Connecticut Senate Bill SB01109

Connecticut 2011 Regular Session

• Introduced: 3/2/11
• Refer: 3/2/11
• Report Pass: 3/15/11
• Refer: 3/21/11
• Report Pass: 3/28/11
• Engrossed: 4/27/11
• Report Pass: 4/28/11
• Chaptered: 6/7/11
• Enrolled: 6/7/11
• Passed: 6/13/11

Caption

An Act Concerning Banks.

Impact

The changes brought about by SB01109 are expected to modernize the oversight capabilities of the Connecticut banking commissioner. By mandating contracts with data processors, the bill aims to improve the security of customer information and ensure that financial institutions take proper accountability for outsourced services. Additionally, provisions concerning the maintenance of eligible collateral for public deposits have been clarified, which will enhance the protection of public funds against potential losses from financial failures.

Summary

Senate Bill No. 01109, also known as An Act Concerning Banks, proposes significant changes to the regulatory framework governing banks and credit unions in Connecticut. The bill updates various sections of the general statutes to enhance the regulation of these financial institutions, including introducing new measures for managing electronic data processing services. Specifically, it requires banks and credit unions that outsource their data processing to enter detailed contracts with service providers, ensuring that the commissioner can examine the service provider's operations to protect customer information.

Sentiment

The reception of SB01109 has generally been positive among legislative supporters who view it as a necessary update to the state's banking regulations. Advocates argue that these updates are crucial for adapting to the evolving landscape of financial services and technological advancements. However, some stakeholders have expressed concerns regarding the implementation costs associated with compliance for smaller financial institutions, fearing that such regulations could disproportionately affect them.

Contention

While the bill has significant support, there are points of contention regarding the scope and potential burden of these new regulations. Critics argue that the requirements for electronic data processing contracts might impose undue costs and administrative work, particularly for small banks and credit unions. There is a concern that the increased regulatory burden could lead to reduced competition in the financial sector as smaller institutions may find it challenging to comply with the stricter oversight.