TO ORDER MADAM SECRETARY PLEASE
CALL THE ROLL.
SENATOR BRADFORD PRESENT AND FOR
HERE CHIANG.
THANK HERE CABALLERO.
SO HERE RAZA.
RATHER HEAR MYSELF [inaudible]
PORTANTINO.
A QUORUM IS PRESENT.
WE HAVE FOUR ITEMS TO PICK UP TO
DA WE HAVE. ONE ITEM ON CONSENT
SO WE CAN GET EMOTIONALLY LET'S
DISPENSE WITH THE CONSENT WE
HAVE A MOTION BY SENATOR DRAWS
SO.
IT'S TO PASS -- STILL.
I'M SECRETARY PLEASE CALL THE
ROLL ON A. B..
NINE THIRTEEN MOTION IS TO PASS
TO APPROPRIATIONS CONSENT
CALENDAR BRADFORD.
HI.
I CHANGE TIME.
I HAVE A I DON'T.
HAVE A ERROR I DURAZO.
PRESENT I BY SO.
BROWN [inaudible]
PORTANTINO.
THAT MOTION ON CALL RON NEXT UP
IS SOONER -- MEANS SENT A
SEMINAL DONALD.
AB -- THIRTEEN EIGHTY FOUR
SIMONE IF YOU'RE READY WILL.
TAKE THAT MEASURE.
ARE YOU READY MISTER CHAIR WE'RE
READY I THANK YOU MISTER CHAIR
AND COMMITTEE MEMBERS.
I AM PLEASED TO PRESENT AB
THIRTEEN EIGHTY FOUR WHICH WILL
ADD A DEFINITION OF CONSUMER
CREDIT TRANSACTION TO CURRENT
LAW TO CLARIFY AND SUPPORT THE
LONGSTANDING INTERPRETATION.
THAT THE COVERED LOAN LAW DOES
NOT INCLUDE BUSINESS PURPOSE
LOANS.
IN TWO THOUSAND ONE THE
LEGISLATOR CREATED CALIFORNIA'S
COVERED LOAN LAW.
RESPONSE TO CURRENTS CONCERNS
OVER PREDATORY BRIDGES BUSINESS
PRACTICES INVOLVING CONSUMER LE
CONSUMER LOANS.
THIS LOSS SAID OUT SEVERAL
RESTRICTIONS TO READ HIGH
INTEREST RATES AND FEES ON
CONSUMER LOANS.
TODAY THE VAST MAJORITY OF
MORTGAGE BROKERS SIMPLY CHOOSE
NOT TO ARRANGE LOANS UNDER THE
COVERED LOAN LINE.
LOAN LAW AS THE RESTRICTIONS
MAKE IT DIFFICULT TO ARRANGE A
PROFITABLE ALONE.
IN A RECENT AUDIT OF A MORTGAGE
BROKER BY THE DEPARTMENT OF REAL
ESTATE ARMAND DETERMINED THAT
ALONE TAKEN OUT FOR A BUSINESS
PURPOSE COULD STILL BE
CONSIDERED A CONSUMER LOAN.
UNDER THE CALIFORNIA.
COVERED LOAN LAW.
CONSUMER LOMA.
THE DR A REACH THIS DECISION
BECAUSE THE DEAD DEFINITION OF
CONSUMER LOAN.
UNDER THE COVERED LOAN LAW DOES
NOT SPECIFY THAT THE LOAN BE
INTENDED FOR ANY SPECIFIC
PURPOSE.
THIS IS CONTRARY TO EVERY OTHER
PART OF THE FINANCIAL CODE.
WHERE THE DEFINITION OF CONSUMER
LOAN SPECIFIES THEY ARE
PRIMARILY FOR PERSONAL FAMILY OR
HOUSEHOLD PURPOSES?
IN ORDER TO ENSURE CONSISTENCY
THROUGHOUT THE FINANCIAL CODE.
AND TO ENSURE BUSINESS PURPOSE
LOANS CONTINUE BEING OFFERED
BECAUSE THEY ARE IMPORTANT.
AB THIRTEEN EIGHTY FOUR
CLARIFIES THE CONSUMER LOANS
CREATED UNDER THE COVERED LOAN
LAW.
ONLY INCLUDE THOSE THAT ARE
PRIMARILY FOR PERSONAL FAMILY OR
HOUSEHOLD PURPOSES.
AND WITH ME HERE TODAY IS TO
TESTIFY TODAY IS A MIKE BELOW
WITH THE CALIFORNIA MORTGAGE
ASSOCIATION.
MISTER CHAIR.
THANK YOU MR CHAIRMAN MEMBERS WE
REALLY VIEW THIS AS A CONFORMITY
ISSUE THROUGHOUT THE FINANCIAL
CODE THE CIVIL CODE.
FEDERAL LAW IN RAGS HE AND THE
TRUTH IN LENDING ACT THEY ALWAYS
DEFINE.
CONSUMER CREDIT TRANSACTION IN
THE SAME WAY THAT I A LOAN
INTENDED PRIMARILY FOR PERSONAL
FAMILY OR HOUSEHOLD PURPOSES.
WE ALL OF EXECUTED SUCH LOANS IN
THE MORTGAGE WORLD AND CAR
LEASES AND ALWAYS ASKS IS THIS
FOR A BUSINESS PURPOSE.
OR IS THIS FOR A PERSONAL FAMILY
OR HOUSEHOLD PURPOSES.
THIS WAS OUR UNDERSTANDING FOR
TWENTY YEARS AS FAR AS WE CAN
TELL THE DEPARTMENT A REAL
ESTATE HAS NEVER INTERPRETED THE
LAW.
THIS WAY UNTIL RECENTLY AND SO
WE BELIEVE THIS IS A
CLARIFICATION MANY OF THESE
LOANS INVOLVED.
A LOAN AGAINST A PERSON'S HOUSE
TO FIX AND PICK UP.
FIX AND FLIP ANOTHER HOUSE BILL
SOME OF THESE LOANS DO CREATE
HOUSING AND MODERNIZE HOUSING WE
THINK IT'S AN IMPORTANT AREA OF
COMMERCE BUT IT DOESN'T.
