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A00504
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
432
Session of
2021
INTRODUCED BY LAUGHLIN, STEFANO, J. WARD AND BAKER,
MARCH 18, 2021
REFERRED TO BANKING AND INSURANCE, MARCH 18, 2021
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
banking and securities, further providing for fund.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1113-A 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:
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Section 1113-A. [Fund] Trust fund; money received from
licensees.
(a) [Continuation] Banking Trust Fund.--The Banking
Department Fund [is] redesignated as the Banking Fund[.] is
converted into a trust fund to be administered for the benefit
of institutions, credit unions, licensees and their customers,
except for persons subject to regulation under the act of
December 5, 1972 (P.L.1280, No.284), known as the Pennsylvania
Securities Act of 1972. 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 shall be used only to effectuate the purposes
of this section as determined by the department and shall be
subject to audit by the Auditor General.
(b) Sources of the Banking Trust Fund.--The sources of the
fund are as follows:
(1) Money collected or received by the department
arising from:
(i) fees, assessments, charges and penalties
relating to the regulation of [associations,] credit
unions, institutions and licensees;
(ii) the sale by the Department of General Services
of unserviceable property originally paid for out of the
fund; and
(iii) similar sources.
(2) The sources of the fund shall not include fees,
assessments, charges and penalties generated from:
(i) the [act of December 5, 1972 (P.L.1280, No.284),
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known as the] Pennsylvania Securities Act of 1972; or
(ii) the act of March 3, 1976 (P.L.42, No.19), known
as the Takeover Disclosure Law.
(c) Use of the Banking Trust Fund.--The fund shall be used
by the department to pay its expenses relating to the
examination and regulation of institutions, credit unions and
licensees, except for persons subject to regulation under the
Pennsylvania Securities Act of 1972, including the following:
(1) Salaries of the secretary, the deputies, the
examiners, the other employees of the department and
attorneys.
(2) Rental and other expenses for offices, rooms, garage
space and other accommodations, regardless of the
municipality in which they are located, occupied by the
department. This paragraph excludes offices, rooms, garage
space and accommodations in the Capitol Complex.
(3) Premiums for workers' compensation insurance
covering the officers and employees of the department.
(4) Premiums for surety bonds for officers and employees
of the department required by law to furnish the bonds.
(5) Furniture, stationery, materials, supplies and
overhead expenses of the department.
(c.1) Operating reserves of the Banking Trust Fund.--The
fund shall maintain an adequate operating reserve as determined
by the secretary to be necessary to ensure the ability of the
department to continue to pay its expenses described in
subsection (c) in the event of adverse economic conditions, the
loss of revenue as a result of institutions or licensees
becoming subject to the jurisdiction of another primary
regulator or emergencies. In determining the amount of the
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reserve to be held by the fund, the secretary shall take into
consideration the accreditation requirements of the Conference
of State Bank Supervisors, the National Association of State
Credit Union Supervisors and the American Association of
Residential Mortgage Regulators.
(d) Department of General Services.--Purchases and leases
under subsection (c) shall be made through the Department of
General Services, as agent. Contracts of insurance and surety
bonds under subsection (c) shall be placed through the
Department of General Services, as agent.
(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, 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.
(f) Warrant.--Money in the [fund] Banking Trust Fund
appropriated to the department shall be paid out upon warrant of
the State Treasurer drawn after requested by the secretary.
(g) Institution Resolution Account.--
(1) The Institution Resolution Account is established as
a restricted account within the [fund] Banking Trust 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
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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. ยง 503 (relating to regulation by department).
(4) In determining the amount to pay into the
Institution Resolution Account each year pursuant to
paragraph (1), the secretary shall do so in a manner that
builds up a reserve sufficient to pay costs as described in
paragraph (3) in a manner that will allow the department to
discharge its obligations to resolve, seize or liquidate an
institution or credit union without impairing the ability of
the department to continue to perform its other duties.
Section 2. This act shall take effect immediately.
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