THE ASSEMBLY BANKING AND FINANCE
COMMITTEE IS CALLED TO ORDER
SERGEANTS. IF YOU WILL, PLEASE
CALL THE ABSENT MEMBERS. WE
DON'T HAVE A QUORUM YET, BUT WE
CAN'T START AS A SUBCOMMITTEE,
SO WELCOME TO THE ASSEMBLY
BANKING AND FINANCE COMMITTEE,
WHETHER YOU ARE HERE IN PERSON,
OR YOU'RE WATCHING VIRTUALLY I
AM VERY GRATEFUL THAT YOU HAVE
JOINED US HERE IN ROOM 4 44.
TODAY WE WILL ALLOW TESTIMONY IN
PERSON. I ALSO WANT TO NOTE THAT
WE ARE ACCEPTING WRITTEN
TESTIMONY THROUGH OUR POSITION
LETTER PORTAL ON THE COMMITTEE'S
WEBSITE. I DO WANT TO EXTEND A
WARM WELCOME TO OUR NEW MEMBERS
OF THE COMMITTEE,
ASSEMBLYMEMBER'S SORIA,
ASSEMBLYMEMBER'S WALDRON AND
ASSEMBLYMEMBER'S DIXON. WELCOME
TO THE BANKING AND FINANCE
COMMITTEE. I DO LOOK FORWARD TO
WORKING WITH YOU ALL AND WE'LL
HAVE AN EXCITING BANKING YEAR.
UH, NOT TOO EXCITED. YES I WOULD
LIKE TO, UH, I DO. I WOULD LIKE
TO EXTEND MY THANKS TO OUR VICE
CHAIR. ASSEMBLYMEMBER'S CHEN.
THE VICE CHAIR HAS BEEN A GREAT
PARTNER TO WORK WITH AND PROUD
TO BE UNDERSTAND SHOULDER TO
SHOULDER WITH YOU ON BANKING
ISSUES, AND I DO KNOW THAT WE
WILL GET A LOT DONE THIS YEAR.
EXCITING OR NOT. WE WILL. WE
WILL DO A LOT. SPEAKING OF
EXCITING A PERFECT SEGUE INTO MY
NEXT COMMENTS. I DO WANT TO MAKE
A FEW COMMENTS ABOUT THE
COLLAPSE OF SILICON VALLEY BANK
AND WHAT IT MEANS FOR THIS
COMMITTEE'S WORK. SILICON VALLEY
BANK'S FAILURE RAISES SERIOUS
SERIOUS CONCERNS ABOUT THE
BANK'S RISK MANAGEMENT
PRACTICES. THE EFFICACY OF
BANKING SUPERVISION AND THE
ADEQUACY OF BANKING REGULATIONS
. WE WILL BE INVESTING WHAT WE
WILL BE INVESTIGATING WHAT WENT
WRONG AND THE STEPS WE CAN TAKE
TO PREVENT A SIMILAR SITUATION
FROM HAPPENING AGAIN. THIS WILL
TAKE SOME TIME. BUT THIS WORK
WILL BE A MAJOR PRIORITY MOVING
FORWARD AND WITH THAT IT IS TIME
TO MOVE ON IN THIS HEARING, AND
I DO BELIEVE THAT WE HAVE ENOUGH
FOR A QUORUM. SECRETARY WOULD
YOU PLEASE CALL ROLE FOR QUORUM?
GRAYSON HERE. CHEN BARICAN.
CERVANTES DIXON DIXON HERE,
DIXON HERE, MIKE FONG, MY PHONE
GABRIEL PETRIE-NORRIS. SORIA.
ADRIN. WEEKS WILSON HERE. SO WE
DO HAVE A CORN CORN HAS BEEN
ESTABLISHED. OUR FIRST ORDER OF
OFFICIAL BUSINESS IS THE
ADOPTION OF COMMITTEE RULES.
