Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
                                           Act 475 of the Regular Session
 State of Arkansas
 94th General Assembly                        A Bill
 Regular Session, 2023                                                             SENATE BILL 418
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 By: Senator J. Dismang
 By: Representative Maddox
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                                   For An Act To Be Entitled
                 AN ACT TO TRANSFER THE ADMINISTRATIVE FUNCTIONS OF
                 THE STATE SECURITIES DEPARTMENT TO THE STATE BANK
                 DEPARTMENT; TO AMEND THE LAW CONCERNING THE
                 ORGANIZATION OF THE STATE SECURITIES DEPARTMENT; AND
                 FOR OTHER PURPOSES.
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                                               Subtitle
                         TO TRANSFER THE ADMINISTRATIVE FUNCTIONS
                         OF THE STATE SECURITIES DEPARTMENT TO THE
                         STATE BANK DEPARTMENT; AND TO AMEND THE
                         LAW CONCERNING THE ORGANIZATION OF THE
                         STATE SECURITIES DEPARTMENT.
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 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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        SECTION 1.        DO NOT CODIFY.      Transfer of administrative functions of
 State Securities Department to State Bank Department.
        (a)    The administrative functions of the State Securities Department
 are transferred within the Department of Commerce to the State Bank
 Department.
        (b)    The statutory authority, powers, duties, functions, records,
 personnel, property, and unexpended balances of appropriations, allocations,
 and other funds, including the functions of budgeting or purchasing of the
 State Securities Department remain with the State Securities Department
 subsequent to the transfer under subsection (a) of this section.
        (c)(1)       The transfer under subsection (a) of this section does not
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 affect the orders, rules, directives, registration, licensing, or standards
 made or promulgated by the State Securities Department before or after the
 effective date of this act.
               (2)   The orders, rules, directives, registration, licensing, or
 standards of the State Securities Department shall continue to be in effect
 until they are amended or repealed under authority given by law.
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      SECTION 2.      Arkansas Code § 4-30-207(a), the authority of the
 Securities Commissioner over certain cooperative banks, is amended to read as
 follows:
      (a)(1)     Every cooperative bank organized under this chapter prior to
 March 22, 1937, which is not situated in a city, town, or community in which
 there is also situated a state or national bank or a teller's window branch
 thereof is declared to be an investment company and shall be placed under the
 regulation and supervision of the State Securities Department, in the same
 manner as now provided by law for other investment companies.
               (2)   The Securities Commissioner, in consultation with the
 Secretary of the Department of Commerce and the Bank Commissioner, is
 authorized, empowered, and directed to make and promulgate all such rules not
 inconsistent herewith as shall be necessary or convenient for the
 administration and carrying out of this subchapter and for the supervision
 and control of all such organizations.
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      SECTION 3.      Arkansas Code § 15-4-1228 is amended to read as follows:
      15-4-1228.      Investigations by Bank Commissioner or and Securities
 Commissioner — Injunctions.
      (a)   The Bank Commissioner may investigate, either upon complaint or
 otherwise, when it appears that a county or regional industrial development
 company is conducting its business in an unsafe and injurious manner or in
 violation of this subchapter or the rules promulgated under this subchapter
 by the Bank Commissioner or when it appears that any person is engaging in
 the business without being approved under the provisions of this subchapter.
      (b)   The Securities Commissioner, in consultation with the Bank
 Commissioner, may investigate, either upon complaint or otherwise, when it
 appears that a county or regional industrial development company is offering
 its securities in violation of § 15-4-1220 or is otherwise violating the
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 provisions of Arkansas law that come under the jurisdiction of the Securities
 Commissioner.
      (c)(1)     Subject to the jurisdictional provisions of subsections (a) and
 (b) of this section, whenever it appears upon sufficient grounds or evidence
 satisfactory to the Bank Commissioner or the Securities Commissioner, in
 consultation with the Bank Commissioner, that any county or regional
 industrial development company has engaged in or is about to engage in any
 act or practice in violation of this subchapter or any rule or order under
 this subchapter, or the assets or capital of any county or regional
 industrial development company is impaired or the county or regional
 industrial development company's affairs are in an unsafe condition, the Bank
 Commissioner or the Securities Commissioner, in consultation with the Bank
 Commissioner, may:
                     (A)   Refer the evidence which is available concerning
 violations of this subchapter or any rule or order under this subchapter to
 the appropriate agency, which may institute the appropriate corrective action
 or proceedings with or without the reference; or
                     (B)(i)     Summarily order the county or regional industrial
 development company to cease and desist from the act or practice during the
 time the Bank Commissioner or the Securities Commissioner, in consultation
 with the Bank Commissioner, may apply to the Pulaski County Circuit Court to
 enjoin the act or practice and to enforce compliance with this subchapter or
 any rule or order under this subchapter.