WE THANK HISTORICALLY BELONG IN
THE COVERED LOAN LAW.
SO WE WOULD ASK FOR AN AYE VOTE
HAPPY TO ANSWER ANY QUESTIONS.
ANY ADDITIONAL WITNESSES IN
SUPPORT.
WITH THIS IN OPPOSITION.
TING HEARING ON BRING IT BACK TO
COMMITTEE ANY QUESTIONS FOR THE
COMMITTEE SENATOR CAFIERO.
THAT LAST EXAMPLE JUST TO HAVE A
BROADER QUESTION AND THE
QUESTION I HAVE IS IT IS IT.
IS IT -- IS WITH THE CHANGE
MEANS THAT IF YOU'RE BORROWING
ON A HOME.
IF TO FLIP A HOME BECOMES A
BUSINESS.
TRANSACTION BORROWING ON YOUR
HOUSE TO BUY A AND FLIP ANOTHER
THAT WOULD BE A BUSINESS PURPOSE
LOAN YES YOU ARE NOW A REAL
ESTATE INVESTOR.
AS A AS OPPOSED TO BY BUYING IT
FOR YOUR OWN PURPOSE RIGHT TO BE
EXACTLY RIGHT.
MY QUESTION IS WHAT HAS LED TO
THIS MISINTERPRETATIONS OF SPEAK
THAT IT'S YOU SAY IT'S BEEN IN
EXISTENCE AND NOW WHY.
THEY'VE BEEN AUDITING AND MISTER
CHAIR -- REAL ESTATE BROKERS IN
INVOLVED IN THIS SORT OF
COMMERCE FOR EVER.
AND THE THIS IS THE FIRST TIME
THIS HAS EVER HAPPENED WE MET
WITH THE DEPARTMENT OF REAL
ESTATE THE OTHER DAY THEY SAID
WELL.
WE KNOW THAT IT'S TO FIND IN THE
FINANCIAL CO THE CIVIL CODE
FEDERAL LAW IT'S NOT DEFINED IN
THE COVERED LOAN LAW.
SO WITHOUT THAT THE
CLARIFICATION WE E CHOOSE TO
APPLY ANOTHER DEFINITION.
WE ASK HIM TO RECONSIDER AND WE
SAID WE WOULD BE RESOLVING IT
LEGISLATIVELY AND THEY SAID THEY
WOULD WORK WITH US ON THAT.
THE CITY WHAT WOULD WORK WITH US
I'M NOT HERE TO REPRESENT THAT
THEY HAVE A POSITION -- HAVE
SAID EITHER WAY.
NEED TO SOME QUESTIONS BY.
COMMITTEE MEMBERS -- HOURS
SEEKING A EMOTIONALLY -- HOUSE
TO RULES.
BEEN MOVED BY SENATOR CHIANG
MADAM SECRETARY PLEASE CALL THE
ROLL.
SENATOR OF MOTION IS DUE PASSED
TO RULES.
SENATOR BRADFORD HI BRADFORD AYE
KING.
I AM I ERA.
I DURAZO.
DRESSER I WAS SO [inaudible]
WELL [inaudible]
PORTANTINO [inaudible]
PORTANTINO HI.
MEASURE HAS SIGNIFICANT ONCE YOU
GET OUT WILL BE THE ROLE OPEN
FOR ABSENT MEMBERS THANK YOU.
MISTER O'DONNELL.
NEXT UP IS THE ROOM AND QUIRK
SILVA.
YOU HAVE ITEM ON AB.
OR TWELVE ALONG WITH ESCROW
AGENTS SO WHEN YOU'RE READY YOU
MAY PROCEED.
GOOD AFTERNOON MISTER CHAIR AND
SENATORS THANK YOU FOR ALLOWING
ME TO PRESENT AB FOUR ONE TWO ON
LEASE OBLIGATIONS.
THIS BILL IS INTENDED TO HELP
CALIFORNIANS.
INDEPENDENT ESCROWLICENSES
CONTINUE TO BE ABLE TO PROVIDE
THEIR NECESSARY AND VALUABLE S.
PRO SERVICES TO THE PUBLIC
SOUTHERN CALIFORNIA HAS QUITE A
FEW OF THESE IN OUR AREA.
AB FOR TWELVE WOULD EXEMPT
INDEPENDENT ESCROW LICENSES FROM
A CHANGE IN ACCOUNTING
GUIDELINES AS ADOPTED BY THE
FINANCIAL ACCOUNTING STANDARDS
BOARD.
I CHANGE WHICH WOULD INCREASE
THEIR FINANCIAL RESERVES BY
ALMOST THREE TO FOUR TIMES THE
CURRENT AMOUNT REQUIRED BY LAW.
THIS WOULD RESULT IN FIRMS
THROUGHOUT CALIFORNIA UNABLE TO
MAINTAIN THEIR LICENSES AND
PROVIDE ESCROW SERVICES.
NOTABLY SMALL BUSINESSES IN
INDEPENDENT FIRMS WHO WE KNOW
BEAR A DISPROPORTIONATE.
DISPROPORTIONATE REGULATORY
BURDEN WOULD BE VERY MUCH
IMPACTED I HAVE WITH ME TODAY.
THREE WITNESSES WE HAVE WRONG
KINGSTON.
FROM THE ESCROW INSTITUTE WE
HAVE PJ GARCIA SENIOR VICE
PRESIDENT AT THE ICY AND MICHAEL
HAAS FROM CPA -- TO HEAR SOME
COMMENTS.
MR CHAIRMAN MEMBERS EQUITY RON
KINKS IN REPRESENTING THE ESCROW
INSTITUTED CALIFORNIA THANK YOU.
FOR DURING THIS BILL TODAY AB.
FORTY TWELVE RETAINS THE DECK.
EXCUSE ME THE DECADES LONG LEASE
ACCOUNTING STANDARDS.
KEEP IT AS IS THE REASON FOR
THIS.
IS THAT THE FINANCIAL ACCOUNTING.
I STANDARDS BOARD FASB IF YOU
WELL.
ARE AN INTERNATIONAL AUTHORITY.
OVER FINANCIAL. FOR NON
GOVERNMENTAL.
