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Laws related to the requirements
that must be met prior opening of a bank in California. The sections below are the three most salient sections of the California Financial Code.
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It is a rather simple matter to open a bank in California.
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None of the requirements are the least bit difficult.
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Note that there is no minimum amount of money needed. See particularly -- Section 660 below
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You just have to show a reasonable promise of
successful operation.
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See more detailed information at: California Financial Code
“Commissioner” means the Commissioner of Financial Institutions
SECTION 361. Upon the filing of an application the commissioner shall make or
cause to
be made a careful investigation and examination relative to the following:
(a) The character, reputation, and financial standing of the organizers or incorporators
and their motives in seeking to organize the proposed bank or trust company.
(b) The need for banking or trust facilities or additional banking or trust facilities,
as the case may be, giving particular consideration to the adequacy of existing
banking or trust facilities and the need for further banking or trust facilities.
(c) The character, financial responsibility, banking or trust experience, and
business qualifications of the proposed officers of the bank or trust company.
(d) The character, financial responsibility, business experience, and standing
of the proposed stockholders and directors.
(e) Other facts and circumstances bearing on the proposed bank or trust company
and its relation to the locality as in the opinion of the commissioner may
be relevant.
SECTION
362. The commissioner may give or withhold his or her approval of the application
in his or her discretion, but he or she shall not approve the application until
he or she has ascertained to his or her satisfaction:
(a) That the public convenience and advantage will be promoted by the establishment
of the proposed bank or trust company.
(b) That the proposed bank or trust company will have a reasonable promise of
successful operation.
(c) That the bank is being formed for no other purpose than the legitimate objects
contemplated by this division.
(d) That the proposed capital structure is adequate.
(e) That the proposed officers and directors have sufficient banking or trust
experience, ability, and standing to afford reasonable promise of successful
operation.
(f) That the name of the proposed bank or trust company does not resemble, so
closely as to be likely to cause confusion, the name of any other bank or trust
company transacting business in this state or which had previously transacted
business in this state.
(g) That the applicant has complied with all of the applicable provisions of
this division.
NOTE: The items below are the only factors to consider with regard to adequate capital. (mrc)
SECTION
660. In determining for purposes of this division whether the shareholders’ equity of a bank or of a proposed bank is adequate, the commissioner shall consider:
(a) The nature and volume of the business of the bank;
(b) The amount, nature, quality, and liquidity of the assets of the bank;
(c) The amount and nature of the liabilities (including, but not limited to, any capital notes or debentures and any contingent liabilities) of the bank;
(d) The amount and nature of the fixed charges of the bank;
(e) The history of, and prospects for, the bank to earn and retain income;
(f) The quality of the operations of the bank;
(g) The quality of the management of the bank;
(h) The nature and quality of the ownership of the bank; and
(i) Such other factors as are in the opinion of the commissioner relevant.
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