Published: 2015
Key Benefits:
Sec. 06.01.010. Examination fees and assessments.
(a) The expenses of the department reasonably incurred in the examination or investigation of all financial institutions or applications to establish financial institutions regulated by the department under this title shall be charged to and paid by each financial institution as provided in (b) and (d) of this section.
(b) Except for deposit institutions, the commissioner shall assess every financial institution and every applicant to establish a financial institution a fee for the actual expenses necessarily incurred by the department in connection with any examination or investigation, whether regular or special. The commissioner shall assess every deposit institution and every applicant to establish a deposit institution a fee for the actual expenses necessarily incurred by the department in connection with any special examination or investigation. A fee assessed under this subsection must include the proportionate part of the salaries and cost of employee benefits of the examiners while conducting examinations or investigations and while preparing reports of them, and transportation costs and per diem of each examiner while away from the examiner's duty station. The cost to the financial institution in connection with an examination may not exceed the actual cost to the department of the examination. The assessment shall be made by the commissioner as soon as feasible after the examination or investigation has been completed. The assessment must be received by the department within 30 days after receipt of notice of the assessment by the institution.
(c) [Repealed, Sec. 102 ch 26 SLA 1993].
(d) The commissioner shall adopt regulations providing for semiannual assessments of deposit institutions. An assessment must be based on the amount of assets of a deposit institution and must cover, but may not exceed, the aggregate cost of periodic examinations of the deposit institution.
(e) An exam fee or other charge assessed to a state financial institution under this section may not exceed a fee or other charge assessed for the same type of exam or service to a similarly situated federally-chartered financial institution.
(f) In this section "deposit institution" means a state financial institution that has obtained authority from the department to receive deposits of the type eligible to be insured by an agency of the federal government.
Sec. 06.01.015. Examinations.
(a) Financial institutions regulated under this title are subject to at least one examination each year. The department may conduct additional examinations at its discretion.
(b) The department shall select one or more competent persons to make examinations of financial institutions. The examiner shall take and subscribe an oath that
(1) the examiner will honestly and impartially examine into and report the condition of the institution as to assets and liabilities and other information required by the department;
(2) the examiner will not disclose the information the examiner obtains through the examination to a person other than the department;
(3) at the time of employment, the examiner is not obligated to, or the owner of an interest in, the institution and is not an officer or shareholder of the institution;
(4) the examiner does not own more than five percent of the voting shares in another financial institution in the state; and
(5) the examiner is not an officer or employee of another financial institution in the state.
(c) The department shall promptly call to the attention of the directors of an institution irregularities in the conduct of the financial institution's business and any violations. The department shall send a copy of the report of examination to the institution examined.
Sec. 06.01.020. General powers of department.
(a) Notwithstanding other provisions of this title, the department may by regulation authorize financial institutions, except licensees subject to AS 06.20 or AS 06.40, to exercise any of the powers conferred upon, or to be subject to any of the limitations imposed upon, a federally chartered financial institution doing business in this state with deposits insured by an agency of the federal government, if the department finds that the exercise of the power or imposition of the limitation both
(1) serves the public convenience and advantage; and
(2) equalizes and maintains the quality of competition between state financial institutions and federally chartered financial institutions.
(b) The authority granted to the commissioner by this section may not be limited by law unless that law expressly refers to this section.
Sec. 06.01.025. Records of department.
(a) Information in the records of the department obtained through the administration of this title is confidential, is not subject to subpoena, and may be revealed only with the consent of the department.
(b) The department shall retain reports of examinations for five years.
Sec. 06.01.030. Orders and injunctions; notice and hearings.
(a) Whenever it appears to the department that a person is engaging, has engaged, or is about to engage in an unsafe or unsound practice in conducting the business of a financial institution, or is violating, has violated, or is about to violate a provision of this title or a regulation adopted or order issued under this title, the department may
(1) issue and serve on the person a notice of intent to issue an order directing the person to cease and desist from continuing the act or practice, or imposing a penalty under AS 06.01.035 (e) - (g); or
(2) bring an action in the superior court to enjoin the act or practice.
(b) A notice issued under (a)(1) of this section must contain a statement of the facts constituting the alleged violation or the unsafe or unsound practice, and must give reasonable notice of and an opportunity for a hearing to determine whether an order to cease and desist the act or practice should be issued. If a hearing is not requested within 30 days, or if the person served or the person's representative fails to appear at the hearing, the person is considered to have consented to the issuance of the order, and the department may issue the order to cease and desist. If the department finds at the hearing that a violation or an unsafe or unsound practice has been established, the department may issue the order to cease and desist.
(c) A cease and desist order issued under (b) of this section may impose a penalty under AS 06.01.035 (e) - (g) and may require the person to cease and desist from the act or practice and to take affirmative action to correct the conditions resulting from the act or practice.
