Stricken language would be deleted from and underlined language would be added to present law.
Act 475 of the Regular Session
*ANS309* 3/14/2023 11:03:35 AM ANS309
State of Arkansas 1
94th General Assembly A Bill 2
Regular Session, 2023 SENATE BILL 418 3
4
By: Senator J. Dismang 5
By: Representative Maddox 6
7
For An Act To Be Entitled 8
AN ACT TO TRANSFER T HE ADMINISTRATIVE FU NCTIONS OF 9
THE STATE SECURITIES DEPARTMENT TO THE ST ATE BANK 10
DEPARTMENT; TO AMEND THE LAW CONCERNING T HE 11
ORGANIZATION OF THE STATE SECURITIES DEP ARTMENT; AND 12
FOR OTHER PURPOSES. 13
14
15
Subtitle 16
TO TRANSFER THE ADMINISTRATIVE FUNCTIONS 17
OF THE STATE SECURITIES DEPARTMENT TO THE 18
STATE BANK DEPARTMENT; AND TO AMEND THE 19
LAW CONCERNING THE ORGANIZATION OF THE 20
STATE SECURITIES DEPARTMENT. 21
22
23
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24
25
SECTION 1. DO NOT CODIFY. Transfer of administrative functions of 26
State Securities Department to State Bank Department. 27
(a) The administrative functions of the State Securities Department 28
are transferred within the Department of Commerce to the Sta te Bank 29
Department. 30
(b) The statutory authority, powers, duties, functions, records, 31
personnel, property, and unexpended balances of appropriations, allocations, 32
and other funds, including the functions of budgeting or purchasing of the 33
State Securities Department remain with the State Securities Department 34
subsequent to the transfer under subsection (a) of this section. 35
(c)(1) The transfer under subsection (a) of this section does not 36 SB418
2 3/14/2023 11:03:35 AM ANS309
affect the orders, rules, directives, registration, licensing, or st andards 1
made or promulgated by the State Securities Department before or after the 2
effective date of this act. 3
(2) The orders, rules, directives, registration, licensing, or 4
standards of the State Securities Department shall continue to be in effect 5
until they are amended or repealed under authority given by law. 6
7
SECTION 2. Arkansas Code § 4 -30-207(a), the authority of the 8
Securities Commissioner over certain cooperative banks, is amended to read as 9
follows: 10
(a)(1) Every cooperative bank organized u nder this chapter prior to 11
March 22, 1937, which is not situated in a city, town, or community in which 12
there is also situated a state or national bank or a teller's window branch 13
thereof is declared to be an investment company and shall be placed under th e 14
regulation and supervision of the State Securities Department, in the same 15
manner as now provided by law for other investment companies. 16
(2) The Securities Commissioner, in consultation with the 17
Secretary of the Department of Commerce and the Bank Commissioner, is 18
authorized, empowered, and directed to make and promulgate all such rules not 19
inconsistent herewith as shall be necessary or convenient for the 20
administration and carrying out of this subchapter and for the supervision 21
and control of all such organizations. 22
23
SECTION 3. Arkansas Code § 15 -4-1228 is amended to read as follows: 24
15-4-1228. Investigations by Bank Commissioner or and Securities 25
Commissioner — Injunctions. 26
(a) The Bank Commissioner may investigate, either upon complaint or 27
otherwise, when it appears that a county or regional industrial development 28
company is conducting its business in an unsafe and injurious manner or in 29
violation of this subchapter or the rules promulgated under this subchapter 30
by the Bank Commissioner or w hen it appears that any person is engaging in 31
the business without being approved under the provisions of this subchapter. 32
(b) The Securities Commissioner , in consultation with the Bank 33
Commissioner, may investigate, either upon complaint or otherwise, w hen it 34
appears that a county or regional industrial development company is offering 35
its securities in violation of § 15 -4-1220 or is otherwise violating the 36 SB418
3 3/14/2023 11:03:35 AM ANS309
provisions of Arkansas law that come under the jurisdiction of the Securities 1
Commissioner. 2
(c)(1) Subject to the jurisdictional provisions of subsections (a) and 3
(b) of this section, whenever it appears upon sufficient grounds or evidence 4
satisfactory to the Bank Commissioner or the Securities Commissioner , in 5
consultation with the Bank Commissioner, that any county or regional 6
industrial development company has engaged in or is about to engage in any 7
act or practice in violation of this subchapter or any rule or order under 8
this subchapter, or the assets or capital of any county or regional 9
industrial development company is impaired or the county or regional 10
industrial development company's affairs are in an unsafe condition, the Bank 11
Commissioner or the Securities Commissioner , in consultation with the Bank 12
Commissioner, may: 13
(A) Refer the eviden ce which is available concerning 14
violations of this subchapter or any rule or order under this subchapter to 15
the appropriate agency, which may institute the appropriate corrective action 16
or proceedings with or without the reference; or 17
(B)(i) Summarily order the county or regional industrial 18
development company to cease and desist from the act or practice during the 19
