New Law Financial Institutions
Act 172 (2013)
Please see Act 172 for the text of the new law.
Highlights:
- Modernizes Hawaii’s financial institutions laws, HRS chapter 412, reflecting major changes to banking laws on the federal level, particularly Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
- Adjusts fees for financial institutions reflecting a risk based approach of supervision, and increased regulation and monitoring that DFI must provide, due to industry sophistication and changes to the law.
- Strengthens DFI Commissioner’s powers by authorizing Commissioner to:
- Issue declaratory rulings and nonbinding interpretations of chapter.
- Investigate/ conduct hearings re violations of law, rules, agreements with Commissioner.
- Require licensed or chartered entities to comply with federal regulations, guidance.
Fee adjustments:
Annual assessments – beginning January 1, 2014, will be based on financial institution’s asset size, following the approach taken by all other states and federal regulators. This risk based method reflects an institution’s complexity.
- Low end of scale is $1,000 plus 0.00029111 x total assets for institutions with total assets under $750,000.
- High end of scale is capped at $150,000 for financial institutions with total assets of $10 billion or more.
Other fee changes effective 1/1/14:
| Financial Institutions (FI) | |
| App for preliminary approval for organization of a Hawaii FI | $9,000-$10,000 |
| Final app for charter/ license to engage in business of savings bank or trust company | $2,500 |
| App for merger, consolidation, or acquisition of control of or involving a HI FI | $10,000 |
| App for conversion of federal FI to a HI FI, or conversion of a HI FI to another HI FI charter | $2,500 |
| App for bank to conduct: trust business through a subsidiary, division or dept.; insurance activities; or securities activities | $5,000 |
| App for a bank or savings bank to comply with lending limits applicable to federal FIs | $2,000 |
| App to exceed certain permitted investment limits | $2,000 |
| App for charter of a credit union | $2,500 |
| Certificate of good standing of any HI FI | $100 |
| App to relocate certain bank branches | $500 |
| Failure to make payment | Up to $250/day |
| Intra-Pacific FI, and Interstate Branch out-of-state banks | |
| Annual fee for each intra-Pacific FI, and interstate branch of out of state banks | $1,000 per office, agency, branch |
| App for a branch, subsidiary, or subsidiary of a holding company of an intra-Pacific bank | $750 |
| App to relocate a branch, subsidiary, or subsidiary of a holding co. of an intra-Pacific bank | $500 |
No examination fee after January 1, 2014.
Other provisions:
- Clarifies that the limit on a person’s indebtedness to a bank includes credit exposure arising out of derivative transactions entered into by a bank and subsidiaries.
- Allows a bank to transfer unused real property to its operating subsidiary, if bank’s investment in the subsidiary is no more than 15% of the bank’s tier one capital.
- Authorizes a depository financial services loan company to charge a “below minimum draft fee” of $10 per draft on an open-ended loan.
- Changes “operating subsidiary” definition to mean a corporation with at least 50% (vs. currently 80%) of its voting securities held directly or indirectly by a bank.