2007 California Financial Code Article 5. Obligations Of Licensees

CA Codes (fin:1862-1876)

1862.  The license is not transferable or assignable.



1863.  Each licensee shall file with the commissioner quarterly a
report as of the end of the preceding calendar quarter which shall
include:
   (a) An unaudited unconsolidated statement of income and statement
of condition of licensee completed in accordance with generally
accepted accounting principles applied on a consistent basis;
   (b) A schedule of eligible securities owned by the licensee
pursuant to Section 1876.8.
   (c) The names and addresses of agents appointed or terminated
during such quarter.



1863.1.  Each licensee shall, not more than 90 days after the close
of each of its fiscal years or within a longer period as the
commissioner may by regulation or order specify, file with the
commissioner a report containing all of the following:
   (a) Financial statements, including balance sheet, statement of
income or loss, statement of changes in shareholder's equity, and
statement of cash flows, for or as of the end of that fiscal year,
prepared with audit by an independent certified public accountant or
an independent public accountant in accordance with generally
accepted accounting principles.
   (b) A report, certificate, or opinion of the independent certified
public accountant or independent public accountant, stating that the
financial statements were prepared in accordance with generally
accepted accounting principles.
   (c) Any other information as the commissioner may by regulation or
order require.


1864.  The commissioner may at any time require any licensee to make
and file with the commissioner a special report furnishing such
relevant information as the commissioner may reasonably specify to
inform the commissioner of the actual financial condition of such
licensee.



1865.  (a) No licensee shall issue any form of traveler's check for
sale in this state unless all of the following are satisfied:
   (1) The traveler's check clearly identifies the licensee as the
issuer of the traveler's check.
   (2) The traveler's check is not misleading in any material
respect.
   (3) The traveler's check complies with all applicable laws.
   (b) Before a new licensee issues its first traveler's check for
sale in this state, it shall file a certified copy of the form of
that traveler's check with the commissioner.



1866.  Every travelers check issued by a licensee, for sale in this
state, shall bear the name of the licensee clearly imprinted thereon.



1867.  Each licensee shall be liable in accordance with the
California Commercial Code for the payment of all travelers checks
duly issued by it and lawfully sold in this state.



1868.  Each licensee shall at all times maintain shareholder equity
determined to be adequate by the commissioner.



1869.  No person shall become or continue to be an agent in
California of a licensee, nor shall any licensee appoint or continue
any person as its agent in California unless such person and such
licensee shall have first made a written agreement setting forth the
terms of the agency and including provisions:
   (a) That the licensee appoints the person as its agent with
authority to sell in California on behalf of the licensee traveler's
checks issued by the licensee;
   (b) That all funds, less fees due agents provided for and
expressly set forth, received by the person from the sale of traveler'
s checks issued by the licensee shall be trust funds owned by and
belonging to the licensee;
   (c) That the person make and keep such accounts, correspondence,
memorandums, papers, books and other records as the commissioner by
regulation or order requires and preserve such records for the time
specified by such regulation or order.
   (d) That the person will comply with all applicable conditions of
this chapter and regulations and orders issued under this chapter.



1870.  No agent of a licensee shall, nor shall any licensee cause or
permit any of its agents to, sell any travelers check issued by such
licensee without concurrently receiving cash or its equivalent,
check, draft, credit card, travelers check or payment instrument, or
a combination of same believed to be valid in an amount not less than
the face amount of such travelers check.



1871.  Each agent of a licensee which sells any traveler's check
issued by such licensee shall, and each licensee shall require each
of its agents which sells any traveler's check issued by such
licensee to, report such sale within seven days after the sale and
remit the face amount of such traveler's check to such licensee
within three business days (or such shorter period as such agent and
such licensee may specify in the agreement called for in Section 1869
or in any amendment of such contract) after such sale.  This section
shall not apply to an agent which is an insured institution pursuant
to the Federal Deposit Insurance Corporation Act (12 U.S.C. 1811 et
seq.) or the Federal Credit Union Act (12 U.S.C. 1781 et seq.).
   For the purpose of this section, remittance shall include either
direct payment of such funds to licensee or its representative, or
the deposit of such funds in a bank or savings association in an
account in the name of such licensee specifically established for the
purpose of receiving such funds.  Remittance by such agency to such
licensee or its representatives or deposit by such agency in such
account in a bank or savings association of funds in advance of the
sale of such traveler's checks but in an amount not less than the
amount that such agent would normally receive from such sales of
payment instruments, shall be deemed compliance with provisions of
this section.


1872.  No agent of a licensee shall, nor shall any licensee cause or
permit any of its agents to, commingle any funds, less fees due
agents, received from the sale by such agent of travelers checks
issued by such licensee with any other property owned or controlled
by such agent or use such funds for any purpose other than to remit
such funds to such licensee; provided, however, that any agent of a
licensee may, unless such agent and such licensee provide to the
contrary in the agreement called for in Section 1869 or in any
amendment of such agreement, commingle such funds with other cash,
cash equivalents and travelers checks owned or controlled by it and
use such funds in the ordinary course of its business for the purpose
of making change and cashing travelers checks, checks, or drafts
believed by it to be valid.



1873.  If any agent of a licensee shall commingle any funds, less
fees due agents, received from the sale of travelers checks issued by
such licensee with any other property owned or controlled by such
agent, all such property shall be impressed with a trust in favor of
such licensee in an amount equal to the aggregate amount of such
funds so commingled.



1874.  All funds, less fees due agents pursuant to the agreement
required by Section 1869, received by agents from the sale of
travelers checks shall constitute trust funds owned by and belonging
to the licensee.


1875.  No funds, less fees due agents, received by any agent of a
licensee from the sale of travelers checks issued by such licensee,
while held by such agent, nor any property impressed with a trust
pursuant to Section 1874 shall be subject to enforcement of a money
judgment or sequestration by order of any court, except by such
licensee.



1876.  Nothing in this chapter shall be construed to prevent any
licensee from taking any legal action necessary to enforce any claim
which such licensee may have.