AGENCY RECENTLY UPDATED ITS
ACCOUNTING STANDARDS.
JUST TO MODIFY HOW.
THESE ENTITIES REFLECT LEASES ON
THEIR BALANCE SHEET.
THE NEW INTERNATIONAL ACCOUNTING
STANDARD.
IGNORES ALL THE CALIFORNIA
CONSUMER PROTECTION LAWS THERE
ARE.
AND IF WE FAIL TO ACT TODAY.
AND THE BILL FAILS TO BE SIGNED
INTO LAW.
THE IMPACT WILL BE DEVASTATING
ON S. INDEPENDENT ESCROW
COMPANIES IT WILL REQUIRE ALL OF
THESE COMPANIES [inaudible] TWO
AS OF DECEMBER FIFTEENTH THIS
YEAR. TO PUT IN A SEPARATE BANK
ACCOUNTS.
ALL THE RELEASE OBLIGATIONS FOR
THEIR CURRENT YEAR.
AND NEVER TOUCH IT FOR ANY
REASON.
THEY CAN'T USE IT TO PAY
SALARIES THAT CAN'T USE IT. TO
EVEN MEET THEIR LEASE
OBLIGATIONS THEY CAN'T USE THAT
TO PAY FOR OFFICE SPACE LEASES
NOTHING.
YOU LEAVE IT ALONE AND THAT BANK
ACCOUNT.
ALL THAT MUCH MONEY REALLY QUITE
FRANKLY IS NECESSARY
[inaudible] FOR THE COMPANIES
TO MEET THEIR FINANCIAL
OBLIGATIONS THIS CREATES AN
UNLEVEL PLAYING FIELD.
AND WHAT WE SEE IS THIS IS NO
SMALL AMOUNT OF MONEY FOR EACH
OF THE SMALL INDEPENDENT.
BOB OWNED ESCROW COMPANIES IT'S
ABOUT SEVENTY FIVE THOUSAND TWO
HUNDRED THOUSAND DOLLARS. FOR
ESCROW COMPANY LOCATION.
WHICH THEY CAN NEVER EVER TOUCH
WITHOUT.
AB FOR TWELVE SMALL BUSINESS
FORMATION [inaudible]
EXPANSION.
ANY IMPROVEMENT WON'T HAPPEN.
AFTER ALL IT IS OUR FEELING THAT
IF IT AIN'T BROKE DON'T FIX IT.
WE WANT TO KEEP THE EXISTING
ACCOUNTING STANDARDS FOR LEASES
JUST THE SAME AS IT HAS BEEN FOR
DECADES.
WITH ME TODAY -- IS PJ GARCIA A
LONG STANDING MEMBER.
OF THE ASSOCIATION AND A SMALL
BUSINESS OWNER AND WELL AS
MICHAEL HAWS A CPA WITH A
TREMENDOUS AMOUNT [inaudible]
OF KNOWLEDGE.
THAT HAS DEVELOPED OVER THE LAST
SEVERAL YEARS KNOWING THIS
INTERNATIONAL ACCOUNTING
STANDARDS.
THANK YOU MISTER CHAIRMAN AND
COMMITTEE MEMBERS MY NAME IS PJ
GARCIA AND I'M THE OWNER OF
BEACH PACIFIC GAS GROWING
HUNTINGTON BEACH CALIFORNIA.
I'M HERE ON BEHALF OF VESTER
INSTITUTE OF CALIFORNIA'S THE
SENIOR VICE PRESIDENT.
AB TWELVE SIX TO RETURN TO
RETAIN THE EXISTING LEASE
ACCOUNTING STANDARD AS IT IS
TODAY.
BEFORE THE INTERNATIONAL
STANDARDS ARE TAKE AFFECT.
IMPORTANCE OF RICK CURRENT
LIQUIDITY COM COMPUTATION BY
REMOVING THE AMOUNT OF THE LEASE
OBLIGATIONS.
FROM THE DEFINITION OF CURRENT
LIABILITIES CANNOT BE OVERSTATED.
IF THE NEW INTERNATIONAL
ACCOUNTING STANDARDS HAD BEEN IN
PLACE WHEN I OPENED MY BUSINESS
TWENTY NINE YEARS AGO IT'S
LIKELY THAT I WOULD NOT HAVE
BEEN ABLE. TO DO THAT BECAUSE
THE THE OUR CAPITAL.
CAPITAL INVESTMENT WOULD HAVE
BEEN TOO HIGH.
AND THEN I WOULD BE A SMALL
BUSINESS OWNER TODAY.
CURRENTLY OF THERE ARE SIX
HUNDRED SEVENTY FIVE LICENSE
DOES FOR COMPANIES IN CALIFORNIA.
WHO ARE PREDOMINANTLY WOMEN
OWNED BUSINESSES SMALL
BUSINESSES?
EMPLOYEE APPROXIMATELY SEVEN
THOUSAND CALIFORNIANS AT LEAST
90% OF WHOM ARE WOMEN.
HISTORICALLY MOST AS FOR
COMPANIES ARE OWNED BY PEOPLE
WITH MY STORY.
YOU CAME THROUGH THERANKS AND
LEARN THEIR PROFESSION ON THE
JOB.
SINCE THE NINETEEN SIXTIES AS
FOR JOBS HAVE BEEN IN ECONOMIC
UP OPPORTUNITY FOR WOMEN IT DOES
NOT REQUIRE A COLLEGE DEGREE.
AND AS A PROFESSION WHERE YOU
GET ON THE JOB TRAINING.
LIKE MANY OF MY COLLEAGUES I
STARTED.
MY CAREER AT THE AGE OF NINETEEN
AS A RECEPTIONIST WITH NO
TRAINING NO AND NO.
BACKGROUND OR TRAINING IN ESCROW.
TEN YEARS LATER I OPEN MY OWN
COMPANY.
AT WHICH TODAY LIKE MANY OTHER
SMALL BUSINESSES AND UP ON BY MY
COLLEAGUES IS NOW MULTI
GENERATIONAL.
WE WOULD ASK FOR YOUR VOTE.
