Financial institutions: Iran sanctions.

Existing law generally provides for the regulation and licensure of financial institutions, including, but not limited to, banks and credit unions, by the Department of Business Oversight and the Commissioner of Business Oversight, as specified. The federal Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 imposes federal sanctions against the Government of Iran, as specified, and, among other duties, requires the Secretary of the Treasury to prescribe regulations to prohibit, or impose strict conditions on, the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that the Secretary of the Treasury finds knowingly engages in certain activities related to the Government of Iran, subject to specified penalties. The federal act also requires the Secretary of the Treasury to prescribe regulations to require a domestic financial institution maintaining a correspondent account or payable-through account in the United States for a foreign financial institution to perform an audit of prohibited activities that may be carried out by the foreign financial institution, report to the Department of the Treasury with respect to transactions or other financial services provided with respect to a prohibited activity, certify that the foreign financial institution is not knowingly engaging in any prohibited activity, to the best of its knowledge, and establish due diligence policies, procedures, and controls reasonably designed to detect whether the Secretary of the Treasury has found the foreign financial institution to knowingly engage in any prohibited activity. This bill would require the commissioner, when conducting specified examinations, to examine whether a licensee that maintains a correspondent account or payable-through account, as defined, is in compliance with the federal Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, associated federal regulations, and any related presidential executive orders. The bill also authorizes the commissioner to bring an action for a violation of the act, as specified, and requires the commissioner to forward evidence of the violation to the United States Department of the Treasury. This bill would become inoperative when certain conditions are met.