In 2012, the State of California reorganized various state bodies, including those related to mortgage loans and licensing. Two new agencies were created to assume supervisory roles of the state’s mortgage loan industry. In the summer of 2013, the California Department of Business Oversight (DBO) was created. With its numerous oversight responsibilities related to the financial services industry in California, the DBO’s intended purpose is to protect all of the state’s consumers and business entities.
These responsibilities include:
- Supervision of licensees’ compliance with state and federal law;
- Enforcement of regulations by suspending, revoking, or refusing to renew a license of entities that violate the law;
- Ensuring registration of all state-licensed mortgage loan originators with the Nationwide Mortgage Licensing System (NMLS);
- Establishing a procedure that allows licensees to appeal the accuracy of NMLS database information related to the licensee;
- Reporting important, relevant information to the NMLS including violations of the law by licensees and any ensuing enforcement actions;
- Establishing a procedure for imposing civil penalties on individuals who act as mortgage loan originators without a license;
- Creating minimum net worth, surety bond requirements, or establish a recovery fund paid into by mortgage loan originators.
The DBO supervises the operations of state-licensed financial institutions such as banks, credit unions, and money transmitters. The DBO also licenses and regulates many other providers of financial services such as securities brokers and dealers, investment advisers, payday lenders and other consumer finance lenders.
The Department of Business Oversight has the responsibilities that are typical of any regulatory agency, including responsibilities to:
- Draft implementing regulations;
- Conduct examinations of regulated individuals and entities;
- Conduct investigations when there is evidence of any violations of the law;
- Conduct hearings for legal violations committed by licensees, as well as issue subpoenas and administer oaths for such hearings;
- Assess penalties for legal violations; and
- Issue cease and desist orders.
Consumers of financial services are encouraged by the California DBO to submit complaints if a DBO licensee has violated state law or if a company or person is conducting unlicensed activity within the jurisdiction of the DBO.
The attorneys at Glass & Goldberg in California provide high quality, cost-effective legal services, and advice for clients in all aspects of commercial compliance, business litigation, and transactional law. Call us at (818) 888-2220, send an email inquiry to email@example.com or visit us online at glassgoldberg.com to learn more about the firm and to sign up for future newsletters.