§ 5050. Temporary Withdrawal; Corporate Response.

(a) If the Director determines that irreparable harm may occur without Temporary Withdrawal, the Director shall notify the Corporation of its finding by personal service at the Corporation's main office (“Withdrawal Notice”) and by registered mail to each member of the Board of Directors. The Temporary Withdrawal shall be in effect upon receipt of the Withdrawal Notice by the Corporation.

(b) The Withdrawal Notice shall include the following:

(1) An affidavit, executed by the Director, setting out the facts upon which the finding of irreparable harm is based, including citation to the specific provisions of the law or implementing regulations with which the Corporation has failed to comply; and

(2) A description of any documents which the Director relied upon in making the findings.

(c) The Temporary Withdrawal shall automatically terminate thirty-one (31) calendar days after it becomes effective unless:

(1) The Director has previously issued a Suspension Notice pursuant to Section 5051(b);

(2) The Director finds that the Corporation has failed to comply with the California Small Business Financial Development Corporation Law; or

(3) The Director terminates the Temporary Withdrawal.

(d) Within thirty (30) calendar days of the effective date of the Temporary Withdrawal Notice or any additional time as mutually agreed between the Director and the Corporation, the Corporation shall mail to the Director the following information (“Corporate Response”).

(1) Whether the Corporation accepts the Temporary Withdrawal, or disagrees with it. If the Corporation does not accept the Temporary Withdrawal, the Corporation shall specify each fact contained within the Temporary Withdrawal Notice which it disputes;

(2) Any information which the Corporation believes mitigates or explains the facts upon which the Temporary Withdrawal is based; including the Corporation's history and past performance; and

(3) Designation of an individual, who shall be either an officer of the Corporation or legal counsel for the Corporation, who is authorized to receive any additional notice regarding the Temporary Withdrawal or Suspension of the Corporation.

(e) Not later than ten (10) calendar days after the effective date of the Temporary Withdrawal, the Corporation may request a hearing before the Board, pursuant to Section 5051(c), to contest the determination of the Director. The request for a hearing should be sent by certified mail to the Director and by registered mail to the chair of the Board, both at 980 9th Street, Suite 2450, Sacramento, California 95814.

HISTORY

1. New section filed 6-24-91; operative 7-24-91 (Register 91, No. 42).

2. Amendment of section heading and section filed 6-9-97 as an emergency; operative 6-9-97 (Register 97, No. 24). A Certificate of Compliance must be transmitted to OAL by 10-7-97 or emergency language will be repealed by operation of law on the following day.

3. Reinstatement of section heading and section as they existed prior to 6-9-97 emergency amendment by operation of Government Code section 11346.1(f) (Register 98, No. 30)

4. Amendment of section heading, section and Note filed 7-24-98; operative 7-24-98 pursuant to Government Code section 11343.4(d) (Register 98, No. 30).

5. Amendment of subsection (e) filed 12-27-2004 as a deemed emergency pursuant to Corporations Code section 14024; operative 12-27-2004 (Register 2004, No. 53). A Certificate of Compliance must be transmitted to OAL by 6-27-2005 or emergency language will be repealed by operation of law on the following day.

6. Editorial correction of History5 (Register 2005, No. 27).

7. Certificate of Compliance as to 12-27-2004 order, including amendment of subsection (c)(2) and Note, transmitted to OAL 5-25-2005 and filed 7-7-2005 (Register 2005, No. 27).

Note

Note: Authority cited: Section 14024, Corporations Code. Reference: Section 14028, Corporations Code.