General information

Legal
Topline Q4 2014

Filed an amicus letter to the California Supreme Court urging review of First California Bank v. McDonald, in which a lender’s right to a deficiency judgment was extinguished due to the “one action rule” (Code of Civil Procedure Section 726) when it failed to secure all co-borrowers’ consent to a short sale of one of the secured properties, even though there was no prejudice to the borrowers and the lender acted in good faith.  

CBA met with the commissioner of the California Department of Business Oversight and her staff, and filed a comment letter on the DBO’s proposal, published in October, to regulate subsidiaries of banks under the state’s California Finance Lenders Law. Among other things, the proposal suggests that the DBO will impose licensing and supervision requirements even on bank subsidiaries and affiliates that engage solely in commercial lending and leasing activities.  

Published Regulatory Compliance Bulletins on:

  • Assembly Bill 1770, which bolsters the standardized process to terminate a HELOC by requiring a beneficiary that provides a payoff demand statement to include in the demand the contact information for delivery of the newly created form instruction. The instruction is presented to the borrower for use to request closing the account.
  • Assembly Bill 1522, which requires employers to offer paid sick leave to employees who work for at least 30 days from the commencement of employment. 
  • The Internal Revenue Service’s final rule formally allowing (but not mandating) use of a “truncated taxpayer identification number” on any statement or other document that is required to be furnished to another person, such as Forms W-2 and W-9. The rule triggers mandatory compliance with California Civil Code Section 1798.85, which prohibits any person from printing an individual’s SSN on any materials that are mailed to the individual, unless state or federal law requires the SSN to be on the document to be mailed. 
  • Assembly Bill 1698, which provides that after a person has been convicted of procuring the filing or recording of false or forged instruments, the prosecuting agency may file a motion in criminal court to hold the false or forged document to be void ab initio (“from the beginning”) without the requirement of a quiet title action in the civil courts.

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