Bill Summary – FastDemocracy

8053.01000
     Sixty-sixth
     Legislative Assembly                     SENATE BILL NO. 2093
     of North Dakota
     Introduced by
       Industry, Business and Labor Committee
       (At the request of the Department of Financial Institutions)
  A BILL for an Act to amend and reenact sections 6-01-09, 6-05-03, and 6-05-28, subsection 3 of
  section 6-08.1-01, sections 13-04.1-04.1, 13-05-04.1, and 13-08-06, subsection 1 of section
  13-09-10, and section 13-11-08 of the North Dakota Century Code, relating to the examination
  of technology service providers, the capital requirement for trust companies, the examination of
  trust companies, the definition of a financial institution, surety bond requirements for money
  brokers and collection agencies, notice requirement for deferred presentment service providers,
  fees for money transmitters, and reporting requirements for debt-settlement providers; and to
  repeal sections 13-04.1-05.1, 13-05-05.2, 13-08-05.2, and 13-09-10.1 of the North Dakota
  Century Code, relating to automatic renewal of license in 2009 for money brokers, automatic
 renewal of license in 2014 for collection agencies, deferred presentment service providers, and
 money transmitters.
 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
     SECTION 1. AMENDMENT. Section 6-01-09 of the North Dakota Century Code is amended
 and reenacted as follows:
     6-01-09. Supervision and examination by commissioner of financial institutions.
     The commissioner shall exercise a constant supervision over the business affairs of all
 financial corporations, financial institutions, and credit unions, including all out-of-state branches
 of financial corporations, financial institutions, and credit unions. Either the commissioner or one
 or more examiners shall visit each financial institution at least once each thirty-six months to
 examine its affairs and ascertain its financial condition. The commissioner shall inspect and
 verify the assets and liabilities of the institution and branches to ascertain with reasonable
 certainty that the value of the assets and the amounts of the liabilities are correctly carried on its
 books. The commissioner shall examine the validity of mortgages held by savings institutions
 and shall see that all of the mortgages are properly recorded. The commissioner shall
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  investigate the method of operation and conduct of the corporations and institutions and their
  systems of accounting to ascertain whether the methods conform to the law and sound banking
  usage and principles. The commissioner shall inquire into and report any infringement of the
  laws governing those corporations and institutions, and for that purpose the commissioner may
  examine the officers, agents, and employees of the corporations and institutions and all persons
  doing business therewith. The commissioner may examine, or cause to be examined, or review
  the books and records of any subsidiary corporation of a bank under the commissioner's
  supervision and may require the bank to provide information on the holding company that owns
  the bank. The commissioner may also examine, or cause to be examined, or review the books
 and records of any technology service provider that provides services to financial corporations,
 credit unions, and financial institutions under the commissioner's supervision, to evaluate that
 entity's risk management systems and controls and compliance with applicable laws that affect
 such services provided to financial corporations, credit unions, and financial institutions. The
 commissioner shall report the condition of the corporations and institutions, together with the
 commissioner's recommendations or suggestions in connection therewith, to the state banking
 board, and the board may take such action as the exigencies may demand.
     SECTION 2. AMENDMENT. Section 6-05-03 of the North Dakota Century Code is amended
 and reenacted as follows:
     6-05-03. Capital stock - Amount - Par value - Paid-in capital required.
     The amount of capital stock of any such corporation may not be less than one hundred
 thousandmillion dollars, and the same must be divided into shares of one hundred dollars each.
 No such corporation is authorized to transact any business or exercise any powers as such until
 the aforesaid minimum amount of capital stock has been subscribed for, and not less than fifty
 thousand dollars thereof actually has been paid in, invested, and deposited as provided in this
 chapterwith no less than five hundred thousand dollars of that amount in liquid assets. The state
 banking board may require such additional capital, surplus, and undivided profits as it may
 determine necessary to properly serve the area and to protect the public interests. The state
 banking board shall take into consideration peer group ratios, or federal standards and
 guidelines, when determining whether any additional capital is required.
     SECTION 3. AMENDMENT. Section 6-05-28 of the North Dakota Century Code is amended
 and reenacted as follows:
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      6-05-28. Examination by commissioner - Fees - Power over business, officers, and
  employees.
