2010 California Code
Financial Code
Article 1. General Provisions

1700.  In this chapter, unless the context otherwise requires:
   (a) "Agency" means a depositary agency or a nondepositary agency.
   (b) "Branch office" means a limited branch office, a retail branch
office, or a wholesale branch office.
   (c) "Business in this state," when used with respect to a foreign
(other nation) bank which is licensed to maintain one or more
agencies or branch offices, includes (without limitation) the
aggregate business of all the offices.
   (d) "Controlling person," when used with respect to a foreign
(other nation) bank, means any person who, directly or indirectly,
controls the bank. For purposes of this subdivision, "control" has
the meaning set forth in subdivision (b) of Section 700, and "person"
has the meaning set forth in subdivision (d) of Section 700.
   (e) "Depositary agency," when used with respect to a foreign
(other nation) bank, means a place in this state at which the bank
transacts commercial banking business but at which it does not
transact the business of receiving deposits, except as permitted
under paragraph (2) of subdivision (a) of Section 1755.
   (f) "Executive officer," when used with respect to a foreign
(other nation) bank or a controlling person of a foreign (other
nation) bank, means the chief executive officer, the chief operating
officer, the chief financial officer, and any other person who
participates or has authority to participate in major policy-making
functions of the bank or controlling person. "Executive officer,"
when used with respect to a foreign (other nation) bank, includes the
head of the international division (or, if there is no such
division, the closest equivalent division or unit) of such bank.
   (g) "Federal agency" has the meaning set forth in Section 1(b) of
the International Banking Act of 1978.
   (h) "Federal branch" has the meaning set forth in Section 1(b) of
the International Banking Act of 1978.
   (i) (1) "License" means a license issued under this chapter,
authorizing a foreign bank to maintain an office.
   (2) To be "licensed" means to be issued or to hold a license.
   (3) To be "licensed to transact business in this state," when used
with respect to a foreign (other nation) bank, means that the bank
is licensed to maintain an agency or branch office.
   (j) "Limited branch office," when used with respect to a foreign
(other nation) bank, means a place in this state at which the bank
transacts commercial banking business but at which it does not
transact the business of receiving deposits except as permitted under
paragraph (3) of subdivision (a) of Section 1755.
   (k) "Nondepositary agency," when used with respect to a foreign
(other nation) bank, means a place in this state at which the bank
transacts commercial banking business, except the business of
receiving deposits.
   (l) "Office," when used with respect to a foreign (other nation)
bank, means any agency, branch office, or representative office of
the bank.
   (m) "Primary office," when used with respect to a foreign (other
nation) bank that is licensed to maintain a single agency or branch
office, means the agency or branch office and, when used with respect
to a foreign (other nation) bank that is licensed to maintain two or
more agencies or branch offices, means that one of the offices which
the bank has designated as its primary office in accordance with
Section 1714.
   (n) "Representative office," when used with respect to a foreign
(other nation) bank, means an office in this state at which the bank
engages in representational functions but at which it does not
transact commercial banking business.
   (o) "Retail branch office," when used with respect to a foreign
(other nation) bank, means a place in this state at which the bank
transacts commercial banking business, including (without limitation)
the business of receiving deposits.
   (p) "Wholesale branch office," when used with respect to a foreign
(other nation) bank, means a place in this state at which the bank
transacts commercial banking business but at which it does not
transact the business of receiving deposits except as permitted under
paragraph (4) of subdivision (a) of Section 1755.



