be the basis for the denial of an application.
100126. The commissioner shall prepare and submit annually to the Treasurer a list of covered financial institutions which have received a rating of needs to improve or substantial noncompliance pursuant to this division. Notwithstanding any other law, a covered financial institution with a rating of needs to improve or substantial noncompliance shall not receive state funds for deposit or be awarded a state contract to provide financial services.
100126. The commissioner shall prepare and submit annually to the Treasurer a list of covered financial institutions which have received a rating of needs to improve or substantial noncompliance pursuant to this division. Notwithstanding any other law, a covered financial institution with a rating of needs to improve or substantial noncompliance shall not receive state funds for deposit or be awarded a state contract to provide financial services.
100128. (a) The Community Reinvestment Fund is hereby established within the State Treasury. Moneys in the fund shall be available, upon appropriation by the Legislature, to the commissioner for purposes of administering this division.(b) (1) The commissioner may issue an administrative penalty of up to one hundred thousand dollars ($100,000) to a covered financial institution that regularly fails to meet its obligations prescribed by Section 100104, including, but not limited to, a covered financial institution that receives a rating of substantial noncompliance in any two successive examinations.(2) All moneys received in payment of administrative penalties under this section shall be deposited in the fund.
100128. (a) The Community Reinvestment Fund is hereby established within the State Treasury. Moneys in the fund shall be available, upon appropriation by the Legislature, to the commissioner for purposes of administering this division.
(b) (1) The commissioner may issue an administrative penalty of up to one hundred thousand dollars ($100,000) to a covered financial institution that regularly fails to meet its obligations prescribed by Section 100104, including, but not limited to, a covered financial institution that receives a rating of substantial noncompliance in any two successive examinations.
(2) All moneys received in payment of administrative penalties under this section shall be deposited in the fund.