                              (ii)   However, the Bank Commissioner or the
 Securities Commissioner, in consultation with the Bank Commissioner, may
 apply directly to the Pulaski County Circuit Court for injunctive relief
 without issuing a cease and desist order.
               (2)   Upon a proper showing, a permanent or temporary injunction,
 restraining order, or writ of mandamus shall be granted and a receiver or
 conservator may be appointed for the county or regional industrial
 development company or its assets.
               (3)   The court may not require the Bank Commissioner or the
 Securities Commissioner, in consultation with the Bank Commissioner, to post
 a bond.
               (4)   In addition to any other remedy provided in this subchapter
 or under applicable law, the costs of the Bank Commissioner or the Securities
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 Commissioner, in consultation with the Bank Commissioner, incurred in
 successfully prosecuting violations of this subchapter may be imposed by the
 court as additional damages payable by the company.
          (d)   A copy of all reports of the investigation or other proceedings
 conducted pursuant to this section shall be forwarded to the Secretary of the
 Department of Finance and Administration.
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          SECTION 4.    Arkansas Code § 18-50-102(a)(2), concerning the authority
 of the Bank Commissioner or the Securities Commissioner to foreclose on a
 mortgage or deed of trust, is amended to read as follows:
                (2)    A state-chartered bank, nationally chartered bank, state-
 chartered or federally chartered savings and loan association, state-
 chartered or federally chartered credit union, or a mortgage loan company
 subject to licensing, supervision, and auditing by a federal agency, a
 government-sponsored enterprise, and the Bank Commissioner or Securities
 Commissioner, in consultation with the Bank Commissioner, as applicable, as
 an approved mortgage loan servicer authorized to do business under the laws
 of the State of Arkansas if the state-chartered bank, nationally chartered
 bank, state-chartered or federally chartered savings and loan association,
 state-chartered or federally chartered credit union, or mortgage loan
 company:
                       (A)   Has a physical business location open for business for
 normal banking hours located within the State of Arkansas;
                       (B)   Is either the holder or the mortgage loan servicer for
 the holder of a note secured by a mortgage or deed of trust; and
                       (C)   Does not collect a fee or cost for any action taken
 under this chapter unless authorized by a court order; or
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          SECTION 5.    Arkansas Code § 23-35-201 is amended to read as follows:
          23-35-201.    Credit Union Division — State Credit Union Supervisor —
 Staff.
          (a)   There is created under the State Securities Department a Credit
 Union Division which shall be administered by the State Credit Union
 Supervisor. The Securities Commissioner, in consultation with the Secretary
 of the Department of Commerce and the Bank Commissioner, shall act as State
 Credit Union Supervisor.
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      (b)   The supervisor, in consultation with the Secretary of the
 Department of Commerce and the Bank Commissioner, shall appoint such
 administrative assistants and examiners as may be necessary to assist in the
 performance of his or her duties under this chapter.
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      SECTION 6.       Arkansas Code § 23-37-206(b)(1), concerning the Supervisor
 of Savings and Loan Associations, is amended to read as follows:
      (b)(1)(A)       The Securities Commissioner, in consultation with the
 Secretary of the Department of Commerce and the Bank Commissioner, shall act
 as Supervisor of Savings and Loan Associations.
                      (B)   He or she The Securities Commissioner may appoint an
 assistant securities commissioner responsible for financial institutions to
 act as the Assistant Supervisor of Savings and Loan Associations and perform
 all duties delegated by the commissioner Securities Commissioner.
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      SECTION 7.       Arkansas Code § 23-42-201(a), concerning the administration
 of the State Securities Department by the Securities Commissioner, is amended
 to read as follows:
      (a)(1)     This chapter shall be administered by the Securities
 Commissioner, who shall be appointed by the Governor and who shall serve at
 the pleasure of the Governor.
               (2)    The commissioner shall report to the Secretary of the
 Department of Commerce Except as provided in subdivision (a)(3) of this
 section, the Securities Commissioner shall:
                      (A)   Be appointed by the Governor and serve at the pleasure
 of the Governor; and
                      (B)   Report to the Bank Commissioner.
               (3)    The Bank Commissioner may act as the Securities
 Commissioner.
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      SECTION 8.       Arkansas Code § 25-43-302(a)(26), concerning the state
 entities within the Department of Commerce is amended to read as follows:
               (26)   The State Securities Department, created under the Arkansas
 Securities Act, § 23-42-101 et seq., within the State Bank Department.
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                                   APPROVED: 4/4/23
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Statutes affected: 
SB 418: 4-30-207(a), 15-4-1228, 15-4-1220, 18-50-102(a), 23-35-201, 23-37-206(b), 23-42-201(a)
Act 475: 4-30-207(a), 15-4-1228, 15-4-1220, 18-50-102(a), 23-35-201, 23-37-206(b), 23-42-201(a)