YET TO YOU TO VOTE YES ON A
BEFORE TWELVE TO PRESERVE THE
CURRENT.
LEASE ACCOUNTING STANDARD THAT
HAS WORKED WELL FOR DECADES.
CONSUMERS REGULATORS CPA'S AND
LICENSEES THANK YOU.
THANK YOU MISTER CHAIRMAN
MEMBERS OF THE OF THE COMMITTEE
THANK YOU FOR LETTING ME BE HERE
TODAY.
JUST AS A BRIEF CONTEXT.
OF THE SIX HUNDRED SEVENTY FIVE
ESCO COMPANIES WE REPRESENT
ABOUT A HUNDRED SEVENTY OF THEM
OR WE DO THE CERTIFIED AUDITS.
AND OUR FIRM HAS BEEN DOING THEM
SINCE THE FIFTIES SO WE ARE VERY --
INTIMATELY KNOWLEDGEABLE WHAT'S
GOING ON AS FOR FAST BEEN IN
THIS WHOLE LEASE ACCOUNTING
STANDARD -- THAT'S CAME CAME
ABOUT IN THE CONVERSATION I'VE
HAD WITH MEMBERS OF THE OF THE
BOARD.
OVER THE LAST TEN YEARS AS A
SWEEPING IMPLEMENTED.
THEY UNDERSTOOD THAT THE THE THE
INVOLVEMENT WITH BARS TO LENDERS
AND COVENANTS WITH LOAN
COVENANTS AND AND WHY THEY PUT
TOGETHER THIS LONG
IMPLEMENTATION PERIOD.
AND I RAISE THE QUESTION WITH
THEM WHAT ABOUT REGULATORY
COVENANTS.
AND THE RESPONSE WAS THEY FELT
THAT THE REGULARS WOULD TAKE IT
INTO CONSIDERATION TO WORK WITH
THE SPECIFIC LICENSEES AND
THAT'S THE CONCERN THAT'S A
CONCERN TODAY.
WHAT THE BILL WOULD DO WOULD
IT'S NOT GONNA CHANGE ACCOUNTING
STANDARDS RELATIVE TO HOW WE'RE
GOING TO DO HOW HOW THE
COMPANIES WILL DO THEIR BALANCE
SHEETS?
OR HOW ORGAN AUDIT THE BALANCE
SHEET AND SO ON IT'S JUST
REMOVED THIS NEW -- AMOUNT THE
SHOWING UP IN THE CURRENT
LIABILITIES FOR LEASE
OBLIGATIONS.
FROM THE COMPUTATION OF THE
LIQUID ASSETS REQUIREMENT UNDER
FINANCIAL CODE SECTION.
SEVENTEEN TO TEN AND SO IT'S NOT
IT'S NOT GOING TO BE DOING
ANYTHING INJURIOUS TO THE
FINANCIAL STATEMENTS IT'S JUST
AS AS MISTER SCEA MISTER
KINGSTON.
HAVE HAVE SPOKEN ABOUT THE TO
THESE LICENSEES.
IT'S GOING TO ALLOW THEM NOT TO
BE.
SO TO SPEAK INJURED BY HAVING TO
HAVE A HIGHER LIQUIDITY
REQUIREMENT.
THAT HASN'T COME ABOUT BY A
PASSAGE OF OF DIFFERENT
LEGISLATION SO ON IT WAS JUST A
TRYING KEEP.
THEIR LIQUOR REQUIREMENT STATUS
QUO OF WHAT IT HAS BEEN.
AND AND AND TO JUST FROM OF THIS.
ONE ELEMENT THAT'S COMING IN THE
CURRENT LIABILITIES FROM THE
DEFINITION OF PUBLIC WITH US
REQUIREMENTS.
THANK YOU AND YOU TO SHOW
WITNESSES IN SUPPORT.
SHOW YOU CAN TAKE THE MIKE STATE
YOUR NAME ORGANIZATION.
MISTER CHAIRMAN AND COMMITTEE
MEMBERS ON L'ISOLA CHOIR I OWN
CITRUS ESCROW LOCATED IN MARINO
VALLEY IN BEAUMONT -- I EMPLOY
TEN WOMEN I'M A DISABLED VETERAN
SMALL BUSINESS WOMAN OWNED --
ESCROW COMPANY AND I URGE YOU TO
VOTE YES ON THIS BECAUSE OUT OF
MY POCKET I'D HAVE TO COME UP
WITH ABOUT SEVENTY EIGHT
THOUSAND DOLLARS FOR MY COMPANY
WHEN THIS GOES INTO EFFECT.
THANK YOU THANK YOU NEXT WITNESS.
HI MY NAME IS JEAN ENGELSTAD
FAMILY ESCROW SERVICES IN SAN
DIEGO I HAVE THREE OFFICES IN
SAN DIEGO AND I'M PLAY THIRTY
FIVE WOMEN.
AND I IT JUST TWO OF MY LEASES
WOULD COST ME OVER TWO HUNDRED
THOUSAND DOLLARS TO DO THIS.
SO IT'S CRUCIAL THAT WE PASS
THIS THANK YOU.
THANK YOU ANY ADDITIONAL
WITNESSES IN SUPPORT.
WITNESSES IN OPPOSITION.
XENA QUESTIONS BY COMMITTEE.
SENATOR COPY OUR THANK YOU VERY
MUCH FOR ON YOUR TESTIMONY HERE
TODAY I'M JUST TRYING TO
UNDERSTAND EXACTLY.
EXACTLY HOW THIS WORKS --
BECAUSE IT IT'S NOT THAT IT'S A
TRUST ACCOUNT CORRECT.
SO -- SO IT'S NOT.
I GUESS I'M STRUGGLING WITH AN
AN M. THIS ORGANIZATION.
AND I KNOW THAT WHEN A NUMBER OF
YEARS AGO.
IT MAY ACTUALLY HAVE BEEN THIS
EXACT SAME ORGANIZATION REQUIRED
CITIES TO PUT ON THEIR BALANCE
SHEET [inaudible]
THERE -- THERE ARE PROPERTY
ASSETS THAT ARE NOT REAL
PROPERTY AND SO ALL OF A SUDDEN
YOU HAD TO EVALUATE WHEN EVERY
CHAIR AND TABLE AND DIDN'T ADD
ANYTHING.
