Section 6653.5 - Troubled savings associations(a) A troubled savings association may not accept funds obtained, directly or indirectly, by or through any deposit broker for deposit into one or more accounts.(b) Any renewal of a savings account in any troubled savings association and any rollover of any amount on deposit in such a savings account shall be treated as an acceptance of funds by the troubled savings association for purposes of subdivision (a).(c) The commissioner may, on a case-by-case basis and upon application by a savings association, waive the applicability of subdivision (a) upon a finding that the acceptance of these deposits does not constitute an unsafe or unsound practice with respect to that savings association.(d) The commissioner may impose, by regulation or order, such additional restrictions on the acceptance of broker deposits by any troubled savings association as the commissioner may determine to be appropriate.(e) For purposes of this section: (1) "Deposit broker," except as otherwise provided in paragraph (2), means either of the following: (A) Any person engaged in (i) the business of placing deposits, or facilitating the placement of deposits, of third parties with financial institutions or (ii) the business of placing deposits with financial institutions for the purpose of selling interests in those deposits to third parties.(B) An agent or trustee who establishes a savings account to facilitate a business arrangement with a financial institution to use the proceeds of the account to fund a prearranged loan.(2) Subject to paragraph (3), "deposit broker" does not include any of the following:(A) A savings association with respect to funds placed with that savings association.(B) An employee of a savings association with respect to funds placed with the employing savings association.(C) A trust department of a savings association, if the trust in question has not been established for the primary purpose of placing funds with financial institutions.(D) The trustee of a pension or other employee benefit plan, with respect to funds of the plan.(E) A person acting as a plan administrator or an investment adviser in connection with a pension plan or other employee benefit plan, provided that that person is performing managerial functions with respect to the plan.(F) The trustee of a testamentary account.(G) The trustee of an irrevocable trust (other than one described in subparagraph (B) of paragraph (1), as long as the trust in question has not been established for the primary purpose of placing funds with financial institutions.(H) A trustee or custodian of a pension or profitsharing plan qualified under Section 401(d) or 403(a) of the federal Internal Revenue Code of 1986.(I) An agent or nominee whose primary purpose is not the placement of funds with financial institutions.(3) The exceptions specified in paragraph (2) do not apply to, and the term "deposit broker" includes, any savings association, and any employee of any savings association, that engages, directly or indirectly, in the solicitation of deposits by offering rates of interest (with respect to those deposits) which are significantly higher than the prevailing rates of interest on deposits offered by other associations and federal associations in the savings association's normal market area.(4) "Employee" means any person meeting all of the following criteria:(A) The person is employed exclusively by the savings association.(B) The person's compensation is primarily in the form of a salary.(C) The person does not share that compensation with a deposit broker.(D) The person's office space or place of business is used exclusively for the benefit of the savings association which employs the person.(5) "Troubled savings association" means any savings association which does not meet the minimum capital requirements applicable with respect to that savings association.Added by Stats. 1990, Ch. 1118, Sec. 37.