THESE RULES WERE DISTRIBUTED TO
EACH OFFICE OF THE COMMITTEE
MEMBERS AND WERE APPROVED BY THE
CHIEFS CLERK OFFICE. REALLY THEY
ARE LARGELY THE SAME AS THE LAST
SESSION'S RULES. SO DO I HAVE A
MOTION FOR ADOPTION OF THE
COMMITTEE RULES MOVED BY MEMBER
WICKS AND SECONDED BY SOME OTHER
MEMBER FANG. SECRETARY. PLEASE
CALL THE ROLL. ON THE ADOPTION
OF THE COMMITTEE RULES, GRAYSON
HI. CHEN. BARICAN CERVANTES.
DIXON BY FANG. GABRIEL.
PETRIE-NORRIS SORIA. WALDRON.
WICKS. RIGHT, WILSON. SO THE
COMMITTEE RULES HAVE BEEN
ADOPTED AND WE WILL LEAVE IT
OPEN FOR ABSENT MEMBERS. PLEASE
NOTE THAT THESE RULES WILL BE
POSTED ONLINE ON THE COMMITTEE
WEBSITE. BEFORE WE PROCEED WITH
BILLS. WE DO WANT TO TAKE UP THE
CONSENT CALENDAR. WE HAVE ONE
BILL ON THE CONSENT CALENDAR
FILE. ITEM NUMBER THREE A. B 13
12, WHICH IS A COMMITTEE BILL.
DO I HAVE A MOTION FOR THE
CONSENT MOVED BY
ASSEMBLYMEMBER'S QUICK SECONDED
BY ASSEMBLYMEMBER'S WILSON
SECRETARY. PLEASE CALL THE ROLL.
GRAYSON. I CHEN CHEN I BARICAN
CERVANTES. DIXON AND I, MY FUNK,
I GABRIEL. PETRIE-NORRIS SORIA.
WALTON. SORRY. SO YEAH, I
WALDRON, WALT AND I WIGS I
WILSON WILSON. I. WE HAVE EIGHT
VOTES THAT CONSENT CALENDAR IS
ADOPTED. WE WILL LEAVE IT OPEN
FOR ABSENT MEMBERS AS WELL. WE
WILL NOW GO TO BILL
PRESENTATIONS FILE ITEM NUMBER
ONE, MAYBE 2 31 VICE CHURCH IN
YOU ARE UP FRONT AND CENTER. YOU
ARE PRESENTING ON A B 2 31 FILE
ITEM ONE AND THE RECOMMENDATION
IS DO PASS. THANK YOU, MR CHAIR.
THANK YOU. MEMBERS OF FIRST WANT
TO THANK YOU YOUR COMMUNITY FOR
WORKING SO HARD ON THIS BILL.
RESTRICTIONS IMPOSED ON GROUP
AND TRAVEL ACTIVITY. RESULT OF
COVID 19 PANDEMIC HAVE RELAYED
REVEALED THAT CERTAIN PROVISIONS
OF THE CODE RELATING TO THE
GOVERNANCE OF CALIFORNIA
CORPORATIONS HAVE NOT KEPT UP
WITH TECHNOLOGICAL ADVANCES.
EVEN THE ABSENCE OF EMERGENCY
THE LAST YEAR I CARE LEGISLATION
THAT AUTHORIZED REMOTE SHOULDER
SHAREHOLDER MEETINGS TO BE HELD
AT ANY PLACE AND PROVIDING
MEMBERS COULD PARTICIPATE
REMOTELY AND VOTE BY ELECTRONIC
TRANSMISSION BY INTO THE
CORPORATION. HOWEVER, THIS YEAR
WE WANT TO EXPAND ON THESE
PROVISIONS IN TWO WAYS. ONE WE
WANT TO GRANT SHAREHOLDER OR
PROXY HOLDER THE RIGHT TO CHOOSE
WHETHER TO PARTICIPATE VIA
AUDIO, VISUAL OR AUDIO ONLY
MEANS AND TO EXTEND THE
AFOREMENTIONED PROVISIONS ALL
NONPROFIT PUBLIC BENEFIT
CORPORATIONS. NONPROFIT MUTUAL
BENEFIT CORPORATIONS, NONPROFIT
RELIGIOUS CORPORATIONS AND
COOPERATIVE CORPORATIONS HOLDING
A MEETING OF MEMBERS. A B 231
AIMS TO ADDRESS THESE PROVISIONS
HERE TO TESTIFY. WE HAVE CAITLIN
SEVERIN, REPRESENTING THE
CALIFORNIA LAWYER ASSOCIATIONS.
