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PROPOSED RULEMAKING

DEPARTMENT OF BANKING AND SECURITIES

[ 10 PA. CODE CH. 5 ]

Assessments

[43 Pa.B. 5455]
[Saturday, September 14, 2013]

 The Department of Banking and Securities (Department) proposes to add Chapter 5 (relating to assessments) to read as set forth in Annex A. This chapter is proposed under the authority of 17 Pa.C.S. § 503(a) (relating to regulation by department) and sections 202(C) and 204(A) of the Department of Banking and Securities Code (71 P. S. §§ 733-202(C) and 733-204(A)).

Purpose

 The purpose of this proposed rulemaking is to add Chapter 5 to implement an assessment schedule for State-chartered institutions which would provide adequate and sustainable funding for the Department and streamline reporting and billing requirements on State-chartered institutions by eliminating examination-based billing for State-chartered credit unions and State-chartered trust companies.

Explanation of Regulatory Requirements

 Proposed § 5.1 (relating to definitions) defines the words and terms used in Chapter 5.

 Proposed § 5.2 (relating to semiannual assessment for banks, bank and trust companies, savings banks and savings associations) establishes a semiannual assessment schedule for banks, bank and trust companies, savings banks and savings associations that are chartered by the Department.

 Proposed § 5.3 (relating to semiannual assessment for trust companies) establishes a semiannual assessment schedule for trust companies that are chartered by the Department.

 Proposed § 5.4 (relating to semiannual assessment for credit unions) establishes a semiannual assessment schedule for credit unions that are chartered by the Department.

 Proposed § 5.5 (relating to adjustments to assessments; invoicing) sets forth the criteria for adjustments to the assessments based upon an optional adjustment for inflation which would be applied to all State-chartered institutions in subsection (a) and an optional adjustment to be applied only to specific institutions based upon their Uniform Financial Institutions Rating System or Uniform Interagency Trust Rating System composite rating in subsection (b). Section 5.5(c) establishes that semiannual assessments calculated under Chapter 5 will be rounded to the nearest dollar. The index used to calculate the inflation adjustment in § 5.5(a) is the same one used annually by the Department to calculate the inflation adjustment to the ''base figure'' under the act of January 30, 1974 (P. L. 13, No. 6) (41 P. S. §§ 101—605), known as the Loan Interest and Protection Law.

 Proposed § 5.6 (relating to implementation schedule) sets forth the implementation schedule of the assessments for banks, bank and trust companies, savings banks, savings associations and trust companies.

Affected Parties

 The proposed rulemaking would affect Pennsylvania State-chartered banking institutions, credit unions and trust companies.

Fiscal Impact

State government

 The proposed rulemaking would provide appropriate and sustainable funding for the Department.

Regulated community

 The proposed rulemaking would increase the assessments paid by the regulated community to the Department for the first time since the 1990s. Upon full implementation, the assessments paid by nearly all State-chartered institutions will still be significantly lower than current assessments paid by similar Federally-chartered institutions operating in this Commonwealth.

Paperwork

 The proposed rulemaking would eliminate the paperwork associated with examination-based billing for the Department, State-chartered credit unions and State-chartered trust companies. The proposed rulemaking would not impose additional paperwork on the Department, State-chartered banking institutions, credit unions or trust companies.

Effectiveness/Sunset Date

 Chapter 5 will be effective upon final-form publication in the Pennsylvania Bulletin. The regulations do not have a sunset date because the Department will periodically review the effectiveness of the regulations.

Regulatory Review

 Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on August 22, 2013, the Department submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Commerce Committee and the Senate Banking and Insurance Committee. A copy of this material is available to the public upon request.

 Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Department, the General Assembly and the Governor of comments, recommendations or objections raised.

Public Comments

 Interested persons are invited to submit written comments, suggestions or objections regarding the proposed rulemaking to the Office of Chief Counsel, Department of Banking and Securities, Attention: Public Comment on Regulation 3-51, 17 N. Second Street, Suite 1300, Harrisburg, PA 17101-2290, fax (717) 783-8427, ra-pabankreg@pa.gov within 30 days after publication in the Pennsylvania Bulletin.

GLENN E. MOYER, 
Secretary

Fiscal Note: 3-51. No fiscal impact; (8) recommends adoption.

