2013 -- H 5967

=======

LC02262

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO FINANCIAL INSTITUTIONS

     Introduced By: Representative Charlene Lima

     Date Introduced: April 09, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Title 19 of the General Laws entitled "FINANCIAL INSTITUTIONS" is

1-2

hereby amended by adding thereto the following chapter:

1-3

     CHAPTER 32

1-4

STATE BANK

1-5

     19-32-1. Creation. -- There is hereby created a Rhode Island state bank ("state bank") to

1-6

protect the financial welfare and economic vitality of the citizens of Rhode Island, to obtain credit

1-7

and support the functions of state government, to create jobs and improve the general welfare of

1-8

the state of Rhode Island.

1-9

     19-32-2. Powers. -- (a) The state bank shall have the same banking powers as a state

1-10

chartered commercial bank, including the right to accept deposits, pay interest, and make loans to

1-11

Rhode Island citizens and business entities.

1-12

     (b) The banking powers, lending powers, and guarantee powers of all state departments

1-13

and agencies, including without limitation, the Rhode Island housing and finance corporation and

1-14

the Rhode Island economic development corporation shall no longer be exercised by any such

1-15

state department or agency and shall be delegated and assigned to the state bank.

1-16

     (c) The state bank shall be a for-profit entity and shall transfer its net profits to the state

1-17

treasurer on a monthly basis to support the state budget minus a reserve of twenty percent (20%)

1-18

of such amount to be held by the state bank until January 30th of each calendar year for

1-19

distribution pro rata to the registered voters of the state.

2-20

     (d) The state bank shall have the power to accept deposits from residents of Rhode Island,

2-21

Rhode Island public departments and agencies, and Rhode Island business entities. The state bank

2-22

shall make loans and guarantees only to Rhode Island citizens, Rhode Island public departments

2-23

and agencies, and Rhode Island business entities.

2-24

     (e) The state bank shall not charge fees or interest rates which are in excess of any rules

2-25

or regulations promulgated by the United States treasury or the United States federal reserve.

2-26

     (f) The state bank shall have the same powers within the state with regard to banking

2-27

entities and credit unions as the federal reserve bank of Boston would otherwise have, except for

2-28

any power which is an exclusive constitutional function of the United States.

2-29

     (g) The deposits of Rhode Island citizens and Rhode Island business entities shall be

2-30

guaranteed by the state of Rhode Island in the same amounts for each account as otherwise would

2-31

be guaranteed by the federal deposit insurance corporation. Such deposits into the state bank shall

2-32

not require a guarantee by the federal deposit insurance corporation.

2-33

     (h) The state bank is prohibited from engaging in banking activity outside of the state of

2-34

Rhode Island, and from otherwise buying any stock, bond, or security from any person or entity

2-35

not a resident of Rhode Island.

2-36

     (i) The state bank shall not purchase for investment any stock, bond, put, call, hybrid, or

2-37

other financial instrument which has not been issued or created by a Rhode Island entity.

2-38

     19-32-3. Mandated deposits. -- The state of Rhode Island, its municipalities, and all

2-39

departments and agencies thereof, and all recipients of state grants, municipal grants and state or

2-40

municipal contracts shall deposit all fees, revenues and grants received from the state,

2-41

municipalities, and public corporations, into the state bank and not into any other bank or credit

2-42

union.

2-43

     19-32-4. Governance. -- (a) The state bank shall be governed by a board of directors

2-44

consisting of nine (9) persons to include the governor, the lieutenant governor, the attorney

2-45

general, the secretary of state, the treasurer and four (4) residents elected for a term of four (4)

2-46

years.

2-47

     (b) The state treasurer shall serve as chair of the board of directors.

2-48

     (c) The stockholders of the state bank shall be the registered voters of the state of Rhode

2-49

Island.

2-50

     (d) The state of Rhode Island shall receive eighty percent (80%) of any dividends

2-51

declared by the board of directors and the registered voters of the state shall receive twenty

2-52

percent (20%) of the dividends declared by the board of directors, pro rata.

2-53

     (e) The registered voters of the state shall have the right by petition of two percent (2%)

2-54

of the voters in a special election or general election, to enact any resolution rejecting any

3-1

resolution of the state bank or enacting a new resolution for the state bank, not otherwise

3-2

inconsistent with a resolution of a stockholder who would be a stockholder of a commercial bank.

3-3

     (f) The board of directors shall not be authorized to issue any stock or preferred stock or

3-4

any other ownership interest in the state bank.

3-5

     (g) The board of directors shall appoint a president, vice president, secretary and treasurer

3-6

for a term not exceeding the members of the board, and who shall manage and operate the state

3-7

bank consistent with generally accepted fiduciary standards applicable to commercial banks, as

3-8

regulated by the department of business regulation.

3-9

     (h) The state bank shall have the authority to create its own bylaws and rules and

3-10

regulations consistent with the general laws and any rules and regulations promulgated by the

3-11

department of business regulation.

3-12

     SECTION 2. This act shall take effect upon passage.

=======

LC02262

=======

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO FINANCIAL INSTITUTIONS

***

4-1

     This act would establish a state bank.

4-2

     This act would take effect upon passage.

=======

LC02262

=======