THANK YOU. AND WE DO HAVE A
MOTION AND A SECOND. PLEASE GO
AHEAD. MY NAME IS CAITLIN
SABIRIN, AND I'M A PARTNER WITH
THE LAW FIRM DELFINO MADDEN HERE
IN SACRAMENTO CORPORATE ATTORNEY
AND I REPRESENT BOTH FOR PROFIT
AND NONPROFIT ORGANIZATIONS. I'M
HERE ON BEHALF OF THE NONPROFIT
ORGANIZATIONS AND CORPORATIONS.
COMMITTEES OF THE BUSINESS LAW
SECTION OF THE CALIFORNIA
LAWYERS ASSOCIATION, A SPONSOR
OF HB 2 31. MAYBE 2 31 WILL
AMEND THE CORPORATIONS CODE TO
PERMIT NONPROFIT PUBLIC BENEFIT
, MUTUAL BENEFIT RELIGIOUS AND
COOPERATIVE CORPORATIONS TO HOLD
FULLY REMOTE, REGULAR AND
SPECIAL MEMBER MEETINGS IN THE
SAME WAY THAT EXISTING LAW
ALLOWS FOR PROFIT CORPORATIONS
TO HOLD SHAREHOLDER MEETINGS
SOLELY BY ELECTRONIC MEANS. THIS
RIGHT IS SUBJECT TO THE SAME
SUNSET DATE AND CONDITIONS THAT
APPLY TO FOR PROFITS. REGARDING
THE ABILITY TO PARTICIPATE,
RECORDKEEPING AND VERIFICATION
OF INDIVIDUALS WHO VOTE
CHALLENGES AND ACCESSIBILITY
THAT AROSE DURING THE PANDEMIC
DEMONSTRATED THAT ALTHOUGH THE
LAW PROVIDED SOME FLEXIBILITY
FOR REMOTE MEETINGS DURING AN
EMERGENCY EXISTING LAW DID NOT
CONTEMPLATE THE ONGOING NEED FOR
SUCH FLEXIBILITY OUTSIDE OF THE
CONTEXT OF AN EMERGENCY. OVER
THE PAST FEW YEARS, ADVANCES IN
TECHNOLOGY AND THE ABILITY TO
ENGAGE MEMBERS AND CONTINUE
BUSINESS OPERATIONS REMOTELY
HAVE BEEN JUST AS VITAL TO
FURTHERING THE GOOD WORK OF
NONPROFIT AND COOPERATIVE
CORPORATIONS, AS IS THE CASE FOR
NONPROFIT FOR PROFITS. EXCUSE
ME. BUT THESE ADVANCEMENTS HAVE
OUTPACED WHAT IS PERMITTED BY
EXISTING LAW. THE COMMITTEE'S
ANALYSIS OF 82 31 ELABORATE ON
PRIOR LEGISLATION AND EXECUTIVE
ORDERS, BUT I WOULD LIKE TO
MENTION A B 7 69 INTRODUCED
SPICE. I REMEMBER GRAYSON
ENACTED IN 2022, WHICH PROVIDED
FOR PROFIT, NONPROFIT AND
COOPERATIVE CORPORATIONS, THE
MEANS TO HOLD REMOTE NON
EMERGENCY SHAREHOLDER OR MEMBER
MEETINGS. HOWEVER IT WAS ONLY
EFFECTIVE FROM MARCH 25TH.
