Cal. Code Regs. tit. 10 § 1718

Current through Register 2024 Notice Reg. No. 37, September 13, 2024

Section 1718 - Cash in Lieu of Surety Bond

(a) Section 17202.1 of the Financial Code allows licensed escrow agents, or applicants for an escrow agent's license, to deposit with the Commissioner cash, investment certificates of industrial loan companies, certificates of deposit, bank accounts or savings and loan share accounts in lieu of the surety bond required by section 17202 of the Financial Code.

The procedures for establishing a deposit are as follows:

(1) The escrow agent or applicant shall make an assignment of the deposit, certificate or account to the Commissioner. The assignment shall be made using the following form containing the information therein specified:

BEFORE THE DEPARTMENT OF BUSINESS OVERSIGHT OF THE STATE OF CALIFORNIA

ASSIGNMENT TO COMMISSIONER OF BUSINESS OVERSIGHT PURSUANT TO FINANCIAL CODE SECTION 17202.1

PART I. ASSIGNMENT

(Name), herein after called Assignor, whose place of business is

______________________________

, does hereby assign and set over to the Commissioner of Business Oversight of the State of California or his or her duly appointed conservator or receiver all right, title and interest of whatever nature of Assignor in and to the investment certificate/certificate of deposit/bank account/savings and loan share account of the Assignor in

(Name of industrial loan company, bank or savings and loan association)

(Street) (City), California, in the amount of $____________________, identified as certificate/account no. ______________________________. Assignor agrees that this assignment carries with it the right in the insurance of the assigned accounts by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation (or its successor) and includes and gives the right to the Commissioner of Business Oversight or his or her duly appointed conservator or receiver to redeem, collect and withdraw the full amount of such deposit, certificate or account at any time without notice to the Assignor. This assignment is given as security for any liability of the Assignor under the provisions of the Escrow Law and in accordance with sections 17202 and 17202.1 of the California Financial Code.

This assignment includes interest and penalties payable on any such liability. Assignor hereby notifies the above-named industrial loan company, bank or savings and loan association of this assignment.

(A copy of the resolution of Assignor's Board of Directors, certified by the Secretary of the Assignor, must be attached to each copy of this Assignment.)

Dated this __________ day of ____________________, 20_____.

________________________________________(Assignor)

________________________________________Signature of Authorized Officer

PART II. RECEIPT FOR NOTICE OF ASSIGNMENT

Receipt is hereby acknowledged of the written notice of the assignment to the Commissioner of Business Oversight, State of California, of the investment certificates, certificates of deposit, bank accounts or savings and loan share accounts identified in Part I hereof. We confirm that such account/certificate is outstanding and we have noted in our records the interest of the Commissioner and his or her duly appointed conservator or receiver therein as shown in said Assignment, and have retained a copy of said Assignment and of this receipt. We certify that said accounts are fully insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation (or its successor) and that we have received no notice of any lien, encumbrance, hold, claim or obligation concerning said certificates or accounts prior to the assignment thereof to the Commissioner of Business Oversight. We further state that no lien or right of offset is or at any subsequent time will be claimed by this industrial loan company, bank or savings and loan association against said certificates or accounts for any obligation due or to become due to this industrial loan company bank or savings and loan association from the Assignor or any of its officers, directors, shareholders or employees. We agree to make payment to the Commissioner of Business Oversight upon request in accordance with the laws applicable to this industrial loan company, bank or savings and loan association.

Dated this __________ day of ____________________, 20_____.

________________________________________(Name of industrial loan company, bank or savings and loan association)

________________________________________(Street) (City)

By ___________________________________(Name and Title of Officer)

PART III. RECEIPT FOR DEPOSIT OF INVESTMENT CERTIFICATES, CERTIFICATES OF DEPOSIT, BANK ACCOUNTS OR SAVINGS AND LOAN SHARE ACCOUNTS AND DIRECTIONS TO PAY EARNINGS.

Receipt is acknowledged of the above Assignment and the investment certificates, certificates of deposit, bank accounts or savings and loan share accounts identified therein. The industrial loan company, bank or savings and loan association named in the above Assignment is hereby authorized and directed to pay any earnings which exceed the amount of any penalties which may be assessed on said certificates or accounts to the above-named Assignor until otherwise notified in writing by the Commissioner of Business Oversight of the State of California.

Dated __________ this day of ____________________, 20_____.

________________________________________(Commissioner of Business Oversight)

By ___________________________________

(2) An original and 5 copies of the form set forth in subsection (1) above, completed as to Part I and Part II thereof, shall be filed with the Commissioner.