THE BALANCE SHEET.
BY THE CREATED A LOT MORE WORK
FOR EVERYBODY -- AND I'M I'M I'M
STRUGGLING WITH THIS BECAUSE IF
IF.
IT'S NOT AN ISSUE THE ISSUE IS
NOT THAT THERE HAVE BEEN.
THE FAULTS OF THESE ESCROW
COMPANIES OR THAT THEY'VE.
SOMEHOW HURT SOMEBODY.
IT'S THAT ON ITS THAT SOMEONE
HAS DECIDED YOU HAVE TO HAVE
MORE ON YOUR BALANCE SHEET -- IN.
THEIR RESTRICTING WHAT YOU CAN
DO WITH WITH ASSETS THAT YOU
HAVE THAT ARE ACTUALLY LIQUID.
THAT ARE THAT ARE COMING IN
PERIODICALLY I MEAN I'M
STRUGGLING WITH TRYING TO
UNDERSTAND EXACTLY.
EXACTLY HOW THIS WORKS AND
PLEASE HELP ME FIGURE OUT WHAT
MY QUESTION IS.
IT'S AN UNINTENDED CONSEQUENCE
THIS IS AN INTERNATIONAL
STANDARD THAT REALLY.
THAT THEY WEREN'T TARGETING
INDEPENDENCE FOR COMPANIES.
WHAT IT DOES IS CHANGES THE THE
CALCULATION OF WHAT GETS COUNTED
AS THE?
AS A LIABILITY WHEN YOU
CALCULATE THE LIQUID ASSETS.
SO USUALLY THE ASSET HAS THE
LEAST HAS VALUE.
I'M BEING AN ACCOUNTANT NOW BUT
AT LEAST HAS VALUE SO WHAT WHEN
YOU DO THE THE OTHER
CALCULATIONS OF YOUR NET WORTH.
YOU GET BOTH YOU GET THE ASSET
AND THE THE LIABILITY AND AND
BUT IN THIS NEW STANDARD MEANS
WE COULD ONLY GET THE LIABILITY.
NOT THE ASSET SO INCREASES IN
THE END THIS IS.
YOU CAN'T COUNT IT IS AN ASSET
WHICH WE CAN'T COUNT IT AS A
ASSET WE HAVE IT'S NOT TO DO
WITH -- WITH DEFAULT
CERTIFICATIONS BECAUSE THOSE ARE
COVERED BY BONDS THIS IS -- A
LIQUID ASSET REQUIREMENT WE HAVE
ON THE BOOKS.
OR IN THE CAN SWELL MICHAEL CAN
PROBABLY SPEAK TO THAT MORE THAN
I CAN BECAUSE HE'S BEEN AROUND
LONGER EVEN THAN ME.
BUT IT REALLY DOESN'T ADD ANY
VALUE I DON'T SEE ANY CONSUMER
PROTECTION TO IT HAVING MORE
MONEY BUT I CAN'T USE.
DOESN'T PROTECT ANYBODY.
SENATE CAREER JUST AS THE
EXAMPLE.
LET'S SAY THE COMPANY HAS AN
OPERATING CAM WAS A SIXTY
THOUSAND DOLLARS IN IT.
AND RIGHT NOW THE CURRENT
LIABILITIES. THREE TWELVE THIRTY
ONE TWENTY WHICH IS THE
IMPLEMENTATION DATE OF THE NEW.
ACCOUNTING STANDARDS ROLE.
OF TWENTY THOUSAND DOLLARS OF
LIABILITY THAT'S OUR NORMAL
ACCOUNTS PAYABLE COMMISSIONS A
ON PLOYS AND SO ON OTHER NET
LIQUID.
IS A FORTY THOUSAND DOLLAR
DIFFERENCE AND HAVE TO BE A
TWENTY FIVE THOUSAND LET'S SAY
THEY HAVE AN OFFICE LEASE ON THE
PAY TWO THOUSAND DOLLARS A MONTH.
FOR OFFICE LEESON IS A THREE
YEAR LEASE.
SO UNDER ACCOUNTING RULES YOU
HAVE TO TAKE TWELVE MONTHS OF
LEASE OBLIGATIONS WITH TO BE
TWENTY FOUR THOUSAND DOLLARS AND
NOW COMES INTO A CURRENT
LIABILITY POSITION ON THE BALLOT
SHEET.
THAT HAD BEEN THERE BEFORE.
NOW INSTEAD OF BEING. SIXTEEN
THOUSAND DOLLARS TO THE GOOD
THERE NOW 900-0 DOLLARS TO THE
BAD.
THROUGH NO FAULT OF THEIR OWN
JUST BECAUSE US PEOPLE BACK IN.
AND FOR CONNECTICUT WANTED.
TO CHANGE ACCOUNTING SANDERS
WITH THE BALLOT SHE HAS TO LOOK
LIKE.
AND THEN IS IT FAIR TO SAY THAT
THERE ARE DIFFERENT.
CONSUMER PROTECTION ROSE BY
STATE THAT -- MAY MAKE THIS --
RELEVANT TO ANOTHER STATE AS
OPPOSED TO CALIFORNIA WHERE WE
HAVE DIFFERENT A DIFFERENT SET
OF RULES.
WELL I THINK SO A MAN OF ON ALL.
ON THE FOR TO TO MISTER KING
SAID ON THIS TO A LITTLE BIT AS
WELL.
IS THE INDEPENDENT S. WHEN
HISTORY IS IS UNIQUE TO
CALIFORNIA OTHER STATES HAVE
THEIR SETTLEMENT SERVICES.
INDUSTRIES AND PROFESSIONS AND
THEY HAVE CERTAIN REGULATORY
REQUIREMENTS WITHIN THEIR OWN
STATES THE VERY WELL COULD BE
ANSWER LEAVE LIKE THE TITLE
INDUSTRY IS GOING TO BE IMPACTED
BY IT BECAUSE THAT'S THE
NATIONAL.
ENDEAVOR AS WELL SO THE SO YES I
THINK SO.
