EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0550*
SENATE BILL 550
I1 3lr0090
CF HB 548
By: The President (By Request – Administration) and Senators Augustine,
Benson, Carter, Elfreth, Ellis, Feldman, Gile, Hayes, Hettleman, Kagan,
King, Hester, Jackson, Lam, McCray, Muse, Waldstreicher, M. Washington,
Watson, West, and Zucker
Introduced and read first time: February 6, 2023
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Financial Regulation – Maryland Community Investment Venture Fund – 2
Establishment 3
(Access to Banking Act) 4
FOR the purpose of authorizing the establishment of a Maryland Community Investment 5
Venture Fund by the Commissioner of Financial Regulation for certain purposes; 6
providing for certain assessment offset credits for certain banking institutions and 7
credit unions that establish de novo branches or maintain branches in certain areas; 8
authorizing the use of the Banking Institution and Credit Union Regulation Fund for 9
certain purposes; and generally relating to financial regulation and the assessment of 10
banking institutions and credit unions. 11
BY repealing and reenacting, with amendments, 12
Article – Financial Institutions 13
Section 2–118, 5–203, and 6–712 14
Annotated Code of Maryland 15
(2020 Replacement Volume and 2022 Supplement) 16
BY adding to 17
Article – Financial Institutions 18
Section 2–118.1 19
Annotated Code of Maryland 20
(2020 Replacement Volume and 2022 Supplement) 21
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
That the Laws of Maryland read as follows: 23
Article – Financial Institutions 24 2 SENATE BILL 550
2–118. 1
(a) In this section, “Fund” means the Banking Institution and Credit Union 2
Regulation Fund established under this section. 3
(b) There is a Banking Institution and Credit Union Regulation Fund that 4
consists of: 5
(1) All revenue received for the chartering and regulation of persons who 6
engage in the business of a banking institution or credit union under this article; and 7
(2) Any other fee, assessment, or revenue received by the Commissioner 8
from banking institutions and credit unions under this article. 9
(c) Notwithstanding subsection (b) of this section, the Commissioner shall pay all 10
fines and penalties collected by the Commissioner from banking institutions and credit 11
unions under this article into the General Fund of the State. 12
(d) The purpose of the Fund is to pay all the costs and expenses incurred by the 13
Commissioner that are related to the regulation of banking institutions and credit unions 14
under this article, including: 15
(1) Expenditures authorized under this article; [and] 16
(2) INVESTMENTS AUTHORIZE D UNDER § 2–118.1 OF THIS SUBTITLE; 17
AND 18
[(2)] (3) Any other expense authorized in the State budget. 19
(e) (1) All the costs and expenses of the Commissioner relating to the 20
regulation of banking institutions and credit unions under this article shall be included in 21
the State budget. 22
(2) Any expenditures from the Fund to cover costs and expenses of the 23
Commissioner may be made only: 24
(i) By an appropriation from the Fund approved by the General 25
