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HomeFinancial CodeDiv. 6Ch. 3§ 17423 Escrow Agent Discipline Rules

§ 17423 Escrow Agent Discipline Rules

Financial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 17423 Escrow Agent Discipline Rules

This law lets the commissioner warn, suspend for up to a year, or ban anyone who works with an escrow company if they break escrow rules or have certain crimes.

Key Takeaways

  • •The commissioner can censure, suspend (max 12 months), or bar a person from escrow jobs if they break the rules or have a qualifying conviction.
  • •The person has 15 days to ask for a hearing; if they don’t, they lose the right to a hearing.
  • •Once a notice is sent, the person must stop all escrow work and cannot move any escrow money until the commissioner decides otherwise.
  • •The list of censured, suspended, or barred people is shared with all licensed escrow companies.

Example

Jane works at an escrow firm and is later found guilty of stealing money from an escrow account.

Because Jane was convicted of a crime related to escrow duties, the commissioner can bar her from any escrow job and stop her from handling escrow money while the case is decided.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 17423 Escrow Agent Discipline Rules

(a) The commissioner may, after appropriate notice and opportunity for hearing, by order, censure or suspend for a period not exceeding 12 months, or bar from any position of employment, management, or control any escrow agent, or any other person, if the commissioner finds either of the following: (1) That the censure, suspension, or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, which violation was either known or should have been known by the person committing or causing it or has caused material damage to the escrow agent or to the public. (2) That the person has been convicted of or pleaded nolo contendere to any crime, or has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense specified in subdivision (b) of Section 17414.1, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the business in accordance with the provisions of this division. (b) Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Division 3 of Title 2 of the Government Code). Upon receipt of a request, the matter shall be set for hearing to commence within 30 days after such receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of such notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing. (c) Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any escrow processing activities, including disbursing any trust funds in the escrow agent’s possession, custody or control, and the financial institution holding trust funds shall be so notified by service of the notice, accusation and other administrative pleadings. The prohibition against disbursement of trust funds may be set aside, in whole or in part, by the commissioner for good cause. (d) Fidelity Corporation shall disclose to all licensees the identity of persons who have been censured, suspended, or barred from any position of employment, management, or control. (e) Persons suspended or barred under this section are prohibited from participating in any business activity of a licensed escrow agent and from engaging in any business activity on the premises where a licensed escrow agent is conducting escrow business. This subdivision shall not be construed to prohibit suspended or barred persons from having their personal escrow transactions processed by a licensed escrow agent. (f) This section shall apply to any violation, conviction, plea, or judgment occurring at any time prior to and after the enactment of this section. (g) The provisions of Section 17414.1 exempting convictions for which a person has obtained a certificate of rehabilitation from the prohibition against serving as an officer, director, stockholder, trustee, agent, or employee of an escrow agent, or in any position involving any duties with an escrow agent, shall not apply to permit the reinstatement of any person barred by the commissioner pursuant to this section, nor to prohibit the commissioner from bringing any action pursuant to this section. (h) If any provision of this section or the application thereof to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of this section which can be given effect without the invalid provision or application, and to this end the provisions of this section are severable. (Amended by Stats. 1993, Ch. 625, Sec. 4. Effective January 1, 1994.)

Last verified: January 11, 2026

Key Terms

judgmentemploymentcommissioncrimewaiverporthearingregulation

Related Statutes

  • § 30609 Securities Depository Discipline
  • § 12404 Commissioner Disciplinary Authority
  • § 28156 Disciplinary Actions For Violations
  • § 50318 Mortgage Licensee Discipline Authority
  • § 22168 Misleading Professional Credentials

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Financial Code. Section 17423.
View Official Source