DBO to Licensees: “Thou Shalt Have A Dedicated Electronic Mailbox And Read Your Email Daily”

Late last month, Department of Business Oversight Commissioner Jan Owen issued an order requiring licensees to:

  • establish within their computer electronic mail system an electronic mailbox;
  • dedicate the email address to receiving communications from the DBO; and
  • monitor the mailbox daily.

The Commissioner’s order further requires that the mailbox have the capability of receiving attachments.  The Commissioner set a deadline of January 4, 2014 for compliance.

The order doesn’t provide a listing of the categories of licensees but the list of businesses licensed by the DBO is long.  It includes, among others, Banks; Broker-Dealers; Business and Industrial Development Corporations; Check Sellers, Bill Payers and Proraters; Credit Unions; Deferred Deposit Originators (aka “payday lenders”);  Escrow Agents; Finance Lenders; Money Transmitters; Investment Advisers; and Premium Finance Companies.  Licensees of the former Department of Financial Institutions that previously established mailboxes are not required to create new mailboxes but must update their security settings to ensure that emails are received.

The Commissioner also wants to make certain that licensees actually open their mailboxes.  Thus, she is ordering that mailboxes be “monitored daily by members of the licensee executive staff”.

Earlier this week, the Commissioner without any explanation posted this link on the DBO homepage to a portal allowing registration of the designated email.

One might question the Commissioner’s authority to issue this order.  The Commissioner’s authority is not centralized in a single statute, but is scattered amongst the many laws that she administers and enforces.  For example, Section 25610 provides that the Commissioner “may from time to time make, amend and rescind such rules, forms, and orders as are necessary to carry out the provisions of this law.” However, “this law” refers to the Corporate Securities Law of 1968.  Despite this express authority to issue orders, it’s not entirely clear that orders may be issued without compliance with the rulemaking provisions of the Administrative Procedure Act.  After all, Government Code Section 11342.600 defines “regulation” to mean “every rule, regulation, order, or standard of general application . . . adopted by any state agency to implement, interpret, or make specific the law enforced or administered by it, or to govern its procedure.”

 

Topics:  Department of Business Oversight, Email, Licenses

Published In: General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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