PRINTER'S NO. 3434
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1957
Session of
2020
INTRODUCED BY M. K. KELLER, TURZAI, BENNINGHOFF, BRIGGS, BROWN,
SCHLEGEL CULVER, DUNBAR, EVERETT, GLEIM, GREINER, GROVE,
HARKINS, JOZWIAK, KEEFER, KORTZ, LAWRENCE, LONGIETTI,
MARSHALL, MILLARD, NEILSON, PEIFER, PICKETT, PYLE, READSHAW,
ROTHMAN, RYAN, SAINATO, SAYLOR, WHEELAND, YOUNGBLOOD, ZABEL
AND ZIMMERMAN, MARCH 10, 2020
REFERRED TO COMMITTEE ON COMMERCE, MARCH 10, 2020
AN ACT
Amending the act of May 15, 1933 (P.L.565, No.111), entitled "An
act relating to the powers and duties of the Department of
Banking and Securities and the Secretary of Banking and
Securities in exercising supervision over, and taking
possession of and conducting or liquidating the business and
property of, corporations, associations, and persons
receiving deposits or otherwise transacting a banking
business, corporations acting as fiduciaries, and building
and loan associations; providing for the payment of the
expenses of the Department of Banking by supervised
corporations, associations, or persons, and appropriating the
Banking Department Fund; authorizing the Department of
Banking, under certain circumstances, to examine
corporations, associations, or persons affiliated, or having
business transactions with supervised corporations,
associations or persons; authorizing appeals to the Supreme
Court, and prescribing and limiting the powers and duties of
certain other courts and their prothonotaries, registers of
wills, recorders of deeds, and certain State departments,
commissions, and officers; authorizing certain local public
officers and State departments to collect fees for services
rendered under this act; regulating securities; providing
penalties; and repealing certain acts and parts of acts," in
short title and preliminary provisions, further providing for
definitions; in jurisdiction and maintenance of department,
further providing for assessment of expenses of department
upon institutions; and, in banking and securities, further
providing for fund.
The General Assembly of the Commonwealth of Pennsylvania
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hereby enacts as follows:
Section 1. The definition of "fund" in subsection A of
section 2 of the act of May 15, 1933 (P.L.565, No.111), known as
the Department of Banking and Securities Code, is amended to
read:
Section 2. Definitions.--A. The following terms shall be
construed in this act to have the following meanings, except in
those instances where the context clearly indicates otherwise:
* * *
"Fund." The Banking Fund [redesignated in section 1113-A as
a continuation of the Banking Department Fund] under section
1113-A.
* * *
Section 2. Section 204 of the act is amended to read:
Section 204. Assessment of Expenses of Department upon
Institutions.--A. [All] Except for expenses subject to
subsection A.1 or related to the department's duties under the
act of December 5, 1972 (P.L.1280, No.284), known as the
"Pennsylvania Securities Act of 1972," all the expenses of the
department, including those enumerated in this act or otherwise
authorized by law, shall be charged to and paid by all
institutions, including licensees, in such equitable amounts,
[at such times] on the first day of May and December of each
year or the next business day thereafter, and in such manner as
the department shall, by general rule or regulation, prescribe.
[The expenses incurred by the department in connection with any
examination or investigation, whether regular or special,
including a proportionate part of the salary of any examiner or
other employe of the department or third-party expenses,
including attorneys retained by the department, may be assessed
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by the department upon the particular institution examined or
investigated.]
A.1. In the event the department incurs expenses relating to
the resolution of a bank, bank and trust company, trust company
or savings bank under Article X or the seizure and liquidation
of a credit union under 17 Pa.C.S. § 503(c) (relating to
regulation by department) in excess of amounts available in the
Institution Resolution Account established under section 1113-
A(g), including additional costs for salaries of examiners or
employes of the department or third-party expenses, including
amounts paid to attorneys retained by the department, the
department may impose a special assessment to recover such costs
by transmitting notice to the Legislative Reference Bureau for
publication in the Pennsylvania Bulletin and by giving notice of
the special assessment under subsection B. The proceeds of any
special assessment shall be paid into the Institution Resolution
Account.
B. The department shall give written notice to each
institution, including licensees, of the amount lawfully charged
against it under the provisions of this act. The institution
shall pay the amount of [such] the assessment under subsection A
or A.1 to the department within sixty days after the invoice
date on the notice. If payment is not made by any institution or
licensee within the sixty-day period, the department may impose
in addition to the money assessed a maximum penalty fee of one
hundred fifty dollars ($150.00) for that sixty-day period and
each successive thirty-day period of delinquency. In addition,
the department, through the Office of Attorney General or its
authorized designee, may institute an appropriate action at law
for the amount lawfully assessed against such institution,
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together with any additional costs incurred by the Department of
Banking or the Office of Attorney General or its authorized
designee by virtue of such failure to pay.