(d) Notwithstanding the other provisions of this section, the department may issue a temporary cease and desist order at the same time that the department issues a notice under (a)(1) of this section. The department may not issue a temporary cease and desist order under this subsection without a prior hearing unless the order is issued for the sole purpose of preserving the status quo and preventing damage to a financial institution pending completion of any hearing. A temporary cease and desist order issued under this subsection remains in effect until a final order is issued under (b) of this section or until otherwise terminated by the department, except that the order may not remain in effect for more than 60 days.
(e) Except for notices issued under (a)(1) of this section, the department shall give public notice of each proposed action, but the department is not required to hold a hearing before taking the action unless it receives written opposition to the proposed action. Written opposition must be filed with the department within the time specified by the department. In cases involving extraordinary circumstances requiring immediate action, the department may take action without notice and public hearing, but upon application to rescind the action taken, the department shall promptly hold a hearing on the application.
(f) Hearings required or authorized under this title are not subject to AS 44.62.330 - 44.62.630, except as required by AS 44.62.560 and 44.62.570. The department shall adopt regulations, consistent with the provisions of this title, establishing procedures for hearings held under this section.
(g) For the purpose of hearings, investigations, or other proceedings under this title, and except as otherwise provided in this title, the department or an officer designated by the commissioner may administer oaths and affirmations, subpoena witnesses, compel the attendance of witnesses, take evidence, and require the production of books, papers, correspondence, memoranda, agreements, or other documents or records that the department considers relevant or material to the inquiry.
(h) In this section, "unsafe or unsound practice" means
(1) operating a bank while it is in an unsafe or unsound condition;
(2) doing an act that violates a law or order of the department, or the bank's articles or bylaws; or
(3) doing an act reasonably likely to result in a bank's condition becoming unsafe or unsound.
Sec. 06.01.035. Penalties.
(a) A person who knowingly violates, or causes another person to violate, a provision of this title, or a regulation or order of the department under this title, for which a specific remedy is not provided, is guilty of a class A misdemeanor.
(b) A person who, without first receiving a license or certificate of authority from the department, participates in an activity that requires a license or certificate of authority under this title, is guilty of a class A misdemeanor.
(c) A person is guilty of a class C felony if the person, with intent to deceive the department, the commissioner, or a person authorized to examine the affairs of a financial institution, knowingly
(1) makes or causes a false statement or report to be made;
(2) enters a false figure, statement, or entry in the books of a financial institution; or
(3) makes or circulates a false report or statement about the condition of a financial institution.
(d) A director, officer, or employee of a financial institution who receives a deposit, after having been notified by regulatory authorities that the institution is insolvent and without the department's prior approval, is guilty of a class C felony.
(e) In addition to other penalties applicable under this section, if a person other than a financial institution knowingly or intentionally violates, or causes another person to violate, a provision of this title, or a regulation or order of the department under this title, the department may issue an order against the person imposing a civil penalty of not more than $2,500 a day for a single violation, and not more than $25,000 for multiple violations that constitute a single proceeding or a series of related proceedings.
(f) In addition to other penalties applicable under this section, if a financial institution knowingly or intentionally violates a provision of this title, or a regulation or order of the department under this title, the department may issue an order against the institution imposing a civil penalty of not more than $5,000 a day for a single violation, and not more than $50,000 for multiple violations that constitute a single proceeding or a series of related proceedings.
(g) For violations not covered by (e) or (f) of this section, and in addition to other penalties applicable under this section, if a person, including a financial institution, violates, or causes another person to violate, a provision of this title, or a regulation or order of the department under this title, the department may issue an order against the person imposing a civil penalty of not more than $500 a day for a single violation, and not more than $5,000 for multiple violations that constitute a single proceeding or a series of related proceedings.
(h) A financial institution that fails to file a report or make payments required by the department within the time specified in this title is subject to a penalty of not more than $100 a day for each day the report or payment is late. A financial institution is considered to have transmitted a report or payment when the institution mails the report or payment, properly addressed to the department and with the appropriate postage.
(i) In addition to other penalties applicable under this section, the department shall dismiss an employee of the department who violates AS 06.05.065(a). An employee dismissed under this subsection is forever disqualified from holding a position in the department relating to the regulation of financial institutions. An employee who is dismissed under this subsection may appeal the dismissal under AS 39.25 (State Personnel Act), unless the employee is in the exempt or partially exempt service under AS 39.25.110 - 39.25.120.
Sec. 06.01.040. Examination policy.
It shall be the policy of the department to conduct, whenever reasonably possible, joint examinations with the Federal Deposit Insurance Corporation of those institutions subject to this title whose accounts are insured through that corporation.
Sec. 06.01.045. Accounting and disposition of fees. [Repealed, Sec. 28 ch 90 SLA 1991].
Repealed or Renumbered
Sec. 06.01.048. Regulations.
Regulations required or authorized under this title shall be adopted under AS 44.62 (Administrative Procedure Act).
Sec. 06.01.050. Definitions.
In this chapter, unless the context otherwise requires,
(1) "commissioner" means the commissioner of commerce and economic development or a designee of the commissioner;
(2) "department" means the Department of Commerce and Economic Development;
(3) "financial institution" means an institution subject to the regulation of the department under this title.
