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<ns0:Id>20250AB__080195AMD</ns0:Id>
<ns0:VersionNum>95</ns0:VersionNum>
<ns0:History>
<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-02-18</ns0:ActionDate>
</ns0:Action>
<ns0:Action>
<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-03-28</ns0:ActionDate>
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<ns0:Action>
<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-04-21</ns0:ActionDate>
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<ns0:Action>
<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-05-06</ns0:ActionDate>
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<ns0:Action>
<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-05-23</ns0:ActionDate>
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<ns0:LegislativeInfo>
<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>AB</ns0:MeasureType>
<ns0:MeasureNum>801</ns0:MeasureNum>
<ns0:MeasureState>AMD</ns0:MeasureState>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Bonta</ns0:AuthorText>
<ns0:AuthorText authorType="PRINCIPAL_COAUTHOR_ORIGINATING">(Principal coauthors: Assembly Members Bryan, Elhawary, Gipson, Jackson, McKinnor, Sharp-Collins, and Wilson)</ns0:AuthorText>
<ns0:AuthorText authorType="PRINCIPAL_COAUTHOR_OPPOSITE">(Principal coauthors: Senators Richardson, Smallwood-Cuevas, and Weber Pierson)</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Bonta</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Bryan</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Elhawary</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Gipson</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Jackson</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>McKinnor</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Sharp-Collins</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Wilson</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Richardson</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Smallwood-Cuevas</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Weber Pierson</ns0:Name>
</ns0:Legislator>
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<ns0:Title>An act to add Division 27 (commencing with Section 120000) to the Financial Code, relating to financial institutions.</ns0:Title>
<ns0:RelatingClause>financial institutions</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Financial institutions: California Community Reinvestment Act.</ns0:Subject>
</ns0:GeneralSubject>
<ns0:DigestText>
<html:p>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.</html:p>
<html:p>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 institution’s 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.</html:p>
<html:p>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.</html:p>
<html:p>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.</html:p>
</ns0:DigestText>
<ns0:DigestKey>
<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>NO</ns0:LocalProgram>
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<ns0:MeasureIndicators>
<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
<ns0:ImmediateEffectFlags>
<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>NO</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
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</ns0:Description>
<ns0:Bill id="bill">
<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_9DFB7323-A143-4186-8B2D-FA532F11D87F">
<ns0:Num>SECTION 1.</ns0:Num>
<ns0:Content>
<html:p>The Legislature finds and declares:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
The federal Community Reinvestment Act (federal CRA) creates an affirmative obligation on the part of deposit-taking banks to meet the credit needs of their communities, including low- and moderate-income communities. The federal CRA has encouraged banks to lend and invest billions of dollars in low- and moderate-income communities in California. Administered at the federal level, banking regulators and banks have established a regulatory and institutional framework and infrastructure over decades of implementation. Nevertheless, the federal CRA statute and its implementation demonstrate significant
limitations and gaps in meeting community credit needs, cover a decreasing share of financial service industry stakeholders, and remain subject to loosening regulatory oversight at the federal level and diminished commitment by covered banks. Under the current administration, comments and actions by government officials and bank officers suggest the potential for weakening federal CRA oversight and implementation.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Seven other states and the District of Columbia already have put into place state and local versions of the federal CRA to extend coverage of the CRA to new entities, and to provide for local oversight and implementation.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A state Community Reinvestment Act can direct private capital to the Community of Altadena and other disaster-impacted areas on an
emergency basis to help residents, businesses, and community institutions to remain or return in the short term, and to ensure that financial institutions contribute to the economic health of California communities in the long term.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
In California, the federal, state, and local governments created segregation through redlining, zoning ordinances, school and highway siting decisions, and discriminatory federal mortgage policy. California’s “sundown towns,” like most of the suburbs of the City of Los Angeles and the City and County of San Francisco, prohibited African Americans from living in towns throughout the state. The federal government financed many Whites-only restricted neighborhoods throughout the state. The federal Home Owners’ Loan Corporation maps used in redlining described many California neighborhoods in racially
discriminatory terms. Numerous neighborhoods around the state rezoned African American neighborhoods for industrial use to keep out White residents or adopted zoning ordinances to ban apartment buildings to try to keep out African American residents. State agencies demolished thriving African American neighborhoods in the name of urban renewal, infrastructure development, and park construction.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The Task Force to Study and Develop Reparation Proposals for African Americans recommended that the Legislature provide compensation to redress the discriminatory harms eligible individuals experience from other predatory housing industrial complex issues, such as having to pay higher costs on insurance, due to race, ethnicity, nationality, or other contributing factors.
