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What Does The DBO Regulate?

The Department of Business Oversight is more than a securities regulator.  When I headed the Department of Corporations, it was also a health care regulator - administering and enforcing California's Knox-Keene Health Care Service Plan Act of 1975, Cal. Health & Safety Code § 1340 et seq.  That authority was later transferred to the newly created Department of Managed Health Care.  In 2013 the Department of Corporations and the Department of Financial Institutions  had merged to form the Department of Business Oversight.  In my estimation, the merger was, and remains, a mistake that has done little to improve the regulatory oversight of the former departments. 

Given this history, it should be no surprise that the DBO's oversight is divided between the Division of Corporations and the Division of Financial Institutions.  Broadly speaking, the Division of Corporations is a disclosure oriented regulator while the Division of Financial Institutions is primarily a prudential regulator.  Below is a list of the laws administered by each of these divisions.

Division of Corporations

Division of Financial Institutions

Broker-Dealers and Investment Advisers

Banks

California Deferred Deposit Originators (commonly known as “Payday Lenders”)

Business and Industrial Development Corporations (BIDCO)

California Finance Lenders

Credit Unions

California Residential Mortgage Lenders

Foreign (Other Nation) Banks

Capital Access Company Law

Foreign (Other State) Banks

Check Sellers, Bill Payers and Proraters

Industrial Banks

Escrow Agents/ Escrow Law

Local Agency Security Program

Franchises (Franchise Investment Law)

Money Transmitters

Mortgage Loan Originators

Premium Finance Companies

PACE (Property Assessed Clean Energy) Program Administrators

Trust Companies and Departments

Responsible Small Dollar Loans (Pilot Program)

 

Securities (Corporate Securities Law of 1968)

 

Student Loan Servicers

 

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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...

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