Chapter 06.05. ALASKA BANKING CODEArticle 01. POWERS OF THE DEPARTMENT
Sec. 06.05.005. Powers of department.
(a) The department shall
(1) exercise general supervision over all state financial institutions and their subsidiaries and affiliated corporations;
(2) adopt regulations necessary to implement this chapter, including regulations providing for the retention and preservation of bank records;
(3) review and approve or disapprove applications for new state banks under AS 06.05.345 , new bank branches under AS 06.05.399 , and international or interstate branch banks under AS 06.05.555 ;
(4) issue permits authorizing bank holding companies to do business in this state under AS 06.05.235 and 06.05.570;
(5) determine for each state bank the amount of paid-in capital necessary to operate under AS 06.05.305 (a);
(6) review and approve transfers of bank ownership under AS 06.05.327;
(7) perform examinations of state banks, branch banks, and subsidiaries under AS 06.01.015 .
(b) The department may
(1) relieve a bank from the examination requirements of AS 06.01.015 if the bank's deposits are insured by the Federal Deposit Insurance Corporation or another agency of the United States that insures bank deposits;
(2) approve under AS 06.05.166 (f) the operation of a branch bank on a schedule different than normal banking days;
(3) approve under AS 06.05.426 the operation by a state bank of an automated teller machine at a location other than the bank's premises;
(4) approve certain bank subsidiaries under AS 06.05.272 ;
(5) approve under AS 06.05.205 (d) the acceptance by a bank of the bank's stock or of the stock of the bank's holding company as security for a loan in certain circumstances;
(6) restrict the withdrawal of deposits from a state bank where the department finds that extraordinary circumstances make restriction necessary for the proper protection of depositors;
(7) require a state bank to
(A) maintain its capital and reserve accounts in amounts determined appropriate by the department, considering the size of the bank;
(B) observe the methods and standards that the bank adopts for determining the value of various types of assets;
(C) charge off part or all of an asset that has not been lawfully acquired;
(D) write down an asset to its market value;
(E) record liens and other interests in property;
(F) obtain a financial statement from a borrower or prospective borrower to the extent that the bank can obtain the statement;
(G) obtain insurance against damage to real property taken as security;
(H) search, or obtain insurance of, the title to real property taken as security;
(I) maintain adequate insurance against other risks as the department determines necessary and appropriate for the protection of depositors and the public;
(J) charge off that portion of an asset classified as a loss, or charge off or reserve up to 50 percent of loans classified as doubtful, in a state or federal report of examination; or
(K) charge off all debts owed to the bank in which interest is past due and unpaid for a period of six months, unless the debt principal is adequately secured and the bank is in the process of collection;
(8) require the board of directors of a bank to hold a meeting under AS 06.05.438 (f);
(9) order the removal of a board member of a bank under AS 06.05.435(g);
(10) order a bank to suspend the payment of dividends under AS 06.05.441(b);
(11) require a bank to increase its capital accounts under AS 06.05.305(c);
(12) take possession of a bank in the manner provided in AS 06.05.468(c), and operate, reorganize, or liquidate the bank under AS 06.05.470 - 06.05.474 after taking possession under this paragraph;
(13) issue an order under AS 06.01.030 that the department determines is necessary to ensure compliance with this chapter and regulations adopted under this chapter; and
(14) exercise other powers expressly or implicitly granted in this chapter.
Sec. 06.05.010. Notice and hearing. [Repealed, Sec. 54 ch 169 SLA 1978. For current law, see AS 06.01.030 ].
Repealed or Renumbered
Sec. 06.05.015. - 06.05.040. Powers over state banks; miscellaneous powers of department; bank examinations; banks exempt from examination; examination fee; examiner's oath. [Repealed, Sec. 102 ch 26 SLA 1993].
Repealed or Renumbered
Sec. 06.05.045. Bank reports to the department.
(a) Each state bank shall make at least four reports of condition each year to the department on days designated by, and on forms prescribed by, the department. The report shall be signed by a duly authorized officer of the bank, and shall be verified by at least three directors who certify under oath that they and each of them have personal knowledge of the facts stated in the report and that the facts are true. The reports shall exhibit in detail and under appropriate heads the resources and liabilities of the bank, and must be received by the department within 30 calendar days after the end of the period covered by the report.
(b) The department may require special reports from a bank whenever in its judgment they are necessary in order to obtain a full knowledge of its condition.
(c) Each state bank shall make at least one report of income and dividends to the department each year. The report shall be submitted to the department within 30 days following the end of the calendar year covered in the report.
Sec. 06.05.050. Publication of reports.
All reports of condition required by AS 06.05.045 (a) shall be published immediately in condensed form at least once in a newspaper of general circulation published in the place where the bank is located. If no newspaper is published in that place, then the report shall be published in the newspaper published nearest to that place.
Sec. 06.05.055. , 06.05.060. Annual report of department; records of department. [Repealed, Sec. 102 ch 26 SLA 1993].
Repealed or Renumbered