</html:p>
</ns0:Content>
</ns0:BillSection>
<ns0:BillSection id="id_09C04270-548E-4E04-ADC6-F63EDFB1EC75">
<ns0:Num>SEC. 2.</ns0:Num>
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Division 27 (commencing with Section 120000) is added to the
<ns0:DocName>Financial Code</ns0:DocName>
, to read:
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<ns0:Fragment>
<ns0:LawHeading id="id_D5F937C5-E5DC-4C6C-A47A-A0691C3BB426" type="DIVISION">
<ns0:Num>27.</ns0:Num>
<ns0:LawHeadingVersion id="id_DE98B43E-6387-4CFD-A9DC-D4026026F892">
<ns0:LawHeadingText>California Community Reinvestment Act</ns0:LawHeadingText>
</ns0:LawHeadingVersion>
<ns0:LawSection id="id_5C2C5E66-B1DA-4ED0-9E0D-0314213349A8">
<ns0:Num>120000.</ns0:Num>
<ns0:LawSectionVersion id="id_FB44810F-38C7-409E-959B-22694CF24D69">
<ns0:Content>
<html:p>This division may be known and cited as the “California Community Reinvestment Act.”</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_FA21271C-165C-45B1-8A65-E59E38DA4996">
<ns0:Num>120002.</ns0:Num>
<ns0:LawSectionVersion id="id_81EBEBCB-2A56-4BAB-B0E1-D5CEED05640E">
<ns0:Content>
<html:p>For the purposes of this division, the following definitions apply:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“Commissioner” means the Commissioner of Financial Protection and Innovation.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“Covered financial institution” means all of the following that are subject to the licensing laws of this state:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
A bank.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A credit union with assets exceeding seventy-five
million dollars ($75,000,000).
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
A residential mortgage lender that originated 200 or more loans in the two most recent consecutive years.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A money transmitter that sells or issues stored value, as defined in Section 2003.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
“Fund” means the Community Reinvestment Fund, as specified in subdivision (a) of Section 120028.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_A09937FF-1C4C-4F0F-B1E7-E30B04FF1CB0">
<ns0:Num>120004.</ns0:Num>
<ns0:LawSectionVersion id="id_24A570FB-D1D6-4512-B9CE-C7CB6DF68383">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
By January 1, 2027, and every three years thereafter, the commissioner, in collaboration with the Civil Rights Department, shall conduct a disparity study that does both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Identifies and delineates geographies in California exhibiting significant disparities across consumer, borrower, and neighborhood demographics with respect to access to financial products
or services and lending and investments by covered financial institutions.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Identifies financial policies, procedures, patterns, or practices that have or may have a disparate impact or discriminatory effect on underserved communities of color or other underserved communities, including, but not limited to, redlining maps, public or private decisions that disrupt communities, restrictive covenants, and discriminatory covenants, conditions, and restrictions.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
By January 1, 2028, the commissioner shall develop rules to implement the findings and other results from the disparity study required by subdivision (c) into the assessment process described in Section 120008 in order to encourage additional wealth-building and wealth-stabilizing investments, loans, and financial services in
communities that have historically suffered from discriminatory practices and unequal access to financial services.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The commissioner shall make the findings of the disparity study required by subdivision (c) available to the public.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_7EACE7BC-D05F-4D6F-ABA2-ECF426B105FB">
<ns0:Num>120006.</ns0:Num>
<ns0:LawSectionVersion id="id_F0884AAC-A723-43FC-BCAA-27F42564E320">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
Before January 1, 2029, a covered financial institution shall conduct an initial assessment to determine the financial services needs of local communities.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The covered financial institution shall solicit public input to be considered in the assessment required by subdivision (a).
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Upon completion of the assessment required by subdivision (a), the covered financial institution shall deliver, in writing, both of the following to the commissioner:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The assessment and evidence of the covered financial institution’s
satisfaction of subdivision (b).