1700.3.  Nothing in this chapter, except Section 1707, applies to a
federal agency or branch in this state.



1700.5.  (a) In this section, "subject bank" means a bank organized
under the laws of any territory of the United States, Puerto Rico,
Guam, American Samoa, the Trust Territory of the Pacific Islands, the
Virgin Islands, or the Northern Mariana Islands.
   (b) Nothing in this chapter, except subdivision (c), shall apply
to a subject bank that maintains a branch office in this state as a
foreign (other state) state bank pursuant to Chapter 22 (commencing
with Section 3800), Section 13(f), 13(k), 18(d), or 44 of the Federal
Deposit Insurance Act (12 U.S.C. Sec. 1823(f), 1823(k), 1828(d), or
1831u), or Section 9 of the Federal Reserve Act (12 U.S.C. Sec. 321).
   (c) No subject bank shall at the same time maintain (1) as a
foreign (other nation) bank, an office in this state licensed under
this chapter and (2) as a foreign (other state) state bank, a branch
office in this state pursuant to Chapter 22 (commencing with Section
3800), Section 13(f), 13(k), 18(d), or 44 of the Federal Deposit
Insurance Act (12 U.S.C. Sec. 1823(f), 1823(k), 1828(d), or 1831u),
or Section 9 of the Federal Reserve Act (12 U.S.C. Sec. 321).




1701.  For purposes of this chapter, offices of foreign (other
nation) banks are divided into classes and ranked in ascending order,
as follows:
   (a) Representative office.
   (b) Nondepositary agency.
   (c) Depositary agency.
   (d) Limited branch office.
   (e) Wholesale branch office.
   (f) Retail branch office.



1701.5.  (a) For purposes of this chapter:
   (1) Changing a lower class office into a higher class office shall
be treated as establishing the higher class office, but not as
closing the lower class office.
   (2) Changing a higher class office into a lower class office shall
be treated as closing the higher class office, but not as
establishing the lower class office.
   (b) In the case of changing a higher class office into a lower
class office, when the application for approval to close the higher
class office has been approved and all conditions precedent to the
closing have been fulfilled, the foreign (other nation) bank may
change the higher class office into the lower class office, and the
commissioner shall issue a license authorizing the bank to maintain
the lower class office.


1702.  Fees shall be paid to, and collected by, the commissioner, as
follows:
   (a) The fee for filing with the commissioner an application by a
foreign (other nation) bank that is not licensed to transact business
in this state for approval to establish a branch office shall be two
thousand dollars ($2,000).
   (b) The fee for filing with the commissioner an application by a
foreign (other nation) bank that is not licensed to transact business
in this state for approval to establish an agency shall be one
thousand five hundred dollars ($1,500).
   (c) The fee for filing with the commissioner an application by a
foreign (other nation) bank that is licensed to transact business in
this state for approval to establish a branch office shall be one
thousand dollars ($1,000).
   (d) The fee for filing with the commissioner an application by a
foreign (other nation) bank that is licensed to transact business in
this state for approval to establish an agency shall be seven hundred
fifty dollars ($750).
   (e) The fee for filing with the commissioner an application by a
foreign (other nation) bank for approval to establish a
representative office shall be two hundred fifty dollars ($250).
   (f) The fee for filing with the commissioner an application by a
foreign (other nation) bank that is licensed to maintain an agency or
branch office for approval to relocate or to close the office shall
be two hundred fifty dollars ($250).
   (g) The fee for filing with the commissioner an application by a
foreign (other nation) bank that is licensed to maintain a
representative office for approval to relocate or to close the
representative office shall be one hundred dollars ($100).
   (h) The fee for issuing a license shall be twenty-five dollars
($25).
   (i) Each foreign (other nation) bank that on June 1st of any year
is licensed to maintain a representative office but is not licensed
to transact business in this state shall pay, on or before the
following July 1st, a fee of two hundred fifty dollars ($250) for
each such representative office.


1703.  Each application filed with the commissioner under this
chapter or under any regulation or order issued under this chapter
shall be in such form, shall contain such information, shall be
signed in such manner, and shall (if the commissioner so requires by
regulation or order) be verified in such manner, as the commissioner
may by regulation or order require.