Assembly in the annual State budget; or 26
(ii) By the budget amendment procedure provided for in § 7–209 of 27
the State Finance and Procurement Article. 28
(3) If, in any given fiscal year, the amount of the revenue collected by the 29
Commissioner and deposited into the Fund exceeds the actual appropriation for the 30
Commissioner to regulate banking institutions and credit unions under this article, the 31
excess amount shall be carried forward within the Fund. 32 SENATE BILL 550 3
(f) (1) The State Treasurer is the custodian of the Fund. 1
(2) The State Treasurer shall deposit payments received from the 2
Commissioner into the Fund. 3
(g) (1) The Fund is a continuing, nonlapsing fund that is not subject to § 4
7–302 of the State Finance and Procurement Article, and may not be deemed a part of the 5
General Fund of the State. 6
(2) Unless otherwise provided by law, no part of the Fund may revert or be 7
credited to: 8
(i) The General Fund of the State; or 9
(ii) A special fund of the State. 10
2–118.1. 11
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 12
INDICATED. 13
(2) “LOW– TO MODERATE –INCOME TRACT ” HAS THE MEANING 14
STATED IN § 5–203 OF THIS ARTICLE. 15
(3) “PRIVATE VENTURE FUND ” MEANS THE SEPARATE E NTITY OR 16
ENTITIES CHARTERED I N ACCORDANCE WITH SU BSECTIONS (B) AND (K) OF THIS 17
SECTION. 18
(B) (1) THE COMMISSIONER MAY INVEST IN A MARYLAND COMMUNITY 19
INVESTMENT VENTURE FUND. 20
(2) THE MARYLAND COMMUNITY INVESTMENT VENTURE FUND IS A 21
PRIVATE VENTURE FUND THAT IS A SEPARATELY CHARTER ED EQUITY FUND USING 22
BOTH PUBLIC AND PRIV ATE INVESTMENT FUNDS . 23
(3) THE PURPOSE OF THE PR IVATE VENTURE FUND I S TO DEVELOP 24
OPPORTUNITIES FOR BA NKING INSTITUTIONS AND CREDIT UNIONS TO BETTER 25
SERVE THE NEEDS OF L OW– TO MODERATE –INCOME TRACTS BY : 26
(I) INVESTING IN THE DEVELOPMENT OF FINANCIAL PRODUCT 27
OR FINANCIAL PRODUCT UNDERWRITING INNOVAT IONS THAT WILL ENHANCE 28
ACCESS TO CAPITAL , FUNDING, AND OTHER FINANCIAL SERVICES FOR BUSINES SES 29
IN LOW– TO MODERATE –INCOME TRACTS IN MARYLAND; 30
4 SENATE BILL 550
(II) DEPLOYING, TESTING, AND EVALUATING THESE 1
INNOVATIONS FOR PROV IDING CAPITAL AND FUNDING TO BUSINESSES IN LOW – TO 2
MODERATE–INCOME TRACTS IN MARYLAND; AND 3
(III) PROMOTING AND MAKING THESE INNOVATIONS AV AILABLE 4
TO A VARIETY OF BANKING INSTITUTIONS AND CREDIT UNIONS FOR USE IN 5
ENHANCING ACCESS TO CAPITAL, FUNDING, AND OTHER FINANCIAL SERVICES FOR 6
BUSINESSES IN LOW– TO MODERATE–INCOME TRACTS IN MARYLAND. 7
(C) THE COMMISSIONER MAY EXPEND UP TO $250,000 FROM THE BANKING 8
INSTITUTION AND CREDIT UNION REGULATION FUND UNDER § 2–118 OF THIS 9
SUBTITLE TO COVER THE EXPENSE S ASSOCIATED WITH CH ARTERING AND 10
ORGANIZING THE PRIVA TE VENTURE FUND , INCLUDING ACCOUNTING , ADVISORY, 11
THIRD–PARTY SERVICE PROVID ER, MARKETING, AND OTHER NECESSARY 12
EXPENSES. 13
(D) TO ENCOURAGE PRIVATE INVESTMENT, THE COMMISSIONER MAY 14
PROVIDE THE INITIAL EQUITY CAPITAL INVES TMENT IN THE PRIVATE VENTURE 15
FUND IN AN AMOUNT UP TO $2,500,000 FROM THE BANKING INSTITUTION AND 16
CREDIT UNION REGULATION FUND. 17
(E) THROUGH JUNE 30, 2028, THE COMMISSIONER MAY MATCH ANY 18
