The Commissioner finds that the requirements of Section 502 of the Financial Code are not necessary in the cases described in the subdivisions of this Section. Accordingly, the Commissioner grants exemptions from Section 502 of the Financial Code, as follows:
(a) A California state bank is exempted from the requirement of filing an audit report for a fiscal year with the Commissioner pursuant to Section 502 of the Financial Code if the bank complies with the following provisions:
(1) Within 90 days after the end of the fiscal year or within such extended period as the Commissioner may prescribe, the bank shall obtain an audit report complying with the provisions of Subdivision (c) of Section 502 of the Financial Code and of Section 10.19402 of this Chapter; and
(2) The bank shall keep the audit report in its files for a period of not less than two years after the end of the fiscal year or such longer period as the Commissioner may prescribe.
(b) A California state bank which is a subsidiary of a parent is exempted from the requirement of filing an audit report for a fiscal year with the Commissioner pursuant to Section 502 of the Financial Code if the parent and the bank comply with the following provisions:
(1) The parent and the bank shall have the same fiscal year;
(2) Within 90 days after the end of the fiscal year or within such extended period as the Commissioner may prescribe, the parent shall obtain an audit report that complies with the following provisions:
(A) The audit report shall contain (1.) audited, consolidated financial statements (including balance sheet, statement of income or loss, statement of shareholders' equity, and statement of cash flows) of the parent for or as of the end of the fiscal year prepared in accordance with generally accepted accounting principles and (2.) any other information that the Commissioner may require.
(B) The audit report shall be based upon an audit of the parent on a consolidated basis conducted in accordance with generally accepted auditing standards and any other requirements that the Commissioner may prescribe;
(C) The audit report shall be prepared by an independent certified public accountant or independent public accountant who is not unsatisfactory to the Commissioner; and
(D) The audit report shall include or be accompanied by a certificate or opinion of the independent certified public accountant or independent public accountant that is satisfactory in form and content to the Commissioner; and
(3) Immediately after obtaining the audit report, the parent shall provide a copy of the audit report to the bank, and the bank shall keep the copy in its files for a period of not less than two years after the end of the fiscal year or such longer period as the Commissioner may prescribe.
1. New section filed 3-18-98 as an emergency; operative 3-18-98 (Register 98, No. 12). A Certificate of Compliance must be transmitted to OAL by 7-16-98 or emergency language will be repealed by operation of law on the following day.
2. Certificate of Compliance as to 3-18-98 order transmitted to OAL 7-16-98 and filed 8-20-98 (Register 98, No. 34).
3. Change without regulatory effect amending section and Note filed 8-21-2019 pursuant to section 100, title 1, California Code of Regulations (Register 2019, No. 34).
This database is current through 4/26/24 Register 2024, No. 17.
