MANDATORY REPORTING OBLIGATIONS:

Escrow license holders in California must comply with several critical reporting duties:

• Annual audited financial statements: Within 105 days after the end of the fiscal year.
• Escrow liability report: Each licensed branch must file a report of escrow liabilities by February 15 every year 
• Audit upon license surrender: A closing audit, supported by an active Escrow Agent Bond, is required within 105 days following the license surrender application.

 FINANCIAL ASSESSMENTS & FEES:

• Annual state assessment: By May 30, the DFPI charges each license location a fee (typically $2,800; may include up to $1,000 extra per location if needed) to cover regulatory costs. 
• Escrow Agents’ Fidelity Corporation (EAFC): Members must pay assessment fees and adhere to the EAFC’s standards for coverage and procedures.

 BONDING REQUIREMENTS:

Escrow agents must maintain continuous coverage:

• Surety bonds: Must range from \$25,000 to \$50,000, adjusted based on average trust liability; increases of \$5,000 apply per additional office.
• Fidelity bonds: Required for agents not covered by EAFC or processing non-EAFC transactions 

OWNERSHIP & EQUITY SAFEGUARDS:

1. TO ENSURE STABILITY AND ACCOUNTABILITY:

• Stock transfers: Any issuance or transfer of corporate securities, no matter the scale, requires prior DFPI approval.
• Net worth criteria: Agents must maintain at least $25,000 in liquidity and $50,000 in tangible net worth. Branch offices impose an additional 50% requirement for the first location, then 25% for each further branch.

2. ADMINISTRATIVE & OPERATIONAL STANDARDS:

• Bookkeeping: Trust and general accounts must be kept current and accurate at all times.
• Personnel reporting: Any addition of officers, directors, or employees must be reported to the DFPI within 10 days of hiring.
• Location changes: Agents must notify the DFPI at least 30 days before any licensed office address change 

 STAFFING AND EXPERIENCE REQUIREMENTS:

 Each main office must be staffed by a manager with a minimum of five years of escrow experience, while each branch office must have a manager with at least four years of related experience

 REGULATORY OVERSIGHT & EXAMINATIONS:

• Periodic audits: Agents are subject to DFPI examinations every two to four years, with frequency dependent on factors like the number of offices, escrow volume, complexity of transactions, and past compliance 
• Length of examinations: Typically, main offices undergo audits of 40–50 hours, while branch offices require 20–30 hours. All examination costs are borne by the licensee.

FINAL TAKEAWAYS:

Post‑licensing, California escrow agents must adhere to a robust set of financial, operational, and administrative regulations designed to protect consumers and uphold industry integrity. From timely financial reporting and annual assessments to bond coverage, net worth thresholds, experienced management, and periodic compliance audits, each requirement plays a vital role in ensuring escrow trustworthiness. Licensees that maintain transparent books, notify DFPI of key personnel or address changes, and uphold rigorous bonding and net worth standards can better serve consumers and avoid enforcement actions.