THROUGH JUNE 30TH OF 2022. A B
17 80 INTRODUCED BY
ASSEMBLYMEMBER'S 10, ALSO IN
2022 ENABLED ENABLED CALIFORNIA
FOR PROFIT CORPORATIONS TO HOLD
FULLY REMOTE, NON EMERGENCY
SHAREHOLDER MEETINGS THROUGH THE
END OF 2025. BUT IT DID NOT
SIMILARLY ALLOWED NONPROFIT OR
COOPERATIVE CORPORATIONS TO DO
THE SAME. THE IMPACT OF A B 2 31
WOULD NOT BE INSIGNIFICANT. THE
MAGNITUDE OF NON PROFITS TO THE
STATE OF CALIFORNIA WAS NOTED IN
THE JUNE 2022 ANALYSIS. FROM THE
COMMITTEE ON ACCOUNTABILITY AND
ADMINISTRATIVE REVIEW REGARDING
A SPEECH 5 43, WHICH IS
INTRODUCED BY SENATOR LIMÓN.
EXCITING TO THE 2019 REPORT FROM
THE CALIFORNIA ASSOCIATION OF
NONPROFITS. NONPROFIT
ORGANIZATIONS RANKED AS THE
FOURTH LARGEST INDUSTRY IN
CALIFORNIA BY EMPLOYMENT. WITH
NEARLY ONE MILLION PEOPLE
EMPLOYED THROUGHOUT THE STATE,
AND THEY BRING IN APPROXIMATELY
$40 BILLION IN REVENUE TO
CALIFORNIA FROM OUT OF STATE
SOURCES. ADDITIONALLY TO HELP
INCREASE ACCESSIBILITY TO
NONPROFIT COOPERATIVE AND FOR
PROFIT CORPORATIONS. MAYBE 2 31
CLARIFIES THAT WITH RESPECT TO
FULLY REMOTE MEETINGS, THE
CORPORATIONS MAY OFFER AN AUDIO
ONLY MEANS BY WHICH A
SHAREHOLDER MEMBER OR PROXY
HOLDER MAY PARTICIPATE IN
ADDITION TO A REMOTE AUDIO
VISUAL FEED. IMPORTANTLY
PARTICIPANTS USE OF EITHER MEANS
MUST BE THEIR CHOICE. AND THE
CORPORATION MAY NOT IMPOSE ANY
BARRIERS TO EITHER MODE OF
PARTICIPATION. THIS ALLIANCE
WITH THE EXISTING PROVISIONS IN
THE CORPORATION'S CODE, WHICH
REFERENCED ELECTRONIC VIDEO AND
TELEPHONIC COMMUNICATION TO
PARTICIPATE IN MEETINGS. THIS
CONCLUDES MY REMARKS, AND I'M
AVAILABLE TO ANSWER ANY
QUESTIONS YOU MIGHT HAVE. THANK
YOU. THANK YOU VERY MUCH FOR
YOUR TESTIMONY. WE WILL NOW MOVE
TO WITNESSES IN SUPPORT. ARE
THERE ADDITIONAL WITNESSES IN
SUPPORT IN THE HEARING ROOM? IF
THERE ARE PLEASE STEP UP TO THE
MICROPHONE, STATE, YOUR NAME,
ORGANIZATION AND POSITION. GOOD
AFTERNOON. THIS ONE GOOD
AFTERNOON REALLY DEAL WITH THE
CALIFORNIA CREDIT IN LEAGUE IN
SPORT. THANK YOU. AND I SEE NO
OTHER RUSH TOWARD THE
MICROPHONE. SO WE WILL NOW MOVE
TO WITNESSES IN OPPOSITION. ARE
THERE ANY WITNESSES IN
OPPOSITION THAT IN THE HEARING
ROOM IF THERE ARE PLEASE STEP
FORWARD, SAYING NONE TO THE
COMMITTEE. LET'S ASK, UH, ARE
THERE ANY QUESTIONS FROM
COMMITTEE MEMBERS OR COMMENTS?
SEEING NONE. AUTHOR WOULD YOU
LIKE TO OFFER A CLOSING
STATEMENT? I RESPECT LAST DRIVE
. OH, THANK YOU, MR CHAIR.
ALRIGHT WITH THAT WE DO HAVE A
MOTION AND A SECOND SECRETARY.