      The commissioner shall make a full, true, complete, and accurate examination and
  investigation of the affairs of each corporation doing business under this chapter as often as the
  commissioner deems necessary. Such examination mustmay be made without previous notice
  to the corporation to be examined. Fees for such examinations must be charged by the
  department of financial institutions at an hourly rate to be set by the commissioner, sufficient to
  cover all reasonable expenses of the department associated with the examinations provided for
  by this section. Fees must be paid to the department of financial institutions and deposited in
 the financial institutions regulatory fund. The commissioner, in the commissioner's discretion,
 may accept, in lieu of any examination authorized or required by this title to be conducted by the
 department of financial institutions, the examination that may have been made of such
 institution within a reasonable period by the federal reserve bank or federal deposit insurance
 corporation, if a copy of such examination is furnished to the commissioner. The commissioner
 shall assume and exercise over each such corporation and its business, officers, directors, and
 employees all the power and authority conferred upon the commissioner over financial or
 moneyed corporations or associations.
     SECTION 4. AMENDMENT. Subsection 3 of section 6-08.1-01 of the North Dakota Century
 Code is amended and reenacted as follows:
     3.   "Financial institution" means any organization that is physically located in the state
          which is authorized to do business under state or federal laws relating to financial
          institutions, including, without limitation, a bank, including the Bank of North Dakota, a
          savings bank, a trust company, a savings and loan association, or a credit union.
     SECTION 5. AMENDMENT. Section 13-04.1-04.1 of the North Dakota Century Code is
 amended and reenacted as follows:
     13-04.1-04.1. Surety bond required.
     1.   Each licensee shall maintain a surety bond in an amount not less than twenty-fivefifty
          thousand dollars. The surety bond must be in a form prescribed by the commissioner.
     2.   When an action is commenced on a licensee's bond, the commissioner may require
          the filing of a new bond.
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      3.   Immediately upon recovery upon any action on the bond, the licensee shall file a new
           bond.
     SECTION 6. AMENDMENT. Section 13-05-04.1 of the North Dakota Century Code is
  amended and reenacted as follows:
     13-05-04.1. Surety bond required.
      1.   Each licensee shall maintain a surety bond in the amount of twentyfifty thousand
           dollars.
      2.   The surety bond must be in a form as prescribed by the commissioner.
      3.   When an action is commenced on a licensee's bond, the commissioner may require
          the filing of a new bond.
     4.   Immediately upon recovery upon any action on the bond, the licensee shall file a new
          bond.
    SECTION 7. AMENDMENT. Section 13-08-06 of the North Dakota Century Code is
 amended and reenacted as follows:
    13-08-06. Issuance of license - Posting.
     1.   Upon receipt of a complete application, the commissioner shall determine whether the
          qualifications prescribed under this chapter are satisfied. If the commissioner
          determines the qualifications are satisfied and approves the documents, the
          commissioner shall issue to the applicant a license to engage in the deferred
          presentment service business.
     2.   A licensee shall keep the licensea notice conspicuously posted in the place of
          business of the licensee, and shall provide the same notice to its customers in this
          state of the license number under which it is operating. This notice must include the
          license number and instructions for customers to look up the licensee on the
          nationwide multistate licensing system for license verification.
     3.   A license issued under this section is effective through the remainder of the fiscal year
          ending June thirtiethDecember thirty-first after the license's date of issuance unless
          earlier surrendered, suspended, or revoked under this chapter.
    SECTION 8. AMENDMENT. Subsection 1 of section 13-09-10 of the North Dakota Century
 Code is amended and reenacted as follows:
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      1.   A licensee under this chapter shall pay an annual renewal fee of four hundred fifty
           dollars, which is not subject to refund. The fee must equal five hundred dollars or
           one-fourth of one percent of the money transmission dollar volume in North Dakota for
           the twelve months ending June thirtieth, whichever is greater. The fee may not exceed
           two thousand five hundred dollars.
     SECTION 9. AMENDMENT. Section 13-11-08 of the North Dakota Century Code is
  amended and reenacted as follows:
     13-11-08. Records - Annual reports.
      1.   Every licensee shall maintain records in conformity with generally accepted accounting
          principles and practices in a manner that will enable the commissioner to determine
          whether the licensee is complying with this chapter. The records of a licensee may be
          maintained electronically provided all records can be reproduced upon request of the
          commissioner and within the required statutory time frame outlined in this section.
     2.   Before AugustJanuary first of each year, the parent company of each licensee shall file
          with the commissioner a composite annual report in the form prescribed by the
          commissioner relating to services provided by licensees.
    SECTION 10. REPEAL. Sections 13-04.1-05.1, 13-05-05.2, 13-08-05.2, and 13-09-10.1 of
 the North Dakota Century Code are repealed.
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Statutes affected: 
INTRODUCED: 6-01-09, 6-05-03, 6-05-28, 6-08.1-01, 13-04.1-04.1, 13-05-04.1, 13-08-06, 13-09-10, 13-11-08
Enrollment: 6-01-09, 6-05-03, 6-05-28, 6-08.1-01, 13-04.1-04.1, 13-05-04.1, 13-08-06, 13-09-10, 13-11-08