(3) Submission of the original form must be accompanied by two copies of the board of directors' resolution authorizing filing of the assignment.

(4) The escrow agent or applicant shall forward the investment certificates, certificates of deposit, or other appropriate evidence of deposit of bank accounts or savings and loan share accounts to the Commissioner at the time of filing the assignment.

(5) After completion of Part III of the form by the Commissioner, a copy of the assignment will be sent to the assignor escrow agent, or applicant, and a copy to the issuing industrial loan company, bank or savings and loan association.

(b) The Commissioner is not given authority under the Escrow Law to adjudicate any claim or controversy against a bond of an escrow agent or against a deposit of cash, investment certificates, certificates of deposit, bank accounts or savings and loan share accounts made in lieu of a bond. It will be necessary for disputed claims to be adjudicated by a court of competent jurisdiction. Upon filing of suit and notice to the Commissioner, if deemed appropriate under the circumstances, the Commissioner will turn over all or part of the funds to the court by means of an interpleader or similar proceeding.

(c) Cash, investment certificates, certificates of deposit, bank accounts or savings and loan share accounts deposited in lieu of a bond may be returned to the escrow agent two years after the date of termination by the escrow agent of the deposit arrangement or two years after the termination of the escrow agent's license, if the escrow agent makes a showing satisfactory to the Commissioner that it has no outstanding liabilities or claims against it which, if valid, could be satisfied in whole or in part out of the deposit. In the event an escrow agent establishes a subsequent deposit in lieu of a bond in accordance with this section, the prior deposit may be returned to the escrow agent after obtaining the Commissioner's written consent.

Cal. Code Regs. Tit. 10, § 1718

1. New section filed 8-24-90; operative 9-23-90 (Register 90, No. 42).
2. Change without regulatory effect amending subsections (a), (b) and (c) filed 2-8-91 pursuant to section 100, title 1, California Code of Regulations (Register 91, No. 11).
3. Editorial correction of subsection (c) (Register 91, No. 24).
4. Editorial correction of printing error in form (Register 91, No. 33).
5. Change without regulatory effect amending subsection (a)(1) filed 9-25-2002 pursuant to section 100, title 1, California Code of Regulations (Register 2002, No. 39).
6. Change without regulatory effect amending form within subsection (a)(1) filed 8-13-2014 pursuant to section 100, title 1, California Code of Regulations (Register 2014, No. 33).

Note: Authority cited: Sections 17202.1 and 17400, Financial Code. Reference: Section 17202.1, Financial Code.

1. New section filed 8-24-90; operative 9-23-90 (Register 90, No. 42).
2. Change without regulatory effect amending subsections (a), (b) and (c) filed 2-8-91 pursuant to section 100, title 1, California Code of Regulations (Register 91, No. 11).
3. Editorial correction of subsection (c) (Register 91, No. 24).
4. Editorial correction of printing error in form (Register 91, No. 33).
5. Change without regulatory effect amending subsection (a)(1) filed 9-25-2002 pursuant to section 100, title 1, California Code of Regulations (Register 2002, No. 39).

1. New section filed 8-24-90; operative 9-23-90 (Register 90, No. 42).
2. Change without regulatory effect amending subsections (a), (b) and (c) filed 2-8-91 pursuant to section 100, title 1, California Code of Regulations (Register 91, No. 11).
3. Editorial correction of subsection (c) (Register 91, No. 24).
4. Editorial correction of printing error in form (Register 91, No. 33).
5. Change without regulatory effect amending subsection (a)(1) filed 9-25-2002 pursuant to section 100, title 1, California Code of Regulations (Register 2002, No. 39).
6. Change without regulatory effect amending form within subsection (a)(1) filed 8-13-2014 pursuant to section 100, title 1, California Code of Regulations (Register 2014, No. 33).

1. New section filed 8-24-90; operative 9-23-90 (Register 90, No. 42).
2. Change without regulatory effect amending subsections (a), (b) and (c) filed 2-8-91 pursuant to section 100, title 1, California Code of Regulations (Register 91, No. 11).
3. Editorial correction of subsection (c) (Register 91, No. 24).
4. Editorial correction of printing error in form (Register 91, No. 33).
5. Change without regulatory effect amending subsection (a)(1) filed 9-25-2002 pursuant to section 100, title 1, California Code of Regulations (Register 2002, No. 39).
6. Change without regulatory effect amending form within subsection (a)(1) filed 8-13-2014 pursuant to section 100, title 1, California Code of Regulations (Register 2014, No. 33).