1704.  (a) In this section, "act" includes (without limitation)
omission.
   (b) For purposes of making findings on an application by a foreign
(other nation) bank for approval to establish an office:
   (1) The commissioner may, in the absence of credible evidence to
the contrary, presume that the directors, executive officers, and any
controlling person of the bank and the directors and executive
officers of any controlling person of the bank are each of good
character and sound financial standing.
   (2) The commissioner may find that the bank, a director, executive
officer, or a controlling person of the bank, or a director or
executive officer of a controlling person of the bank is not of good
character if that person has done any of the following:
   (A) Has been convicted of, or has pleaded nolo contendere to, any
crime involving an act of fraud or dishonesty.
   (B) Has consented to or suffered a judgment in any civil action
based upon conduct involving an act of fraud or dishonesty.
   (C) Has consented to or suffered the suspension or revocation of
any professional, occupational, or vocational license based upon
conduct involving an act of fraud or dishonesty.
   (D) Has willfully made or caused to be made in any application or
report filed with the commissioner or in any proceeding before the
commissioner, any statement that was at the time and in the light of
the circumstances under which it was made false or misleading with
respect to any material fact, or has willfully omitted to state in
any application or report filed with the commissioner or in any
proceeding before the commissioner, any material fact that was
required to be stated therein.
   (E) Has willfully committed any violation of, or has willfully
aided, abetted, counseled, commanded, induced, or procured the
violation by any other person of, any provision of this division or
of any regulation or order issued under this division.
   (c) Paragraph (2) of subdivision (b) shall not be deemed to be an
exclusive list of the grounds upon which the commissioner may find,
for purposes of making findings on an application by a foreign (other
nation) bank for approval to establish an office, that the bank, a
director, executive officer, or controlling person of the bank, or a
director or executive officer of a controlling person of the bank is
not of good character.



1705.  (a) Each foreign (other nation) bank that is licensed to
maintain an office shall file with the commissioner reports as and
when the commissioner may, by regulation or order, require.
   (b) Each report filed with the commissioner under this chapter or
under any regulation or order issued under this chapter shall be in
the form, shall contain the information, shall be signed in the
manner, and shall (if the commissioner so requires by regulation or
order) be verified in the manner, that the commissioner may, by
regulation or order, require.


1706.  Each foreign (other nation) bank that is licensed to maintain
an office shall make, keep, and preserve at the office or at another
place that the commissioner may, by regulation or order, approve,
the books, accounts, and other records relating to the business of
the office, in the form, in the manner, and for the time that the
commissioner may, by regulation or order, provide.



1707.  (a) No foreign (other nation) bank which is licensed to
maintain an agency or branch office shall concurrently maintain a
federal agency or federal branch in this state.
   (b) No foreign (other nation) bank which maintains a federal
agency or federal branch in this state shall concurrently be licensed
to maintain an agency or branch office in this state.



1708.  (a) No foreign (other nation) bank shall concurrently be
licensed to maintain offices of different classes.
   (b) Subdivision (a) does not prohibit a foreign (other nation)
bank that is licensed to maintain a representative office from being
concurrently licensed to maintain an office of a different class or
to prohibit a foreign (other nation) bank that is licensed to
maintain an office other than a representative office from being
concurrently licensed to maintain a representative office.