PLEASE CALL THE ROLL. GRAYSON. I
RECENT I CHEN CHEN, I BARICAN
CERVANTES. DIXON I MIKE FONG
GABRIEL. PETRIE-NORRIS SORIA.
PETRIE-NORRIS. AYE. SORRY SORRY,
I WALDEN. WALDRON. I WIGS I
WILSON WILSON. AYE. THANK YOU.
THE BILL HAS NINE VOTES, IT GETS
OUT AND WE WILL HOLD IT OPEN FOR
ABSENT MEMBERS AND I WILL NOW
PASS THE GAVEL OVER TO NICE
CHAIR. MR.
NEXT BUILDING, FOLLOW THE HERD.
IS A B 116 FELL ITEM OR TO THE
RECOGNITION DO PASS THE
COMMITTEE TO APPROPRIATIONS
CHAIRMAN GRAYSON AT YOUR
PLEASURE. THANK YOU VERY MUCH
CHAIR AND THANK YOU FOR THAT
CONFIDENCE FROM MEMBERS. I AM
PLEASED TO PRESENT A B 11 16,
WHICH WILL UPDATE AND MODERNIZE
CALIFORNIA'S MONEY TRANSMISSION
LAW. IT IN IN RESPONSE TO THE
CONFERENCE OF STATE BANKING
SUPERVISORS, THEY UNDERWENT A
LENGTHY OR THE CONFERENCE FOR
STATE BANKING SUPERVISORS
UNDERWENT A LENGTHY STAKEHOLDER
PROCESS TO DEVELOP A MODEL LAW
TITLED THE MONEY TRANSMISSION
MODERNIZATION ACT. THIS PROCESS
INVOLVES SIGNIFICANT INPUT FROM
STATE REGULATORS, INCLUDING THE
DEPARTMENT OF FINANCIAL
PROTECTION AND INNOVATION. A K D
F P I. HERE IN CALIFORNIA. THIS
MONOLOGUE DEVELOP COMMON
STANDARDS AND DEFINITE EMISSIONS
THAT STATES CAN USE TO CREATE
CONSISTENCY ACROSS MANY
TRANSMISSION PROGRAMS. ONCE
BROADLY ADOPTED, THIS MODEL LAW
WILL EMPOWER STATE REGULATORS TO
WORK TOGETHER TO PROTECT
CONSUMERS. MAYBE 11 16 WILL
UPDATE THE CALIFORNIA MONEY
TRANSMISSION ACT WITH PROVISIONS
FROM THE MORAL LAW TO MAKE THE
PROGRAM WORK BETTER FOR THE FBI
AND LICENSES. THE BILL. ALSO THE
BILL MODIFIES OUR LAW IN KEY
WAYS, SUCH AS UPDATING
DEFINITIONS, MODIFYING THE NET
WORTH CALCULATION AND UPDATING
THE TYPES OF ELIGIBLE SECURITIES
A LICENSING CAN OWN IMPORTANTLY
, A B 11 16 DOES NOT ADOPT THE
MODEL LAW IN ITS ENTIRETY. THIS
IS BECAUSE THERE ARE CONSUMER
PROTECTIONS IN CALIFORNIA'S
MONEY TRANSMISSION ACT THAT ARE
STRONGER THAN OTHER STATES, AND
IT IS IMPORTANT TO KEEP THOSE
PROTECTIONS IN PLACE. LET ME
GIVE YOU AN EXAMPLE, FELLOW
MEMBER OR COMMITTEE MEMBER.
ASSEMBLYMEMBER'S BAUER-KAHAN
AUTHORED A BILL A FEW YEARS AGO
TO REQUIRE MANY TRANSMITTERS TO
HAVE ROBUST CUSTOMER SERVICE. A
B 11 16 KEEPS THAT CUSTOMER
SERVICE REQUIREMENT IN
CONCLUSION. 11 16 IS A GOOD
GOVERNANCE MEASURED THAT
EMBRACES REASONABLE CHANGES TO
CALIFORNIA'S MONEY TRANSMISSION
LAW TO MAKE ADMINISTRATION OF
THE PROGRAM. EASIER FOR
EVERYONE. THANK YOU. THANK YOU.
