Chapter 78

2003 -- H 6001 SUBSTITUTE A

Enacted 6/27/03

AN ACT

RELATING TO REGULATING OVERSIGHT

Introduced By: Representatives Scott, and Long

Date Introduced: February 12, 2003

It is enacted by the General Assembly as follows:

     SECTION 1. Section 19-4-2 of the General Laws in Chapter 19-4 entitled "Regulatory

Oversight" is hereby amended to read as follows:

19-4-2. Periodic examinations -- Access to records. -- (a) The director or the director's

designee shall, whenever he or she considers it advisable, but at least once in each year, examine

each regulated institution. However, the director may extend the examination period for eligible

financial institutions to at least once every eighteen (18) months. For the purposes of this section,

an eligible financial institution means a financial institution with total assets of less than two

hundred fifty million dollars ($250,000,000) which has not experienced a change in control in the

last twelve (12) month period and which is:

      (1) Well capitalized;

      (2) Well managed;

      (3) Highly rated by state and federal banking regulatory agencies; and

      (4) Not subject to a formal enforcement proceeding or order.

      In addition, the director may also consider other factors that may be considered by

federal banking regulatory agencies when those agencies determine whether financial institutions

qualify for an extended examination cycle. At each examination the director or the director's

designee shall have free access to all books, records, papers, assets and any other information

deemed necessary by the director or the director's designee to ascertain the regulated institution's

condition, its ability to fulfill its obligations, and whether it has complied with the provisions of

law.

      (b) The total cost of an examination made pursuant to this section shall be paid by the

examined party, and shall include the following expenses: be

(1) one hundred fifty percent (150%) of the salary and benefits of the examining

personnel engaged in the examination and shall be paid to the director to and for the use of the

state. The assessment shall be in addition to any taxes and fees otherwise payable to the state. The

total examination fees under this section payable in any one year shall not exceed one hundred

thousand dollars ($100,000) for any one regulated institution.

(2) All reasonable technology costs related to the examination process. Technology costs

shall include the actual cost of software and hardware utilized in the examination process and the

cost of training examination personnel in the proper use of the software or hardware; and

(3) All necessary and reasonable education and training costs incurred by the state to

maintain the proficiency and competence of the examination personnel. All such costs shall be

incurred in accordance with appropriate state of Rhode Island regulations, guidelines and

procedures.

      (c) The director or the director's designee is authorized to accept in his or her discretion

the report of any examination conducted by any federal banking regulatory or federal deposit

insuring agencies or other state banking regulatory agency in lieu of an examination by the

director or his or her designee.

(d) Expenses incurred pursuant to subsections (b)(2) and (b)(3) of this section shall be

allocated equally to each regulated institution no more frequently than annually and shall not

exceed an annual average assessment of seven hundred fifty dollars ($750) per regulated

institution for any given three (3) calendar year period. All revenues collected pursuant to this

section shall be deposited as general revenues. That assessment shall be in addition to any taxes

and fees otherwise payable to the state.

     SECTION 2. This act shall take effect upon passage.     

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LC02207/SUB A

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