1. (a) The solicitation and acceptance by a proposed director, proposed officer, or organizer of a proposed subject institution from any proposed director, proposed officer, or organizer of such proposed subject institution of pre-opening funds for the proposed subject institution, provided:

   1. (1) No advertisement shall be published regarding the solicitation or acceptance of pre-opening funds.
   2. (2) The total number of persons from whom pre-opening funds for the subject institution are accepted shall not exceed 25.

   3. (3) No pre-opening funds shall be accepted from any person except pursuant to a written agreement which shall provide:

      1. (A) Terms under which the pre-opening funds are accepted.
      2. (B) Terms under which the pre-opening funds shall be held, including the name of the California commercial bank in which such money is to be deposited in accordance with Section 10.3405(a) of this Chapter and the name and address of the manager of the pre-incorporation pre-opening funds account.
      3. (C) Terms under which the pre-opening funds shall be disbursed, including a provision that the pre-opening funds shall be expended only for the purpose of paying pre-opening expenditures of the proposed subject institution.
      4. (D) Terms under which the pre-opening funds shall be repaid.
      5. (E) That the pre-opening funds, if expended for the purpose of paying pre-opening expenditures of the proposed subject institution, may not be repaid unless, among other contingencies, an application for authority to organize the subject institution is filed with and approved by the Commissioner, the subject institution is organized and is issued a certificate of authority to transact commercial banking business, trust business, or both, as the case may be, the subject institution, in case it is a commercial bank, becomes an insured bank, and pre-opening expenditures are assumed by the subject institution and, in the case of pre-opening noncapital expenditures, approved by the Commissioner; and that no assurance can be given that any of the foregoing contingencies will occur.
2. (b) The solicitation and acceptance by a proposed director, proposed officer, or organizer of a proposed subject institution from any commercial bank of pre-opening funds for such proposed subject institution.

There are hereby exempted from the provisions of Section 10.3401 of this Chapter as not being comprehended within the purposes of Section 10.3401 of this Chapter and the regulation of which is not necessary or appropriate in the public interest or for the protection of the public, the following transactions:

Note: Authority cited: Section 326, Financial Code. Reference: Sections 326 and 1040, Financial Code.

History

1. Change without regulatory effect amending section and adding new Note filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34).

2. Amendment of first paragraph and Note filed 9-14-2021; operative 1-1-2022 (Register 2021, No. 38).