time the Bank Commissioner or the Securities Commissioner , in consultation 20
with the Bank Commissioner, may apply to the Pulaski County Circ uit Court to 21
enjoin the act or practice and to enforce compliance with this subchapter or 22
any rule or order under this subchapter. 23
(ii) However, the Bank Commissioner or the 24
Securities Commissioner , in consultation with the Bank Commissioner, may 25
apply directly to the Pulaski County Circuit Court for injunctive relief 26
without issuing a cease and desist order. 27
(2) Upon a proper showing, a permanent or temporary injunction, 28
restraining order, or writ of mandamus shall be granted and a receiver or 29
conservator may be appointed for the county or regional industrial 30
development company or its assets. 31
(3) The court may not require the Bank Commissioner or the 32
Securities Commissioner , in consultation with the Bank Commissioner, to post 33
a bond. 34
(4) In addition to any other remedy provided in this subchapter 35
or under applicable law, the costs of the Bank Commissioner or the Securities 36 SB418
4 3/14/2023 11:03:35 AM ANS309
Commissioner, in consultation with the Bank Commissioner, incurred in 1
successfully prosecuting violations of this subchapter may be imposed by the 2
court as additional damages payable by the company. 3
(d) A copy of all reports of the investigation or other proceedings 4
conducted pursuant to this section shall be forwarded to the Secretary of the 5
Department of Finance and Administration. 6
7
SECTION 4. Arkansas Code § 18 -50-102(a)(2), concerning the authority 8
of the Bank Commissioner or the Securities Commissioner to foreclose on a 9
mortgage or deed of trust, is amended to read as follows: 10
(2) A state-chartered bank, nationally chartered bank, state -11
chartered or federally chartered savings and loan association, state -12
chartered or federally chartered credit union, or a mortgage loan company 13
subject to licensing, supervision, and auditing by a federal agency, a 14
government-sponsored enterprise, and the Bank Commissioner or Securities 15
Commissioner, in consultation with the Bank Commissioner, as applicable, as 16
an approved mortgage loan servicer authorized to do business under the laws 17
of the State of Arkansas if the state -chartered bank, nationally chartered 18
bank, state-chartered or federally chartered savings and loan association, 19
state-chartered or federally chartered credit union, or mortgage loan 20
company: 21
(A) Has a physical business location open for business for 22
normal banking hours located within the State of Arkansas; 23
(B) Is either the holder or the mortgage loan servicer for 24
the holder of a note secured by a mortgage or deed of trust; and 25
(C) Does not collect a fee or cost for any action taken 26
under this chapter unless authorized by a court order; or 27
28
SECTION 5. Arkansas Code § 23 -35-201 is amended to read as follows: 29
23-35-201. Credit Union Division — State Credit Union Supervisor — 30
Staff. 31
(a) There is created under the State Securities Department a Cr edit 32
Union Division which shall be administered by the State Credit Union 33
Supervisor. The Securities Commissioner, in consultation with the Secretary 34
of the Department of Commerce and the Bank Commissioner , shall act as State 35
Credit Union Supervisor. 36 SB418
5 3/14/2023 11:03:35 AM ANS309
(b) The supervisor, in consultation with the Secretary of the 1
Department of Commerce and the Bank Commissioner , shall appoint such 2
administrative assistants and examiners as may be necessary to assist in the 3
performance of his or her duties under this chapter . 4
5
SECTION 6. Arkansas Code § 23 -37-206(b)(1), concerning the Supervisor 6
of Savings and Loan Associations, is amended to read as follows: 7
(b)(1)(A) The Securities Commissioner, in consultation with the 8
Secretary of the Department of Commerce and the Bank Commissioner, shall act 9
as Supervisor of Savings and Loan Associations. 10
(B) He or she The Securities Commissioner may appoint an 11
assistant securities commissioner responsible for financial institutions to 12
act as the Assistant Supervisor of Savings a nd Loan Associations and perform 13
all duties delegated by the commissioner Securities Commissioner . 14
15
SECTION 7. Arkansas Code § 23 -42-201(a), concerning the administration 16
of the State Securities Department by the Securities Commissioner, is amended 17
to read as follows: 18
(a)(1) This chapter shall be administered by the Securities 19
Commissioner, who shall be appointed by the Governor and who shall serve at 20
the pleasure of the Governor . 21
(2) The commissioner shall report to the Secretary of the 22
Department of Commerce Except as provided in subdivision (a)(3) of this 23
section, the Securities Commissioner shall: 24
(A) Be appointed by the Governor and serve at the pleasure 25
of the Governor; and 26
(B) Report to the Bank Commissioner. 27
(3) The Bank Commissio ner may act as the Securities 28
Commissioner. 29
30
SECTION 8. Arkansas Code § 25 -43-302(a)(26), concerning the state 31
entities within the Department of Commerce is amended to read as follows: 32
(26) The State Securities Department, created under the Arkansas 33
Securities Act, § 23-42-101 et seq., within the State Bank Department. 34
35
APPROVED: 4/4/23 36