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HomeFinancial CodeDiv. 1.1Ch. 20Art. 3§ 1800 Foreign Bank Operations Limits

§ 1800 Foreign Bank Operations Limits

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

§ 1800 Foreign Bank Operations Limits

This law says a foreign bank can only do business in California at a licensed office, unless an exception applies, and it clarifies that a foreign bank isn’t considered to be doing business just because its majority‑owned subsidiary works here.

Key Takeaways

  • •Foreign banks can only operate in California at licensed offices.
  • •Exceptions include federal branches, certain authorized activities, real‑estate loans, and trust business.
  • •Owning more than 50% of a subsidiary does not make the foreign bank’s activities count as transacting business in California.

Example

A German bank owns 60% of a U.S. subsidiary that runs a loan office in Los Angeles.

Because the German bank owns more than half of the subsidiary, the subsidiary’s activities do not automatically count as the foreign bank transacting business in California.

How to Calculate

Ownership Percentage = (Bank's Shares in Subsidiary ÷ Total Shares of Subsidiary) × 100

  1. Count how many shares of the subsidiary the foreign bank owns.
  2. Count the total shares of the subsidiary.
  3. Divide the bank's shares by the total shares.
  4. Multiply the result by 100 to get a percentage.

The foreign bank holds 55% of the subsidiary's shares.

Result: 55% ownership → exceeds 50%, so the foreign bank is not deemed to be transacting business solely because of the subsidiary.

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

Official Source
View on CA.gov

§ 1800 Foreign Bank Operations Limits

(a) No foreign (other nation) bank shall transact business in this state except at an agency or branch office that it is licensed to maintain and at which it is permitted by this chapter to transact the business transacted. (b) Subdivision (a) shall not be deemed to prohibit: (1) Any foreign (other nation) bank that maintains a federal agency or federal branch in this state from transacting at the federal agency or federal branch any business that it may be authorized to transact under applicable federal laws and regulations; (2) Any foreign (other nation) bank from carrying on the activities described in subdivision (d) of Section 191 of the Corporations Code; (3) Any foreign (other nation) bank that does not maintain an agency or branch office from making in this state loans secured by liens on real property located in this state; or (4) Any foreign (other nation) bank that does not maintain an agency or branch office from transacting trust business as permitted under Section 1555. (c) For purposes of subdivision (a), no foreign (other nation) bank shall be deemed to be transacting business in this state merely because a majority-owned subsidiary transacts business in this state. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)

Last verified: January 11, 2026

Key Terms

foreign (other nation) banktransact businessagency or branch officefederal agency or federal branchloans secured by liens on real propertytrust business

Related Statutes

  • § 1803 Foreign Bank Agency Branch Licensing
  • § 1805 Foreign Bank Office Restrictions
  • § 1813 Foreign Bank Office Closure
  • § 1760 Foreign Bank Licensing Restrictions
  • § 1762 Foreign Bank Representative Office

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Financial Code. Section 1800.
View Official Source