Annex A

TITLE 10. BANKING AND SECURITIES

PART I. GENERAL PROVISIONS

CHAPTER 5. ASSESSMENTS

Sec.

5.1.Definitions.
5.2.Semiannual assessment for banks, bank and trust companies, savings banks and savings associations.
5.3.Semiannual assessment for trust companies.
5.4.Semiannual assessment for credit unions.
5.5.Adjustments to assessments; invoicing.
5.6.Implementation schedule.

§ 5.1. Definitions.

 The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

Bank—As defined in section 102(f) of the Banking Code (7 P. S. § 102(f)).

Bank and trust company—As defined in section 102(g) of the Banking Code.

Consolidated total assets—The total assets as reflected in the FFIEC Call Report's ''Schedule RC-Balance Sheet of the Consolidated Reports of Condition and Income for a Bank with Domestic Offices Only—FFIEC 041'' or ''Schedule RC—Balance Sheet of the Consolidated Report of Condition and Income for a Bank with Domestic and Foreign Offices—FFIEC 031,'' as applicable.

Credit union—As defined in 17 Pa.C.S. § 102 (relating to application of title).

FFIEC Call Report—A report promulgated by the Federal Financial Institutions Examinations Council that sets forth consolidated total assets and fiduciary assets.

Fiduciary assets—The sum of the total fiduciary assets in the FFIEC Call Report's ''Schedule RC—T Fiduciary and Related Services of the Consolidated Report of Condition and Income for a Bank with Domestic Offices Only—FFIEC 041.''

NCUA Call Report—A report promulgated by the National Credit Union Administration that sets forth total assets.

Savings association—An association as defined in section 102(3) of the Savings Association Code of 1967 (7 P. S. § 6020-2(3)).

Savings bank—As defined in section 102(x) of the Banking Code.

Total assets—The total assets as reflected on the ''Statement of Financial Condition'' in the NCUA Call Report.

Trust company—As defined in section 102(dd) of the Banking Code.

UFIRS—The Uniform Financial Institutions Rating System.

UITRS—The Uniform Interagency Trust Rating System.

§ 5.2. Semiannual assessment for banks, bank and trust companies, savings banks and savings associations.

 (a) Banks, bank and trust companies, savings banks and savings associations shall pay a semiannual assessment to the Department.

 (b) The semiannual assessment on banks, bank and trust companies, savings banks and savings associations will be calculated as follows:

If the amount of the consolidated total assets is: The semiannual assessment will be:
Over: But not over: Base amount: The excess over: Times (x):
0 $20,000,000 $6,070 + 0 0
$20,000,000 $100,000,000 $6,070 + $20,000,000 0.000112059
$100,000,000 $200,000,000 $15,035 + $100,000,000 0.000072836
$200,000,000 $1,000,000,000 $22,319 + $200,000,000 0.000061631
$1,000,000,000 $2,000,000,000 $71,623 + $1,000,000,000 0.000050425
$2,000,000,000 $6,000,000,000 $122,048 + $2,000,000,000 0.000044822
$6,000,000,000 $20,000,000,000 $301,338 + $6,000,000,000 0.000038139
$20,000,000,000 $835,284 + $20,000,000,000 0.000019409

 (c) Banks, bank and trust companies, savings banks and savings associations will be billed semiannually in December and June based upon the consolidated total assets reported in the immediately preceding FFIEC Call Report.

§ 5.3. Semiannual assessment for trust companies.

 (a) Trust companies shall pay a semiannual assessment to the Department.

 (b) The semiannual assessment on trust companies will be calculated on consolidated total assets plus fiduciary assets as follows:

If the amount of the consolidated total assets is: The semiannual assessment will be:
Over: But not over: Base amount: The excess over: Times (x):
0 $20,000,000 $6,070 + 0 0
$20,000,000 $100,000,000 $6,070 + $20,000,000 0.000112059
$100,000,000 $200,000,000 $15,035 + $100,000,000 0.000072836
$200,000,000 $1,000,000,000 $22,319 + $200,000,000 0.000061631
$1,000,000,000 $2,000,000,000 $71,623 + $1,000,000,000 0.000050425
$2,000,000,000 $6,000,000,000 $122,048 + $2,000,000,000 0.000044822
$6,000,000,000 $20,000,000,000 $301,338 + $6,000,000,000 0.000038139
$20,000,000,000 $835,284 + $20,000,000,000 0.000019409

 plus

If the amount of the fiduciary assets is: The semiannual assessment will be:
Over: But not over: Base amount: The excess over: Times (x):
0 $500,000,000 $6,746 + $0 0
$500,000,000 $1,000,000,000 $13,492 + $500,000,000 0
$1,000,000,000 $10,000,000,000 $13,492 + $1,000,000,000 0.000002689
$10,000,000,000 $100,000,000,000 $37,689 + $10,000,000,000 0.000000449
$100,000,000,000 $78,081 + $100,000,000,000 0.0000001425

 (c) Trust companies will be billed in December and June based upon the consolidated total assets and fiduciary assets reported in the immediately preceding FFIEC Call Report.

§ 5.4. Semiannual assessment for credit unions.

 (a) Credit unions shall pay a semiannual assessment to the Department.

 (b) The semiannual assessment on credit unions will be calculated as follows:

If the amount of the total assets is: The semiannual assessment will be:
Over: But not over: This amount: The excess over: Times (x):
0 $24,503,168 $2,500 + $0 0
$24,503,168 $1,115,871,488 $2,500 + $24,503,168 0.00010739750
$1,115,871,488 $3,376,610,357 $119,842 + $1,115,871,488 0.00003130250
$3,376,610,357 $190,609 + $3,376,610,357 0.00001045000

 (c) Credit unions will be billed in December and June based upon the total assets reported in the immediately preceding NCUA Call Report.

§ 5.5. Adjustments to assessments; invoicing.

 (a) Inflation adjustment to assessments. The Department may increase the amount of assessments generated by the calculations in §§ 5.2—5.4 (relating to semiannual assessment for banks, bank and trust companies, savings banks and savings associations; semiannual assessment for trust companies; and semiannual assessment for credit unions) in an amount up to the increase in the Consumer Price Index indicated by the ''Consumer Price Index—All Urban Consumers: U.S. All Items 1982-84=100'' published by the United States Department of Labor Bureau of Labor Statistics, or other similar index published by the United States Department of Labor Bureau of Labor Statistics, if the projected assessments are insufficient to provide for the Department's budget due to inflation.

 (b) Surcharge based on condition. The Department may increase the amount of a specific assessment generated by the calculations in §§ 5.2—5.4 by:

 (1) Thirty percent for a bank, bank and trust company, savings bank, savings association, trust company or credit union with a UFIRS or UITRS composite rating of 4.

 (2) Fifty percent for a bank, bank and trust company, savings bank, savings association, trust company or credit union with a UFIRS or UITRS composite rating of 5.

 (c) Assessment invoicing. The Department will round the assessments calculated under this chapter to the nearest dollar on the semiannual assessment invoice issued to each assessed entity.

§ 5.6. Implementation schedule.

 (a) General rule. The Department will provide an implementation schedule for banks, bank and trust companies, savings banks, savings associations and trust companies to adjust to the assessments generated by this chapter.

 (b) Implementation schedule. Banks, bank and trust companies, savings banks, savings associations and trust companies shall pay assessments according to the following implementation schedule:

 (1) Seventy percent of the total assessment calculated by §§ 5.2, 5.3 and 5.5 (relating to semiannual assessment for banks, bank and trust companies, savings banks and savings associations; semiannual assessment for trust companies; and adjustments to assessments; invoicing) for the first 12 months after ______  (Editor's Note: The blank refers to the effective date of adoption of this proposed rulemaking.).

 (2) Eighty-five percent of the total assessment calculated by §§ 5.2, 5.3 and 5.5 for the second 12 months after ______ (Editor's Note: The blank refers to the effective date of adoption of this proposed rulemaking.).

 (3) One hundred percent of the total assessment calculated by §§ 5.2, 5.3 and 5.5 for the third 12 months after ______ (Editor's Note: The blank refers to the effective date of adoption of this proposed rulemaking.).

[Pa.B. Doc. No. 13-1665. Filed for public inspection September 13, 2013, 9:00 a.m.]



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