INVESTMENT MADE IN T HE PRIVATE VENTURE FUND BY A BANKING INSTITUTION OR 19
CREDIT UNION UP TO T HE AMOUNT OF THE ASS ESSMENT CREDIT EARNE D BY THAT 20
BANKING INSTITUTION OR CREDIT UNION UNDE R § 5–203(C) OR § 6–712(C)(4) OF 21
THIS ARTICLE. 22
(F) THE COMMISSIONER MAY NOT MAKE ANY FURTHER INVESTM ENTS IN 23
THE PRIVATE VENTURE FUND AFTER JUNE 30, 2028. 24
(G) ANY AND ALL INVESTMEN T RETURNS OR RETURN OF CAPITAL FROM 25
THE PRIVATE VENTURE FUND WITH RESPECT TO ANY INVESTMENT AUTHO RIZED BY 26
THE COMMISSIONER SHALL BE THE PROPERTY OF THE BANKING INSTITUTION AND 27
CREDIT UNION REGULATION FUND. 28
(H) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 29
COMMISSIONER MAY NEGOTIATE APPROPRIAT E GOVERNANCE STRUCTU RES FOR 30
THE PRIVATE VENTURE FUND WITH OTHER INVE STORS. 31
(2) THE COMMISSIONER OR A REP RESENTATIVE OF THE 32
COMMISSIONER SHALL AL WAYS SERVE ON THE BO DY GOVERNING THE PRI VATE 33
VENTURE FUND . 34
SENATE BILL 550 5
(3) (I) THE PURPOSE OF THE PR IVATE VENTURE FUND M AY NOT BE 1
ALTERED OR AMENDED W ITHOUT THE CONSENT O F THE COMMISSIONER . 2
(II) ANY ALTERED OR AMENDE D PURPOSE MUST REMAIN 3
CONSISTENT WITH THIS S ECTION. 4
(I) AT THE DIRECTION OF T HE COMMISSIONER , AND IN ADDITION TO A NY 5
CUSTOMARY AND APPROP RIATE AUDITS OF THE FUND, THE PRIVATE VENTURE 6
FUND SHALL BE REQUIR ED TO ENGAGE AN INDE PENDENT THIRD PARTY 7
DESIGNATED BY THE COMMISSIONER ON A N ANNUAL BASIS TO EV ALUATE WHETHER 8
ALL INVESTMENTS MEET THE CRITERIA ESTABLI SHED BY THIS SECTION . 9
(J) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 10
DIVISION II OF THE STATE FINANCE AND PROCUREMENT ARTICLE DOES NOT 11
APPLY TO A SERVICE T HAT THE COMMISSIONER OBTAINS UNDER THIS SECTION . 12
(2) THE COMMISSIONER IS SUBJE CT TO TITLE 12, SUBTITLE 4 OF 13
THE STATE FINANCE AND PROCUREMENT ARTICLE FOR SERVICES CONTRACTED 14
UNDER SUBSECTION (C) OR (K) OF THIS SECTION. 15
(K) (1) TO THE EXTENT THE COMMISSION ER DETERMINES THAT 16
SEPARATE PRIVATE VEN TURE FUNDS ARE NECES SARY TO ACCOMPLISH T HE 17
PURPOSE OF THE PRIVA TE VENTURE FUND , THE COMMISSIONER MAY EXPE ND 18
FUNDS TO CHARTER AND ORGANIZE ADDITIONAL PRIVATE VENTURE FUND S. 19
(2) ANY ADDITIONAL PRIVATE VE NTURE FUND S CHARTERED AND 20
ORGANIZED UNDER THIS SUBSECTION ARE SUBJECT TO THE REQUIREMENTS AND 21
LIMITATIONS OF THIS SECTION ON THE MARYLAND COMMUNITY INVESTMENT 22
VENTURE FUND UNDER SUBSECTION (B) OF THIS SECTION , INCLUDING THE 23
AGGREGATE EXPENSE AN D INVESTMENT LIMITAT IONS STATED IN SUBSECTIONS (C) 24
THROUGH (F) OF THIS SECTION. 25
5–203. 26
(a) (1) IN THIS SECTION , UNLESS THE CONTEXT C LEARLY REQUIRES 27
OTHERWISE, THE FOLLOWING WORDS HAVE THE MEANINGS IN DICATED. 28
(2) “BRANCH” MEANS A DEPOSIT –TAKING OFFICE OF A B ANKING 29
INSTITUTION IN MARYLAND OTHER THAN T HE MAIN OFFICE AS DE FINED BY THE 30
FEDERAL DEPOSIT INSURANCE CORPORATION . 31
(3) “DE NOVO BRANCH ” HAS THE MEANING STATED IN § 5–1001 OF 32
THIS TITLE WITH RESPECT TO A BANKING INSTITUTIO N. 33
6 SENATE BILL 550
(4) “DEPOSIT GROWTH CAP ” MEANS TH E YEAR–OVER–YEAR 1
PERCENTAGE CHANGE OF DOMESTIC OFFICE DEPO SITS AS REPORTED DECEMBER 2
