On September 14, 2013, the Pennsylvania Department of Banking and Securities (“DOBS”) published a notice of proposed rulemaking in thePennsylvania Bulletin to implement an updated assessment schedule for Pennsylvania state-chartered financial institutions, trust companies and credit unions. 43 Pa.B. 5455.
The Department of Banking and Securities Code, 71 P.S. 733-101 et seq., provides the DOBS with the authority to assess institutions the cost of examination or investigation of that entity. 71 P.S. § 733-204. Those assessment fees are deposited into the “Banking Fund” and are used to pay the operational costs of the DOBS. 71 P.S. § 733-1113-A(b)(i) and (c). From July 1, 1996 through June 30, 2012, the General Assembly had the power to appropriate monies in the Banking Fund for the budgets of the DOBS or other commonwealth agencies. 71 P.S. § 733-1113-A(e)(1). Beginning July 1, 2012, the General Assembly would no longer have the capacity to appropriate from the Banking Fund. 71 P.S. § 733-1113-A(e)(2).
The assessments paid by state banks, bank and trust companies, savings banks, savings associations, trust companies, and credit unions have not been raised since the 1990s. The stated purpose of the proposed rulemaking is to implement the new assessment schedule, streamline reporting and billing requirements, and provide “adequate and sustainable funding” for the DOBS. 43 Pa.B. 5455.
The DOBS proposes semi-annual assessments to be made by each entity that will be calculated based on a formula using the entity’s consolidated total assets. See proposed sections 5.2 through 5.4. The formula calculates assessments by taking a base amount plus the excess over the base amount, and multiplying it by a stated multiplier. Id. The notice published in the Pennsylvania Bulletin states that, if approved, the increased assessments for Pennsylvania state-chartered institutions would still be “significantly lower than current assessments paid by similar Federally-chartered institutions operating in this Commonwealth.” 43 Pa.B. 5455. See the Comptroller of the Currency’s assessment rates here, and the Federal Deposit Insurance Corporation’s assessment rates here.
The regulation proposes that the DOBS may increase assessments because of inflation and to assess a surcharge to certain entities based on their composite rating. See proposed section 5.5. If approved by the Independent Regulatory Review Committee, the assessment increases would be phased in over a 12-month period. See proposed section 5.6.
Any interested persons may submit comments on the proposed regulation to the DOBS by October 14, 2013.
The proposed regulation may be viewed here.