B.1. For fiscal year 2020-2021 and each fiscal year
thereafter, prior to the issuance of a notice under subsection B
for assessments levied under subsection A or A.1, the department
shall estimate the balance of the fund at the end of the fiscal
year and proportionally reduce such assessments by an amount to
avoid any increase in the fund balance, not to exceed twenty
million dollars ($20,000,000). In estimating the fund balance at
the end of the fiscal year, the department may disregard any
contribution to the fund by special assessments levied under
subsection A.1:
(1) to the extent the special assessments cause the fund
balance to exceed twenty million dollars ($20,000,000); and
(2) if the amounts are needed for the resolution of a bank,
bank and trust company, trust company or savings bank under
Article X or the seizure and liquidation of a credit union under
17 Pa.C.S. § 503(c).
B.2. A special assessment under subsection A.1 and any
revision made to the assessment schedule under subsection B.1
shall not be subject to review under section 205 of the act of
July 31, 1968 (P.L.769, No.240), referred to as the Commonwealth
Documents Law, section 204(b) of the act of October 15, 1980
(P.L.950, No.164), known as the "Commonwealth Attorneys Act," or
the act of June 25, 1982 (P.L.633, No.181), known as the
"Regulatory Review Act."
C. This section also applies to licensees and credit unions.
Section 3. Section 1113-A(a), (e) and (g) of the act are
amended and the section is amended by adding subsections to
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read:
Section 1113-A. Fund.
(a) [Continuation.--The Banking Department Fund is
redesignated as the Banking Fund.] Conversion.--The Banking Fund
is converted into a trust fund to be administered for the
benefit of institutions, including licensees, and customers. The
fund shall be administered by the department. All interest
earned from the investment or deposit of money accumulated in
the fund shall be deposited in the fund for the same use. All
money deposited into the fund shall be held in trust and shall
not be considered general revenue of the Commonwealth and may be
used only to effectuate the purposes of this section as
determined by the department. Money in the fund shall be subject
to audit by the Auditor General. No subsequent statute shall be
held to supersede or modify the provisions of this section
except to the extent that such statute shall do so expressly.
* * *
(e) Restrictions on appropriations.--
(1) For fiscal years beginning after June 30, 1995, and
ending before July 1, 2012, the General Assembly shall
appropriate funds as it determines to be necessary from the
fund for use by the department or other Commonwealth
agencies.
(2) For fiscal years beginning after June 30, 2012, and
ending before July 1, 2020, the General Assembly shall
appropriate the funds as it determines to be necessary from
the fund for use only by the department and not for any other
Commonwealth agency.
(3) For fiscal years beginning after June 30, 2020,
money in the fund may be expended upon direction of the
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department for the purposes specified by this section.
* * *
(g) Institution Resolution Account.--
(1) The Institution Resolution Account is established as
a restricted account within the fund.
(2) The sources of the account are as follows:
(i) An amount determined by the secretary each
fiscal year based upon economic and regulatory conditions
from assessments, fees and administrative penalties
generated from statutes administered by the department
other than:
(A) the Pennsylvania Securities Act of 1972; or
(B) the Takeover Disclosure Law.
(ii) Amounts received from court litigation
involving the department.
(3) The secretary may use the money in the account to
pay for costs associated with any of the following:
(i) Resolution of an institution or an association,
under Article X. Money under this subparagraph may be
used in lieu of paying expenses from the assets of an
institution or association under section 1006.
(ii) Seizure and liquidation of a credit union under
17 Pa.C.S. § 503 (relating to regulation by department).
(4) Except for amounts received through special
assessments levied under section 204B, the balance of the
account shall not exceed $15,500,000.
(h) Reserve.--Any balance in the fund in excess of the
amount in the Institution Resolution Account shall be held as a
reserve to protect the department from adverse economic
circumstances, including the loss of assessment revenue due to
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the transfer of institutions to another primary regulator and
unanticipated expenses related to the regulation of
institutions, including licensees and credit unions.
(i) Dissolution.--In the event that the fund is
discontinued, any balance remaining in the fund, after deducting
administrative costs for liquidation, shall be returned to
institutions, including licensees and credit unions, in
proportion to their financial contributions to the fund in the
preceding calendar year.
Section 4. This act shall take effect in 60 days.
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