1710.  (a) (1) No foreign (other nation) bank (other than a bank
that is licensed to maintain an agency or branch office) shall be
issued a license to maintain a representative office unless it shall
have first filed with the commissioner, in the form that the
commissioner may by regulation or order require, an appointment
irrevocably appointing the commissioner and the commissioner's
successor from time to time in office to be the bank's attorney to
receive service of any lawful process in any noncriminal judicial or
administrative proceeding against the bank or any of its successors
that arises out of the activities in this state of the representative
office after the appointment has been filed, with the same force and
validity as if served personally on the bank or its successor, as
the case may be.
   (2) Any foreign (other nation) bank (other than a bank that is
licensed to maintain an agency or branch office or that maintains a
federal agency or federal branch in this state) that maintains a
representative office and that has not filed with the commissioner an
appointment pursuant to paragraph (1) shall be deemed by the
maintenance of that office to have appointed the commissioner as its
attorney to receive service of any lawful process in any noncriminal
judicial or administrative proceeding against the bank or any of its
successors that arises out of the activities in this state of the
representative office with the same force and validity as if served
personally on the bank or its successor, as the case may be.
   (b) (1) No foreign (other nation) bank shall be issued a license
to maintain an agency or branch office unless it shall have first
filed with the commissioner, in the form that the commissioner may by
regulation or order require, an appointment irrevocably appointing
the commissioner and the commissioner's successor from time to time
in office to be the bank's attorney to receive service of any lawful
process in any noncriminal judicial or administrative proceeding
against the bank or any of its successors that arises after the
appointment has been filed, with the same force and validity as if
served personally on the bank or its successor, as the case may be.
   (2) Any foreign (other nation) bank that maintains an agency or
branch office (other than a federal agency or federal branch) and
that has not filed with the commissioner an appointment pursuant to
paragraph (1) shall be deemed by the maintenance of that office to
have appointed the commissioner as its attorney to receive service of
any lawful process in any noncriminal judicial or administrative
proceeding against the bank or any of its successors with the same
force and validity as if served personally on the bank or its
successor, as the case may be.
   (c) Service may be made on a foreign (other nation) bank that has
appointed or is deemed to have appointed the commissioner as its
attorney for service of process by leaving a copy of the process at
any office of the commissioner. However, the service is not effective
unless (1) the party making the service, who may be the
commissioner, forthwith sends notice of the service and a copy of the
process by registered or certified mail to the bank served at its
last address on file with the commissioner at any of its offices in
this state or at its head office, and (2) an affidavit of compliance
with this subdivision by the party making service is filed in the
case on or before the return date, if any, or within any further time
that the court, in the case of a judicial proceeding, or the
administrative agency, in the case of an administrative proceeding,
allows.


1711.  No license shall be transferable or assignable.



1712.  Each foreign (other nation) bank that is licensed to maintain
an office shall post its license in a conspicuous place at the
office.


1713.  (a) Each foreign (other nation) bank that is licensed to
maintain an office shall assign to the office a popular name that
consists of a specific designation by name or number and shall post
the popular name and the name of the bank in a conspicuous place at
the office.
   (b) The popular name that a foreign (other nation) bank assigns to
a representative office that it is licensed to maintain shall
include the term "representative office."
   (c) The popular name that a foreign (other nation) bank assigns to
an agency that it is licensed to maintain shall not include the term
"branch" unless the term is modified by the word "foreign" or
"overseas" or by a similar word.



1714.  Whenever a foreign (other nation) bank is licensed to
maintain two or more agencies or branch offices, it shall designate
one of such offices as its primary office.



1715.  Each foreign (other nation) bank that is licensed to maintain
an office shall conduct all of the business of the office in a
single building or in adjoining buildings. However, for good cause
and with the approval of the commissioner, the bank may conduct part
of the business of the office elsewhere in the same vicinity.




1716.  Any foreign (other nation) bank that, at the time it makes a
loan or forbearance or executes a contract therefor, has assets equal
to at least one hundred million dollars ($100,000,000), is licensed
to maintain an office in California, is licensed or otherwise
authorized by another state of the United States to maintain an
agency or branch office in that state, or maintains a federal agency
or federal branch in any state of the United States is exempted from
the restrictions of Section 1 of Article XV of the Constitution
relating to rates of interest upon the loan or forbearance of any
money, goods, or things in action or on accounts after demand.
   This section does not exempt a foreign (other nation) bank or a
subsidiary thereof from complying with all other laws and regulations
governing the business in which such a bank or subsidiary is
engaged.
   This section creates and authorizes an exempt class of persons
pursuant to Section 1 of Article XV of the Constitution.