SB 185
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader
Senate Bill 185 (Senators Kagan and Reilly)
Finance Economic Matters
Financial Institutions - Security Questions and Measures
This bill requires a financial institution to allow a customer to choose from at least
two security question options for each security question (if the customer is required to
provide an answer to a security question in connection with the provision of an account).
The bill applies only prospectively and does not apply to any customer accounts created
before its October 1, 2021 effective date.
Fiscal Summary
State Effect: The bill does not materially affect State finances or operations. Enforcement
can be handled with existing resources.
Local Effect: None.
Small Business Effect: Minimal.
Analysis
Current Law: A “financial institution” means any financial institution of the type
supervised under the Financial Institutions Article, whether or not State-chartered.
Maryland law does not currently address which security questions a financial institution
may ask in connection with a consumer account.
The Office of the Commissioner of Financial Regulation (OCFR) provides assistance to
Maryland consumers by investigating complaints of questionable business practices
involving State-chartered, licensed, and registered financial institutions under its
supervision and authority.
Additional Comments: Many financial institutions are chartered at the federal level and
are not subject to State supervision. For instance, OCFR advises that the bill likely has no
effect on federally chartered banks.
Additional Information
Prior Introductions: HB 274 of 2020, a similar bill, passed the House and was referred
to the Senate Finance Committee, but no further action was taken. Its cross file, SB 160,
received a hearing in the Senate Finance Committee, but no further action was taken.
Designated Cross File: HB 471 (Delegate C. Watson) - Economic Matters.
Information Source(s): Department of Legislative Services
Fiscal Note History: First Reader - February 1, 2021
an/mcr Third Reader - March 3, 2021
Analysis by: Eric F. Pierce Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 185/ Page 2


Statutes affected:
Text - First - Financial Institutions - Security Questions and Measures: 1-212 Financial Institutions
Text - Third - Financial Institutions - Security Questions and Measures: 1-212 Financial Institutions