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The March 2020 DBO Bulletin focuses on COVID-19 and proposed regulations.

The California Department of Business Oversight (DBO) supervises, licenses and regulates a variety of financial institutions, including some real estate mortgage loan originators (MLOs) holding a Nationwide Multistate (or Mortgage) Licensing System & Registry (NMLS) license. Alongside the California Department of Real Estate (DRE), the DBO shares the responsibility for overseeing MLOs depending on their license use.

Continue reading for a rundown of March’s most important DBO happenings.

Coronavirus update

In light of the recent coronavirus (COVID-19) outbreak, the DBO reminds readers of the Centers for Disease Control and Prevention (CDC) recommendations for staying healthy and slowing the spread of COVID-19 in their course of business. The CDC recommends:

  • washing your hands with soap and water for at least 20 seconds;
  • practicing social distancing;
  • avoiding touching your eyes, nose and mouth;
  • staying home when you are sick;
  • disinfecting frequently touched surfaces; and
  • using protective facemasks only when showing symptoms of COVID-19.

Be sure to bookmark the first tuesday journal for the latest updates on how COVID-19 is impacting the real estate market and your clients.

Related article:

Are we heading toward a foreclosure crisis in 2020?

DBO Commissioner

The California State Senate voted to confirm Manuel P. Alvarez as the DBO Commissioner on February 24, 2020.

Alvarez has served as Commissioner since his appointment by California Governor Gavin Newsom on March 28, 2019. With the Senate’s confirmation, Alvarez’s title and role will be made official.

Before his appointment, Alvarez worked as Chief Compliance Officer for San Francisco tech startup Affirm Inc. since 2014. But Commissioner Alvarez is also a seasoned civil servant; he was an enforcement attorney at the Consumer Financial Protection Bureau (CFPB) from 2011 to 2014.

With his confirmation, Alvarez officially succeeds Commissioner Jan Lynn Owen, who served the DBO since its creation in 2013.

NASAA and COVID-19 scams

The fear and economic instability surrounding the COVID-19 outbreak has prompted the DBO and other securities regulators to issue a warning to readers about con artists running sophisticated coronavirus scams. In turn, the North American Securities Administrators Association (NASAA) has provided three rule-of-thumb questions to consider before making a new investment:

  • Is the investment guaranteeing a high return with little or no risk?
  • Is there a sense of urgency or scarcity tied to the investment?
  • Is the person offering the investment unlicensed and unregistered?

If you answer “yes” to any of these questions, the NASAA reminds investors that all investments carry a risk of loss. It’s wisest to walk away from high-pressure sales tactics and to avoid unregistered investment salespeople.

State Examination System

The Conference of State Bank Supervisors (CSBS) announced the rollout of the new State Examination System (SES), a single nationwide platform meant to connect state regulators and companies in the examination process. The CSBS expects the SES to improve transparency and collaboration, state regulator oversight of nonbanks and the examination process for both regulators and companies alike.

The SES rollout is an important milestone of Vision 2020, a CSBS initiative to modernize state regulation of nonbank financial companies. The tools created under this initiative, including the SES, are designed to protect consumers by facilitating greater understanding between regulators and financial institutions.

Comment period

The DBO is accepting comments on proposed regulations that clarify the agent-of-payee exemption in the Money Transmission Act (MTA). The Act exempts money transmitters from the license requirement for the activity of receiving money from a person for payment to another. The agent-of-payee exemption was added in response to new online payment technologies.

You can review the notice, text and initial statement of reasons for this proposition here. Submit your comment to regulations@dbo.ca.dov by the April 20 deadline.

The DBO also seeks comments on the proposed regulations that implement Assembly Bill 857, which allows California cities and counties to establish public banks through the DBO. Banks organized under AB 857 would be regulated by the DBO and FDIC just as privately owned banks are now. Read the full bill text here.

Access the DBO’s public comment request here, and submit your comment to regulations@dbo.ca.gov by the April 4 deadline.

And we’ve come to the end of another DBO Bulletin Digest! Don’t miss next month’s update; make sure to subscribe to the first tuesday Newsletter to get the latest real estate news and education straight to your inbox every week.

As always, you can read the full DBO bulletin on their website.