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Any documentation submitted to comply with the federal Community Reinvestment Act (Chapter 30 (commencing with Section 2901) of Title 12 of the United States Code).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
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.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_CFD96A61-6875-4BD0-BBE2-0D07A9B7AAEA">
<ns0:Num>120008.</ns0:Num>
<ns0:LawSectionVersion id="id_27687CBF-3BD2-47FD-8E30-600F6F6444D6">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The commissioner shall assess the record of each covered financial institution in satisfying its obligation under Section 120004.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The assessment required by subdivision (a) shall be based on both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The business activities of the covered financial institution.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Any limitations on membership in the credit union charter, if
applicable.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The commissioner shall make public an assessment schedule at the beginning of each year and invite public comment related to a covered financial institution’s compliance with this division.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The commissioner shall notify a covered financial institution of the assessment schedule described in paragraph (1) before making the assessment schedule public.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
To the
extent practicable, the assessment required by this section shall be made concurrently with any other assessment or examination of the covered financial institution by the commissioner.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_DFD35CBB-9322-4036-AD9F-E6222EED894C">
<ns0:Num>120010.</ns0:Num>
<ns0:LawSectionVersion id="id_88C9DD47-7CDF-408E-9C87-E9DED874D8B1">
<ns0:Content>
<html:p>To assist in conducting the assessments required by Section 120008, 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:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
Activities to ascertain the financial services needs of the community, including communication with community members regarding the financial services provided.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Extent of marketing to make members of the community aware of the financial services and products offered.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The
current distribution of the institution’s branches among low-, moderate-, middle-, and upper-income geographies, and the institution’s record of opening and closing branches, particularly branches located in rural or low- and moderate-income geographies and neighborhoods of color.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The number of mortgage loan applications received and the number and dollar amount of mortgage loans originated.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
For purposes of this subdivision, mortgage loans include, but are not limited to, home purchase, home refinancing, 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.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The range of mortgage loan products offered, including, but not limited to, the offerings and origination of government-backed loans or loans featuring low downpayments or other features designed to facilitate lending to low- and moderate-income borrowers.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
Participation, including by making investments or grants, in programs designed specifically to meet the needs of low- and moderate-income communities, community development and redevelopment programs, affordable housing creation and preservation, workforce housing for low- and moderate-income workers in close proximity to jobs, low-cost education loans provided to low-income borrowers and as otherwise encouraged by the federal Community Reinvestment Act (Chapter 30 (commencing with Section 2901) of Title 12 of the United States Code), social housing, 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, government programs that accept private capital to support the elderly or disabled, programs that provide disaster preparedness, recovery, and relief efforts, climate resiliency 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.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Efforts working with delinquent customers to facilitate a resolution of the delinquency.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
For mortgage loans, the institution’s 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.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
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 120014.
</html:p>
<html:p>
(
<html:i>l</html:i>
)
<html:span class="EnSpace"/>
The racial, ethnic, and gender diversity of the institution’s board of directors and senior
management, to the extent that information is available to the commissioner.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
For a covered financial institution that is a depository institution, the institution’s use of reports from a specialty consumer reporting agency to determine eligibility for opening a bank account.
</html:p>
<html:p>
(n)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(o)
<html:span class="EnSpace"/>
Evidence of discriminatory and prohibited practices, including violations of consumer protection laws, fair housing and fair lending laws, or wage theft protection and labor laws, which shall result in a downgrade of the
rating given pursuant to Section 120014.
</html:p>
<html:p>
(p)
<html:span class="EnSpace"/>
An institution’s record of meeting community needs, as informed by public comment, including the institution’s responsiveness to needs of communities that have faced public and private discrimination, including the use of redlining, covenants, conditions, and restrictions to exclude residents based on race, or other discriminatory housing and lending practices.
</html:p>
<html:p>
(q)
<html:span class="EnSpace"/>
Low-cost investments, loans, or financial services that further community stabilization, antispeculation, right of return, or other support that benefits homeowners, tenants, small businesses, or community institutions impacted by disasters declared by the Governor, which shall result in an upgrade of the rating given pursuant to Section 120014.
</html:p>
<html:p>
(r)
<html:span class="EnSpace"/>
Hiring, contracting, or lending activities that support projects, programs, businesses, or other institutions that provide employment opportunities providing worker compensation, benefits, or career opportunities substantially above technical levels for the relevant industry, which shall result in an upgrade of the rating given pursuant to Section 120014 if there is a legally enforceable mechanism for the provision of those employment opportunities.
</html:p>
<html:p>
(s)
<html:span class="EnSpace"/>
An institution’s performance in relation to the demographics of the areas in which it has offices and other facilities and where it conducts substantial business.
</html:p>
<html:p>
(t)
<html:span class="EnSpace"/>
An institution’s performance in relation to its peers.