THANK YOU VERY MUCH [inaudible]
THANK YOU.
NEED TO SEND US SENATOR DORADO.
WHY WAS IT SET UP THIS WAY?
THE NEW INTERNATIONAL STANDARDS.
OKAY THAT'S WHAT'S CHANGED RIGHT
THE INTERNATIONAL STANDARDS
CHANGED IT WASN'T LIKE THIS. ONE
BUT WHAT'S THE RATIONALE FOR IT
IS GONNA BE A RATIONALE FOR IT
NOT JUST LIKE SOMEBODY WAKES UP
ONE AS WHAT WHAT WAS WHAT
HAPPENED AND IT WAS ABOUT TEN
YEARS AGO WHEN IT STARTED TO
THIS IS WHEN THE HOUSE BE WAS
GETTING PRESSURE FROM THE
INTERNATIONAL ACCOUNTING.
STANDARDS BOARD TO CONVERGE THE
UNITED STATES UNITED GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES
WOULD CONVERGE AND BE YOU.
CONSISTENT WITH INTERNATIONAL.
AND AND THE THE WITHOUT PICKING
ON CERTAIN ANY CERTAIN GERMAN
THE GERMAN FROM THE BRITISH
ACCOUNTING STANDARDS BOARD.
IS THE ONE WHO'S REALLY PUSHING
THAT HE WANTED LEASE OBLIGATIONS
ON THE BALLOT YOU BECAUSE ON AN
INTERNATIONAL LEVEL.
THEY ALWAYS HAD LEASE
OBLIGATIONS ON THE BALANCE SHEET.
IN UNITED STATES GAP.
GENERALY ACCEPTED ACCOUNTING
PRINCIPLES LEASE OBLIGATIONS OF
ALWAYS BEEN DISCLOSED IN THE
FOOTNOTES.
AND THAT'S NOT HAD AND THAT SO
THAT WAS NEVER IS SORT OF LIKE
LEASES WERE NEVER KNOWN.
THEY JUST WERE NOT ON THE
BALANCE SHEET.
AND SO FAST WE DECIDED TO TAKE
THIS THIS POSITION AND THEN.
A COUPLE YEARS AFTER THAT STAR
THE ABANDONED THE NEED FOR
INTERNATIONAL CONVERGENCE BUT
THEY'RE STILL LIKE THE IDEA.
RELATIVE TO THE LENDING
COMMUNITY AND BEING TRANSFERRED
MORE TRANSPARENT.
THE LENDING COMMUNITY ALL
OBLIGATIONS THAT A COMPANY WOULD
HAVE ON ITS BALANCE SHEET.
AND SO THEY SIDE THEY'RE STILL
WANTED TO HAVE.
LEASE OBLIGATIONS BOOKED ON TO
THE BALANCE SHEET NOT JUST AS A
FOOTNOTE DISCLOSURE.
AND ON THE BALANCE SHEET YOU
HAVE KERN OBLIGATE CURRENT AT
LIABILITIES AND NON CURRENT
LIABILITY SO ANYTHING DO WITH
AND AND THE DATE OF THE BALANCE
SHEET WOULD CHOSE OF HIS CURRENT.
LAW THAT'S OBVIOUSLY IMPACTING
LENDER COVENANTS ON LOAN
COVENANTS ON PEOPLE'S LINES OF
CREDIT AND SO ON AND SO THAT'S
WHY THEY ALSO TOOK ALMOST LIKE A
SIX YEAR IMPLEMENTATION PERIOD.
SO THAT PUBLICLY TRADED
COMPANIES ARE EFFECTIVE AT THE
END OF TWENTY NINETEEN AND NON
PUBLIC AT THE END OF TWENTY
TWENTY TO GET PEOPLE TO BE ABLE
TO REDO THEIR LOAN COVENANTS AND
WORK IT OUT WITH LENDERS AS TO
WHAT THEIR OBLIGATIONS ARE GOING
TO BE.
AND SO THE FAST BE FELT THAT.
I'M AN OVERALL ACCOUNTING
STANDARDS STANDPOINT IT WOULD BE
BETTER TO HAVE THE LEASE
OBLIGATIONS NOW ON THE BALANCE
SHEET.
AS LIABILITIES NOT JUST IN THE
FOOTNOTES TO THE UNTIL THAT'S
WHERE CAME FROM AND LIKE LIKE
MISS GARCIA TALKED ABOUT.
AN IN AN UNINTENDED CONSEQUENCE
IS THAT BECAUSE THE THESE
INDEPENDENCE WILL COMPANIES HAVE
THIS LIQUID ASSET REQUIREMENT
UNDER FINANCIAL CODE.
SEVENTEEN TO TEN OF OF NET
LIQUID MINUS CURRENT LIABILITIES
HAS TO BE AT LEAST TWENTY FIVE
THOUSAND DOLLARS OR MORE.
WELL BY THIS INTERNATIONAL BY
THIS ACCOUNTING STANDARD COMING
IN.
BY INCREASING CURRENT
LIABILITIES.
IS NOW MAKING A TOUGHER TO MEET.
OUR BECAUSE NOW YOU HAVE SOARED
INCREASE THE OTHER SIDE OF THE
EQUATION WHICH IS THE CASH.
YOUR STILL GONNA BE ABOVE TWENTY
FIVE THOUSAND DOLLARS SO IT'S
NOT AFFECTING THE NET WORTH OF
THE COMPANY NECESSARILY PER SE.
BUT IT'S REALLY IMPACTING THE
QUALITY BECAUSE YOU'RE NOT IS
NOT ALLOWING THEM JUST A BUMP UP.
NET LIQUID TO MAKE THE THING THE
QUESTIONS TO WORK THE SAME PLOTS
WERE.
FROM AN ACCOUNTING STANDARDS AND
POINT.
BETTER.
CENTER WILL WILL PUT IT IN GUIDE.
INTO LAYMAN'S TERMS SALAS GUYS
[inaudible]
PLEASE I'M.
THE INTERNATIONAL ACCOUNTING
STANDARDS.
DIDN'T REALLY CONSIDER
CALIFORNIA REQUIREMENTS.