MR CHAIR WILL NOW MOVE ON TO
WITNESSES IN SUPPORT. WE HAVE
ANY WITNESSES SUPPORT. VICE
CHAIR CHAIR MEMBERS, RJ SAID
ABOUT THIS ON BEHALF OF THE
ELECTRONIC TRANSACTIONS
ASSOCIATION AND SUPPORT THANK
YOU. THANK YOU, MR CHAIR AND
VICE CHAIR COMMITTEE MEMBERS
MIKE THE LINES ON BEHALF OF INTO
IT AND SUPPORTED THIS MEASURE
AND LOOKING FORWARD TO WORKING
WITH THE AUTHOR AS WE MOVE
FORWARD. THANK YOU ANY OTHER
ONES THAT SUPPORT ANY WITNESSES
IN OPPOSITION? ALRIGHT SEEING
NONE GO AHEAD AND HEAD TO ANY
COMMITTEE MEMBERS WITH ANY
QUESTIONS FOR THE AUTHOR. NO
QUESTIONS. MR CHAIR WOULD LIKE
TO CLOSE. THANK YOU FOR
CONSIDERATION. SIMPLY ASKED FOR
AN I VOTE. THANK YOU VERY MUCH.
THANK YOU. WE HAVE A MOTION IN
THE SECOND. MADAM SECRETARY.
PLEASE CALL THE ROLL. MAYBE 11
16 DO PASS AND REFERRED TO
COMMITTEE ON APPROPRIATIONS.
GRAYSON. HI I CHEN CHEN. I
BARRACK CAN CAN I CERVANTES
AROUND HIS EYE. DICKSON DICKSON,
I MIKE FONG FONG, I GABRIEL
GABRIEL, I PETRIE-NORRIS
PETRIE-NORRIS. AYE, SORIA. BYE.
SORRY, I WALDRON WALDRON. I
WICKS. AYE WILSON WILSON. AYE.
BILL HAS 12 VOTES AND IT IS OUT
YOU WILL PULL IT OPEN. PERHAPS
THAT BILL HAS 12 VOTES. WE IT
DOES GET OUT. WE'LL HOLD IT OPEN
FOR ABSENT MEMBERS. AND
SECRETARY. WHY DON'T WE GO BACK
TO THE BEGINNING WITH RULES AND
. GO. WE'LL GO. WE'LL GO THROUGH
ROLL CALL FOR EACH ITEM AS ON
THE COMMITTEE ROLES. BARICAN.
CERVANTES SURROUND US, GABRIEL
GABRIEL HIGH PETRIE-NORRIS
PETRIE-NORRIS. AYE SORIA. SORRY
I WAS 12 VOTES. COMMITTEE RULES
HAS 12 VOTES AND IT GETS OUT
CONSENT. ON THE CONSENT COUNTER
A B 13 12 DO PASS BARICAN. CAN I
CERVANTES, THIS I GABRIEL.
GABRIEL I PETRIE-NORRIS
PETRIE-NORRIS I THAT HAS 12
VOTES. CONSENT. ASTRAL VOTES. IT
IS OUT. ITEM NUMBER. NUMBER ONE,
MAYBE 2 31 10. MAYBE 2 31. THE
MOTION IS DUE PASS. BARICAN CAN
I CERVANTES AROUND HIS EYE.
GABRIEL GABRIEL, I HAS 12 VOTES.
MAYBE 2 31 HAS 12 VOTES IT IS
OUT. AND THAT IS IT SUPER. WE
HAVE TAKEN CARE OF AND COMPLETED
OUR AGENDA FOR TODAY'S HEARING.
WE WILL BE LEAVING THE ROLE. IS
THERE ANY ANYONE ELSE? ROLE IS
DONE SO WITH THAT SIMPLY BANKING
AND FINANCE COMMITTEE IS
ADJOURNED. GLAD I COULD BE HERE
TO HAVE MY VOICE.