SB 15
Department of Legislative Services
Maryland General Assembly
2020 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
Senate Bill 15 (Chair, Finance Committee)(By Request - Departmental -
Labor)
Finance Economic Matters
Financial Institutions - Commissioner of Financial Regulation - Banking
Institution Powers
This departmental bill modifies the process for (and circumstances under which) a
banking institution may engage in any additional activity, service, or other practice that is
already authorized for national banking associations. The bill repeals an existing
requirement that banking institutions file an application with (and receive the approval of)
the Office of the Commissioner of Financial Regulation (OCFR). Instead, the bill allows a
banking institution to undertake an action within 45 calendar days after filing a notice of
intention to do so with OCFR (assuming OCFR does not reject or modify the proposal
under the terms specified by the bill).
Fiscal Summary
State Effect: The bill does not materially affect State finances or operations.
Local Effect: The bill does not materially affect local government finances or operations.
Small Business Effect: The Maryland Department of Labor has determined that this bill
has a meaningful impact on small business (attached). The Department of Legislative
Services concurs with this assessment. (The attached assessment does not reflect
amendments to the bill.)
Analysis
Bill Summary: A banking institution must provide OCFR with written notice at least
45 calendar days before engaging in any activity, service, or other practice authorized
under federal law. The notice required must include a description of the proposed activity,
service, or other practice, including (1) the specific authority used and (2) any condition
that federal law requires (or allows) with respect to national banking associations.
The banking institution may begin to perform the activity, service, or other practice on the
first business day after the 45th calendar day from the date OCFR receives the required
notice unless OCFR (1) specifies a different date or (2) prohibits the activity, service, or
other practice.
OCFR may extend the 45-day period under the bill if it determines that the banking
institution’s notice requires additional information or additional time for analysis. OCFR
may prohibit a banking institution from performing the activity, service, or other practice
described in the required notice if it determines that performing the activity, service, or
other practice would (1) adversely affect the safety and soundness of the banking
institution; (2) be detrimental to the welfare of the general economy of the State; or (3) be
detrimental to the public interest or to banking institutions.
Current Law/Background: If OCFR approves, banking institutions may engage in any
additional activity, service, or other practice in which, under federal law, national
banking associations may engage. OCFR may grant an approval only if:
 OCFR determines that approval is (1) reasonably required to protect the welfare of
the general economy of the State and of banking institutions or (2) not detrimental
to the public interest or to banking institutions; and
 the approval imposes the same conditions that federal law requires or permits as to
national banking associations.
OCFR advises that the bill’s changes are intended to simplify the process that State banks
must follow in order to undertake an activity authorized for federally chartered banks. The
changes are also intended to ease the processing burden on OCFR (as an application and
response from OCFR would no longer be needed to allow a proposed new activity).
OCFR notes, however, that after reviewing a notification, it would still have the ability to
block any action deemed detrimental to the public interest (or to the interests of the
institution) in order to protect the welfare of the State or its economy. OCFR further notes
that most (if not all) states have similar parity laws. Examples of banking activities that
have been approved in the past include opening on Sundays, providing debt cancellation
products, and operating a courier service.
SB 15/ Page 2
 Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Maryland Department of Labor; Department of Legislative
Services
Fiscal Note History: First Reader - January 20, 2020
rh/mcr Third Reader - March 16, 2020
Revised - Amendment(s) - March 16, 2020
Analysis by: Eric F. Pierce Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 15/ Page 3
 ANALYSIS OF ECONOMIC IMPACT ON SMALL BUSINESSES
TITLE OF BILL: Financial Institutions - Commissioner of Financial Regulation - Banking
Institution Powers
BILL NUMBER: SB 15
PREPARED BY: Joseph Cunningham, Director of Legislative Response & Special Projects
PART A. ECONOMIC IMPACT RATING
This agency estimates that the proposed bill:
__ WILL HAVE MINIMAL OR NO ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESS
OR
_X_ WILL HAVE MEANINGFUL ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESSES
PART B. ECONOMIC IMPACT ANALYSIS
This legislation will have a positive impact on the state’s banking community as it
replaces the administrative burden on state banks of preparing and submitting an application with
a prior notice provision allowing state banks to more quickly and efficiently obtain approval of
requests and respond to competitive issues. The new process will not diminish the regulatory
powers of the Commissioner.
SB 15/ Page 4


Statutes affected:
Text - First - Financial Institutions - Commissioner of Financial Regulation - Banking Institution Powers: 5-504 Financial Institutions
Text - Third - Financial Institutions - Commissioner of Financial Regulation - Banking Institution Powers: 5-504 Financial Institutions