AND THE CALIFORNIA PROTECTIONS
ARE UNLIKE OTHER.
EVERY OTHER STATE WE HAVE
PERFORMED A A DO AND AND
CONDUCTED DUE DILIGENCE LOOKING
AT ALL THE OTHER STATES THAT WE
COULD DISCOVER.
IN A SHORT AMOUNT OF TIME.
FINDING THAT THEY ALL STATES ARE
NOT AS GOOD AS CALIFORNIA. TO IT
DOESN'T AFFECT AUDIT
REQUIREMENTS IT IS DISCOVERABLE
IT IS NOTED THERE IS NO PROBLEM
WHATSOEVER THE AUDITS IN
CALIFORNIA OR MANDATORY.
UNLIKE OTHER STATES.
THE AUDIT SORE ANNUAL AND THE
LAST POINT IS THAT THIS ISN'T AN
ISSUE FOR AS YOU CAN SEE -- WORD
THE P. A.'S TO FIND US DISCOVER
IT.
AND NOTED.
SO WHAT WERE ASKING IS TO
RELIEVE THE FINANCIAL BURDEN ON
INDEPENDENT ESCROW COMPANIES. TO
SET THIS MONEY ASIDE IN THIS IS
I WAS CHARACTERIZING IT LOCK BOX
WHICH YOU CAN'T EVER USED FOR
ANYPURPOSE.
SERVING AS AN IMPEDIMENT.
AS WE WERE SAYING TO THE
BUSINESS FORMATION AS MS GARCIA
WAS SAYING.
BUSINESS CREATION AND BUSINESS
DEVELOPMENT FOR REALLY SMALL
BUSINESSES THAT'S THE HOPEFULLY.
THE SHORT ANSWER IN LAYMAN'S
TERMS.
AND I CAN MAKE IT EVEN SHORTER
THAN THAT.
IS THAT AS WAS NOTED MANY OF
THESE ESCROW.
ARE WOMEN THAT START WITH.
SOMETIMES JUST THEMSELVES MAYBE
ANOTHER PARTNER MAYBE THREE AND
WHEN YOU ASK FOR A WOULD REQUIRE
THEM TO HAVE THESE ASSETS OF AT
THE LEAST TWENTY FIVE THOUSAND
TWO MAYBE A HUNDRED THOUSAND AT
THE VERY BEGINNING OF A BUSINESS
THAT COULD VERY WELL MEET MAKE.
THE DIFFERENCE OF THEM HAVING A
BUSINESS EVEN START.
AND I WOULD JUST RESPECTFULLY
ASK FOR AN AYE VOTE.
OKAY AM I QUESTIONS ROSE A
LINERS SINNERS ROSIN COPPER
EUROS WELL AS WHAT PROMPTED THIS
ANALYZE CALIFORNIA UNIQUE.
TO THE REST IN THE NATION THAT
WE NEED TO BRING FORTH THIS
MEASURE RIGHT THANK YOU.
HOLY.
MADE IT AS CLEAR AS MUD ON WHY
WE'RE DOING THIS AND I WERE
HAPPY I I I DO HAVE A QUESTION --
FOR IN REGARDS TO THIS -- I'M
ALL FOR DIVERSITY AND EQUITY.
CAN'T A GUY GET A JOB IN US CODE
BUSINESS FOR ME.
OKAY CASE.
IN A AYE AYE HERE'S ANOTHER
WOMEN HERE NOW MY GO OR YOU
DISCRIMINATING AGAINST MAN AND
AN ESCROW BUSINESS.
ALL RIGHT AND SAY THAT I
ACTUALLY USED AT WOMAN ESCROW
AGENT THIS LAST YEAR
[inaudible]
OKAY.
THE CAL MATTERS WROTE ABOUT THAT
BUT ON THAT NOTE.
SENATOR PORTANTINO FOR THE
RECORD I'M OKAY WITH THAT OKAY
ALL RIGHT GOOD DEAL.
A SOME WOMEN.
QUIRK SILVA WHICH LIKE CLOSE.
A YES JUST THAT THIS BILL HAS
RECEIVE NO OPPOSITION AND THAT --
WE WOULD RESPECTFULLY ASK FOR AN
AYE VOTE.
WE WERE LOOKING FOR MOTION --
MOTION TO PASS TO APPROPRIATIONS --
MADAM SECRETARY PLEASE CALL THE
ROLL.
MOTION IS DUE PASSED TO
APPROPRIATIONS SENATOR BRADFORD
OUR ADVERT I CHIANG.
I COME AYE ERA.
I DURAZO.
RATHER AYE WESO.
WEST SO I SHALL [inaudible]
I PORTANTINO [inaudible]
PORTANTINO I THAT MEASURES OUT
SEVEN ZERO THANK YOU
ASSEMBLYMEMBER'S QUIRK SILVA.
AND OUR LAST ITEM IS BY AS SOON --
MEDINA ELEVEN EIGHTY SIX WHICH I
WILL HAND THE GAVEL OVER TO OUR
VICE CHAIRMAN OF YOUR PRESENTER
GETS OUT OF HAND.
I WAS JUST.
YOU MORE HAPPY USE AGO
.
THIS IS FILE ITEM NUMBER.
THREE AB ELEVEN EIGHTY SIX BY
MEDINA MISTER CHAIR.
IT'S GOING TO BE PRESENTING
THANK YOU MADAM CHAIR MEMBERS
I'M HERE ON BEHALF ASSUME MEDINA.
WHO'S CALL THE WAY ONTO HIS
DISTRICT AB ELEMENT -- EIGHTY
SIX IS SPONSORED BY THE
CALIFORNIA PARK PAWNBROKERS
ASSOCIATIONS BILL WOULD MAKE
MINOR.
INCREASES IS IS A REGULAR AT
EVENT WERE OF THE FARM WORKERS
COME BEFORE THIS LEGISLATURE ON
A REGULAR.
OCCASIONAL ROUGHLY -- EVERY FIVE
YEARS JUST ASK FOR THEIR FEE
INCREASES CALIFORNIA PROM BROKER
ASSOCIATIONS COME BEFORE THE
LEGISLATURE A AS STATED ROUGHLY
EVERY FIVE YEARS SEEKING
INCREASES.