31 EACH YEAR BY THE FEDERAL DEPOSIT INSURANCE CORPORATION IN THE 3
FEDERAL DEPOSIT INSURANCE CORPORATION QUARTERLY BANK PROFI LE. 4
(5) “DEPOSITS” MEANS DEPOSITS ORIGI NATED AND HOUSED AT A 5
BRANCH LOCATED IN A LOW– TO MODERATE –INCOME TRACT AS REPO RTED BY A 6
BANKING INSTITUTION TO THE FEDERAL DEPOSIT INSURANCE CORPORATION 7
EACH YEAR AS OF JUNE 30. 8
(6) “LOW– TO MODERATE –INCOME TRACT ” MEANS A CENSUS TRACT 9
DELINEATED BY THE U.S. BUREAU OF THE CENSUS IN THE MOST RE CENT 10
DECENNIAL CENSUS AS PUBLISHED BY THE FEDERAL FINANCIAL INSTITUTIONS 11
EXAMINATION COUNCIL THAT CORRESPO NDS TO LOW – TO MODERATE –INCOME 12
LEVEL CLASSIFICATION S AS DEFINED BY THE REGULATION OF THE FEDERAL 13
RESERVE BOARD IMPLEMENTING THE FEDERAL COMMUNITY REINVESTMENT ACT, 14
12 C.F.R. 228.12. 15
(B) The Commissioner shall impose annual assessments on each banking 16
institution as provided in this section, to cover the expense of regulating banking 17
institutions. 18
[(b)] (C) (1) Except as provided in paragraph (2) of this subsection, the 19
Commissioner shall assess each banking institution the sum of: 20
(i) $8,000; plus 21
(ii) 1. 12 cents for each $1,000 of the assets of the institution over 22
$50,000,000, but not more than $250,000,000; 23
2. 10 cents for each $1,000 of assets over $250,000,000, but 24
not more than $500,000,000; 25
3. 9 cents for each $1,000 of assets over $500,000,000, but not 26
more than $1,000,000,000; 27
4. 8 cents for each $1,000 of assets over $1,000,000,000, but 28
not more than $10,000,000,000; and 29
5. 7 cents for each $1,000 of assets over $10,000,000,000. 30
(2) If a banking institution is not in the business of accepting deposits or 31
retaining funds in a deposit account as defined in § 5–509 of this title, the Commissioner 32
shall assess the banking institution the sum of: 33
SENATE BILL 550 7
(i) $5,000; plus 1
(ii) 1. 0.3 cents for each $1,000 of managed assets held in a 2
fiduciary capacity up to $5,000,000,000; 3
2. 0.2 cents for each $1,000 of managed assets held in a 4
fiduciary capacity over $5,000,000,000, but not more than $20,000,000,000; 5
3. 0.1 cent for each $1,000 of managed assets held in a 6
fiduciary capacity over $20,000,000,000 up to $27,500,000,000; 7
4. 0.2 cents for each $1,000 of nonmanaged and custodial 8
assets held in a fiduciary capacity up to $5,000,000,000; and 9
5. 0.1 cent for each $1,000 of nonmanaged and custodial 10
assets held in a fiduciary capacity over $5,000,000,000 up to $20,000,000,000. 11
(3) The assessments shall be based on assets stated in a banking 12
institution’s most recent financial report. 13
(D) A WELL–CAPITALIZED BANKING INSTITUTION WITH A COMPOSITE 14
CAMELS RATING OF 1 OR 2 MAY FILE WITH THE COMMISSIONER A REQUES T FOR 15
AN ASSESSMENT OFFSET CREDIT OF: 16
(1) 12 CENTS FOR EACH $1,000 OF DEPOSITS IN A DE NOVO BRANCH 17
LOCATED IN A LOW – TO MODERATE –INCOME TRACT FOR THE FIRST 5 YEARS AFTER 18
THE DATE THE BRANCH OPENED; OR 19
(2) 6 CENTS FOR EACH $1,000 OF DEPOSITS IN A BRA NCH LOCATED IN 20
A LOW– TO MODERATE –INCOME TRACT NOT TO EXCEED THE DEPOSIT G ROWTH CAP. 21
[(c)] (E) Notwithstanding subsection [(b)] (C) of this section, for a banking 22
