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California bill proposes consolidating state regulators
SACRAMENTO, Calif. (12/4/08)--A California bill--Assembly Bill 33--proposes to consolidate all state financial industry regulators into one department, which is causing some concern for credit unions in the state. Current law provides for the licensing and regulation of banks, credit unions, and other financial institutions by the Commissioner of Financial Institutions; for the licensing and regulation of residential mortgage lenders and finance lenders by the Commissioner of Corporations; and for the licensing and regulation of real estate brokers by the Real Estate Commissioner. The bill would require the Secretary of Business, Transportation and Housing, in conjunction with the commissioners from the three agencies, to develop a plan to consolidate the operations and licensing frameworks of the three departments into a single department by Jan. 1, 2015. The plan would be submitted to the state legislature by Jan. 1, 2012. The bill would make legislative findings and declarations in that regard. Although the California Credit Union League doesn’t have an official position on the matter at this time, it does have some concerns, Keri Bailey, league director of state government affairs, told News Now. “Up until the late 1990s, all state financial regulators were consolidated under one group--the Department of Corporations,” Bailey said. “The league worked to make separation a reality in the late 1990s--to help make sure there were some firewalls [between regulations of credit unions and other financial institutions].” With that separation, the Department of Financial Institutions regulates about 400 entities--including credit unions--and the Department of Corporations regulates about 1,130 entities, Bailey said. With consolidation, “some issues would be of concern to credit unions; we’re different animals,” Bailey said. “Our folks like a regulator such as DFI that understands credit unions and how they function,” she added. “If there is just one ‘super regulator,’ that could be problematic. That move could create a risk of the uniqueness of credit unions being misunderstood or diluted, just through the sheer numbers [of entities regulated].”
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