</html:p>
<html:p>
(u)
<html:span class="EnSpace"/>
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.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_0BE8AE61-62BA-41A6-A310-069AED7E342A">
<ns0:Num>120012.</ns0:Num>
<ns0:LawSectionVersion id="id_C6F1C939-1B20-4E90-8250-4470AB525BAE">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The commissioner and the commissioner’s 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).
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
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 as far as it is in their power.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
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 consumer protection, fair housing, and 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.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The commissioner may adopt rules with respect to the manner of examination, including the imposition of examination fees.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
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.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_C7DC3804-0C28-42BB-9FF5-7969C9A2564D">
<ns0:Num>120014.</ns0:Num>
<ns0:LawSectionVersion id="id_33ACE148-DFD1-48B9-91B1-B9F545F23B87">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
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 120008:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Outstanding.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
High satisfactory.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Satisfactory.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Needs to improve.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Substantial noncompliance.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The commissioner shall adopt
rules setting minimum thresholds or ranges of performance required for each rating described in subdivision (a) by type of covered financial institution.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_7B609D07-5BBD-49DD-BB12-A8D788D32D0C">
<ns0:Num>120016.</ns0:Num>
<ns0:LawSectionVersion id="id_622F15F5-B4DC-4F33-A993-3A03F58D531C">
<ns0:Content>
<html:p>Upon the completion of the assessment of a covered financial institution under Section 120008, the commissioner shall prepare a written evaluation of the covered financial institution’s 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:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
The assessment factors utilized to determine the covered financial institution’s descriptive rating.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The commissioner’s conclusions with respect to each assessment factor.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A discussion of the facts supporting the conclusions made under subdivision (b).
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The covered financial institution’s descriptive rating and the
basis therefor.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
A summary of public comments.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_8048A09E-8D35-415E-B845-EAF0BC151507">
<ns0:Num>120018.</ns0:Num>
<ns0:LawSectionVersion id="id_AFB77C45-408B-4E68-9317-6E4CFD3B3320">
<ns0:Content>
<html:p>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.</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_D1154B1E-AE7E-4B38-8A41-44531BA0692D">
<ns0:Num>120020.</ns0:Num>
<ns0:LawSectionVersion id="id_112D2D4E-C9F0-4304-A92C-B7724E2EC406">
<ns0:Content>
<html:p>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 institution’s 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.</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_29949BFE-E9E8-4C71-B01E-97535DA95AF9">
<ns0:Num>120022.</ns0:Num>
<ns0:LawSectionVersion id="id_39F9BA60-DD75-4792-A1D2-811CD75E6722">
<ns0:Content>
<html:p>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:</html:p>
<html:br/>
<html:p>“State of California Community Reinvestment Notice</html:p>
<html:p>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.”</html:p>
<html:br/>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_33192B25-9A30-46E6-9E80-4D9B9B5BA690">
<ns0:Num>120024.</ns0:Num>
<ns0:LawSectionVersion id="id_1C6A5D87-04BD-4EF8-833D-4B53665D770C">
<ns0:Content>
<html:p>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.</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_098D1ED3-44B3-4F7D-89D0-6B0480341AC7">
<ns0:Num>120026.</ns0:Num>
<ns0:LawSectionVersion id="id_C32C645E-0BA9-4809-BE60-79BBEBD5C1DB">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The commissioner shall prepare and submit annually to the Treasurer a list of covered financial institutions that have received a rating of “needs to improve” or “substantial noncompliance” pursuant to this division.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
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, be awarded a new state contract to provide financial services, or be awarded an extension of an existing state contract to provide financial services.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The Treasurer shall make every effort to avoid interrupting existing
services provided by a covered financial institution that is subject to subdivision (b).
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_BF09E42A-1B29-4E16-B242-EB710CCCBEFA">
<ns0:Num>120028.</ns0:Num>
<ns0:LawSectionVersion id="id_BDAD44DE-12F3-403E-8C1C-C83025464618">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
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 120004, including, but not limited to, a covered financial institution that receives a rating of “substantial noncompliance” in any two successive examinations.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
All moneys received in payment of administrative penalties under this section shall be deposited in the fund.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_1FC4DAEF-783B-44F1-99DE-8972C0A22ADC">
<ns0:Num>120030.</ns0:Num>
<ns0:LawSectionVersion id="id_D2112FF2-F14E-4C2B-A654-F756243FADC8">
<ns0:Content>
<html:p>The commissioner shall adopt regulations to implement this division.</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:LawHeading>
</ns0:Fragment>
</ns0:BillSection>
</ns0:Bill>
</ns0:MeasureDoc>
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