THIS YEAR'S -- THEY HAVE
PROVIDED US WITH A STUDY
SUMMARIZING THEIR OPERATIONAL
COST.
INCREASES SINCE SINCE THE LAST
TIME THEY WERE HERE IN TWO
THOUSAND FIFTEEN AND HERE WITH
ME THAT DAY WAS REPRESENTED ON
THE PALM BARK BROKERS
ASSOCIATION FOR A NUMBER OF
YEARS IS.
FORMER CINNAMON A BILL THE
PLASTIC SURPLUS.
THANK YOU MISTER CHAIRMAN AND
MEMBERS BUILDING CLOSELY ON
BEHALF CALIFORNIA PAWN BROKERS
ASSOCIATION.
AS SENATOR BRADFORD INDICATED
EVERY FIVE YEARS.
THE CALIFORNIA PAWNBROKERS
BECAUSE THEY'RE ENTIRELY
REGULATED BY THE LEGISLATURE AND
NOT -- THE DEPARTMENT OF
GOVERNMENT WE COME UP BY THIS
BUT AGREEMENT -- VERY OLD
AGREEMENT TWO THOUSAND FOUR WITH
CONSERVE WHAT WAS THEN CONSUMERS
UNION'S NOW CONSUMER OF OR WE
WOULD ASK FOR PETITION -- FOR
INCREASES MODIFICATIONS IN BOTH
RATE AND FEE -- TO TRY TO KEEP
PACE WITH INCREASED COSTS THIS
YEAR WE'RE NOT ASKING FOR ANY
RATE INCREASE AT ALL.
PRINCIPALLY BECAUSE OF THE PAIRS
OF THE FEDERAL GOVERNMENT IS
PROBABLY GOING TO DO THAT FOR US --
IT WOULD BE -- A USES THE VERY
MODEST FEE INCREASES -- IN THREE
DIFFERENT CATEGORIES.
AND WILL JUST CERTAINLY ASK FOR
YOUR SUPPORT TO HELP US KEEP
PACE WITH.
COSTS.
THANK YOU THANK YOU ANY ANY
ADDITIONAL WITNESSES TO SUPPORT.
ANY WITNESSES IN OPPOSITION --
ANY.
QUESTIONS FROM THE COMMITTEE.
THEY'RE COMING HERE [inaudible]
QUESTION -- IT IT I'M I'M
ASSUMING THAT THIS IS NOT TIED
TO ANY CPI OR ANY INDEX.
IS IS THERE A REASON THAT YOU
DON'T JUST DO THAT AND THEN WE
JUST.
KEPT COMING BACK EVERY FIVE
YEARS I'M.
ACTUALLY IT'S BEEN IF I MEAN I
LIKE SEEING YOU HERE I WANT YOU
BACK.
BUT I FEEL VERY WELCOME.
IT'S BEEN DISCUSSED IT'S NOT THE
THE ASSOCIATION IS NOT.
BY I CAN ACTUALLY ACT ASK THEM
TO ADDRESS IT MORE.
WAVE THIS YEAR ACTUALLY OKAY I
AM I JUST WONDER IT WOULD SEEM
LITTLE BAND SING IT MAY OR MAY
NOT COVER CERTAIN THINGS CENTER
ONE OF THE THINGS I'VE SPEAKING
OF THE PAWNBROKER THIS MORNING
ACTUALLY IN SAN FRANCISCO.
WHO IS ACTUALLY EXPERIENCING A
45% INCREASE OVER LAST YEAR IN
LABOR COSTS?
AT SPECIFICALLY IN LABOR COSTS
BECAUSE OF SOME LOCAL ORDINANCE
REQUIREMENTS IN SAN FRANCISCO I
DON'T KNOW THAT A STATEWIDE CP I
WOULD WOULD.
CERTAINLY ADDRESS THAT
PARTICULAR PROBLEM.
I UNDERSTAND THANK YOU FOR THAT
I ANY OTHER QUESTIONS.
THE BILL TO MOVE OF WITH A DO
PASS RECOMMENDATION TO DO TO
SHERRY.
QUESTION IS.
I'M SORRY I'M SURE.
RESPECT AS RIVAL.
THE MOTION IS DUE PASSED TO
JUDICIARY SENATOR BRADFORD OUR
RADFORD I CHIANG.
THANKS I CABALLERO COMPARE I
DURAZO.
RATHER I WAS SO.
BY SO I MORALE [inaudible]
I PORTANTINO.
PORTANTINO I MEASURE PASSES
THANK YOU VERY MUCH MEMBERS
.
THAT CONCLUDES OUR BUSINESS BUT
WE'RE GONNA LIVE TO CALL ON
THOSE OUTSTANDING ON ITEMS FOR
THOSE ABSENT MEMBERS OUT ON SO
MADAM SECRETARY.
LET'S START WITH AB FOR TWELVE
OZ EVERYBODY UP IN THAT
[inaudible]
OKAY.
NEXT ITEM A AB NINE THIRTEEN THE
LLAMA A WILL CONSENT CALENDAR.
EVERYBODY ON ITS CONSENT.
ALL THEY HAVE TO MEMBERS ON
CONSENT.
ASSEMBLY BILL NINE THIRTEEN
MOTION IS DUE PASSED TO
APPROPRIATIONS CONSENT CALENDAR.
SENATOR WESO.
THERE WAS A I BROWN.
MORRELL AYE PORTANTINO
[inaudible]
PORTANTINO I MEASURES OUT SEVEN
ZERO AND ARE LESS ITEMS AB
THIRTEEN EIGHTY FOUR BY
ASSEMBLYMEMBER OLD DONALD PLEASE
CALL THE ABSENT MEMBERS.
ASSEMBLY ASSEMBLY BILL THIRTEEN
EIGHTY FOUR DO PASSED TO RULES
SENATOR WEST SO.
YES I BROWN [inaudible]
I SEVEN RIGHT.
THAT INCLUDES ALL OF OUR
BUSINESS ON THE SENATE BANKING
AND FINANCE -- INTO FINANCIAL
INSTITUTIONS WE STAND ADJOURNED