institution with a composite CAMELS rating of 3, 4, or 5 for its most recent examination, 23
the annual assessment imposed under this section shall be increased by an additional 25%. 24
[(d)] (F) A banking institution shall pay the assessment imposed under this 25
section to the Commissioner on or before the April 15 after it is imposed. 26
(G) THE COMMISSIONER MAY DESI GNATE A SUCCESSOR IN DEX FOR: 27
(1) THE LOW– TO MODERATE –INCOME TRACT IF THE FEDERAL 28
FINANCIAL INSTITUTIONS EXAMINATION COUNCIL TRACT INCOME LEVEL D ATA IS 29
NO LONGER PUBLISHED; OR 30
(2) THE DEPOSIT GROWTH CA P IF THE FEDERAL DEPOSIT 31 8 SENATE BILL 550
INSURANCE CORPORATION REPORT OF DOMESTIC OFFICE DEPO SITS IS NO LONGER 1
PUBLISHED. 2
6–712. 3
(a) (1) IN THIS SECTION , UNLESS THE CONTEXT CLEARLY REQU IRES 4
OTHERWISE, THE FOLLOWING WORDS HAVE THE MEANINGS IN DICATED. 5
(2) “DE NOVO BRANCH ” MEANS A BRANCH OF A CREDIT UNION THAT 6
WAS ORIGINALLY ESTAB LISHED BY THE CREDIT UNION IN MARYLAND. 7
(3) “DEPOSIT GROWTH CAP ” MEANS THE YEAR –OVER–YEAR 8
PERCENTAGE CHANGE OF TOTAL SHARES AND DEP OSITS REPORTED DECEMBER 31 9
EACH YEAR BY FEDERALLY INSURED CREDIT UNIONS TO THE NATIONAL CREDIT 10
UNION ADMINISTRATION AND PU BLISHED IN THE NATIONAL CREDIT UNION 11
ADMINISTRATION CALL REPORT AGGREGATE FINANCIAL PERFORMANCE 12
REPORTS. 13
(4) “DEPOSITS” MEANS DEPOSITS ORIGI NATED AND HOUSED AT A 14
CREDIT UNION BRANCH LOCATED IN A LOW – TO MODERATE –INCOME TRACT AS 15
REPORTED BY A CREDIT UNION TO THE COMMISSIONER EACH YEA R AS OF JUNE 30. 16
(5) “LOW– TO MODERATE –INCOME TRACT ” HAS THE MEANING 17
STATED IN § 5–203 OF THIS ARTICLE. 18
(B) This section applies only to a credit union with assets of $300,000 or greater. 19
[(b)] (C) (1) The Commissioner shall impose an annual assessment on each 20
credit union as provided in this subsection to cover the expense of regulating credit unions. 21
(2) The Commissioner shall assess each credit union the sum of: 22
(i) $1,000; and 23
(ii) 8 cents for each $1,000 of the assets of the credit union over 24
$1,000,000. 25
(3) The assessment shall be based on assets stated in the credit union’s 26
most recent financial report. 27
(4) A WELL–CAPITALIZED CREDIT UNION WITH A COMPOSITE 28
CAMELS RATING OF 1 OR 2 MAY FILE WITH THE COMMISSIONER A REQUES T FOR 29
AN ASSESSMENT OFFSET CREDIT OF: 30
SENATE BILL 550 9
(I) 12 CENTS FOR EACH $1,000 OF DEPOSITS IN A DE NOVO 1
BRANCH LOCATED IN A LOW– TO MODERATE –INCOME TRACT FOR THE FIRST 5 YEARS 2
AFTER THE DATE THE DE NOVO BRANCH OPENED ; OR 3
(II) 6 CENTS FOR EACH $1,000 OF DEPOSITS IN A BRA NCH 4
LOCATED IN A LOW – TO MODERATE –INCOME TRACT NOT TO EXCEED THE DE POSIT 5
GROWTH CAP . 6
[(c)] (D) A credit union shall pay the assessment imposed under this section to 7
the Commissioner on or before the March 1 after the assessment is imposed. 8
(E) THE COMMISSIONER MAY DESI GNATE A SUCCESSOR INDEX FOR THE 9
DEPOSIT GROWTH CAP I F THE NATIONAL CREDIT UNION ADMINISTRATION CALL 10
REPORT AGGREGATE FINANCIAL PERFORMANCE REPORTS IS NO LONGER 11
PUBLISHED. 12
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 13
1, 2023. 14