WES MOORE, Governor Ch. 433
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Chapter 433
(Senate Bill 550)
AN ACT concerning
Financial Regulation – Maryland Community Investment Venture Fund –
Establishment
(Access to Banking Act)
FOR the purpose of authorizing the establishment of a establishing the Maryland
Community Investment Venture Fund by the Commissioner of Financial Regulation
as an instrumentality of the State for certain purposes; providing for certain
assessment offset credits for certain banking institutions and credit unions that
establish de novo branches or maintain branches in certain areas; authorizing the
use of the Banking Institution and Credit Union Regulation Fund for certain
purposes; and generally relating to financial regulation the Maryland Community
Investment Venture Fund and the assessment of banking institutions and credit
unions.
BY repealing and reenacting, with amendments,
Article – Financial Institutions
Section 2–118, 5–203, and 6–712
Annotated Code of Maryland
(2020 Replacement Volume and 2022 Supplement)
BY adding to
Article – Financial Institutions
Section 2–118.1
Annotated Code of Maryland
(2020 Replacement Volume and 2022 Supplement)
BY repealing and reenacting, without amendments,
Article – Financial Institutions
Section 5–101(a) and (b)
Annotated Code of Maryland
(2020 Replacement Volume and 2022 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Financial Institutions
2–118.
(a) In this section, “Fund” means the Banking Institution and Credit Union
Regulation Fund established under this section. Ch. 433 2023 LAWS OF MARYLAND
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(b) There is a Banking Institution and Credit Union Regulation Fund that
consists of:
(1) All revenue received for the chartering and regulation of persons who
engage in the business of a banking institution or credit union under this article; and
(2) Any other fee, assessment, or revenue received by the Commissioner
from banking institutions and credit unions under this article.
(c) Notwithstanding subsection (b) of this section, the Commissioner shall pay all
fines and penalties collected by the Commissioner from banking institutions and credit
unions under this article into the General Fund of the State.
(d) The purpose of the Fund is to pay all the costs and expenses incurred by the
Commissioner that are related to the regulation of banking institutions and credit unions
under this article, including:
(1) Expenditures authorized under this article; [and]
(2) INVESTMENTS AUTHORIZE D UNDER § 2–118.1 OF THIS SUBTITLE ;
AND
[(2)] (3) Any other expense authorized in the State budget.
(e) (1) All the costs and expenses of the Commissioner relating to the
regulation of banking institutions and credit unions under this article shall be included in
the State budget.
(2) Any expenditures from the Fund to cover costs and expenses of the
Commissioner may be made only:
(i) By an appropriation from the Fund approved by the General
Assembly in the annual State budget; or
(ii) By the budget amendment procedure provided for in § 7–209 of
the State Finance and Procurement Article.
(3) If, in any given fiscal year, the amount of the revenue collected by the
Commissioner and deposited into the Fund exceeds the actual appropriation for the
Commissioner to regulate banking institutions and credit unions under this article, the
excess amount shall be carried forward within the Fund.
(f) (1) The State Treasurer is the custodian of the Fund.
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(2) The State Treasurer shall deposit payments received from the
Commissioner into the Fund.
(g) (1) The Fund is a continuing, nonlapsing fund that is not subject to §
7–302 of the State Finance and Procurement Article, and may not be deemed a part of the
General Fund of the State.
(2) Unless otherwise provided by law, no part of the Fund may revert or be
credited to:
(i) The General Fund of the State; or
(ii) A special fund of the State.
2–118.1.
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS
INDICATED.
(2) “FUND” MEANS THE MARYLAND COMMUNITY INVESTMENT
VENTURE FUND.
(2) (3) “LOW– TO MODERATE –INCOME TRACT ” HAS THE MEANING
STATED IN § 5–203 OF THIS ARTICLE.
(3) “PRIVATE VENTURE FUND ” MEANS THE SEPARATE E NTITY OR
ENTITIES CHARTERED I N ACCORDANCE WITH SU BSECTIONS (B) AND (K) (J) OF THIS
SECTION.
(B) (1) THE COMMISSIONER MAY INVE ST IN THERE IS A MARYLAND
COMMUNITY INVESTMENT VENTURE FUND.
(2) THE MARYLAND COMMUNITY INVESTMENT VENTURE FUND IS A
PRIVATE VENTURE FUND THAT IS A SEPARATELY CHAR TERED EQUITY FUND US ING
BOTH:
(I) IS AN INSTRUMENTALITY OF THE STATE; AND
(II) USES PUBLIC AND PRIVATE I NVESTMENT FUNDS .
(3) (C) (1) THE SUBJECT TO PARAGRAPH (2) OF THIS
SUBSECTION, THE PURPOSE OF THE PRIVATE VENTURE FUND FUND IS TO DEVELOP
OPPORTUNITIES FOR BA NKING INSTITUTIONS A ND CREDIT UNIONS TO BETTER
SERVE THE NEEDS OF L OW– TO MODERATE –INCOME TRACTS BY :
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(I) INVESTING IN THE DEVE LOPMENT OF F INANCIAL PRODUCT
OR FINANCIAL PRODUCT UNDERWRITING INNOVAT IONS THAT WILL ENHANCE
ACCESS TO CAPITAL , FUNDING, AND OTHER FINANCIAL SERVICES FOR BUSINES SES
IN LOW– TO MODERATE –INCOME TRACTS IN MARYLAND THE STATE;
(II) DEPLOYING, TESTING, AND EVALUATING THESE THE
INNOVATIONS FOR PROV IDING CAPITAL AND FU NDING TO BUSINESSES IN LOW– TO
MODERATE–INCOME TRACTS IN MARYLAND THE STATE; AND
(III) PROMOTING AND MAKING THESE THE INNOVATIONS
AVAILABLE TO A VARIETY OF BANKING INSTITUTIONS AND CREDIT UNIONS FO R USE
IN ENHANCING ACCESS TO CAPITAL, FUNDING, AND OTHER FINANCIAL SERVICES
FOR BUSINESSES IN LO W– TO MODERATE –INCOME TRACTS IN MARYLAND THE
STATE.
(2) WITH THE APPROVAL OF THE COMMISSIONER , THE PURPOSE OF
THE FUND MAY BE ALTERED I N A MANNER THAT IS CONSISTENT WITH THE INTENT
AND REQUIREMENTS OF THIS SECTION.
(D) (1) (I) THE COMMISSIONER SHALL ES TABLISH A GOVERNANCE
STRUCTURE FOR THE FUND.
(II) THE COMMISSIONER MAY COLL ABORATE WITH INVESTO RS
IN THE FUND WHEN ESTABLISHIN G THE GOVERNANCE STR UCTURE.
(2) THE COMMISSIONER , OR THE COMMISSIONER ’S DESIGNEE, SHALL
SERVE ON THE GOVERNI NG BODY OF THE FUND.
(C) (E) (1) THE COMMISSIONER MAY EXPEND USE UP TO $250,000
FROM THE BANKING INSTITUTION AND CREDIT UNION REGULATION FUND
ESTABLISHED UNDER § 2–118 OF THIS SUBTITLE TO COVER THE EXPENSES
ASSOCIATED WITH CHARTERING AND ORGANIZING THE PRIVA TE VENTURE FUND
ESTABLISHING THE FUND, INCLUDING ACCOUNTING , ADVISORY, THIRD–PARTY
SERVICE PROVIDER , MARKETING, AND OTHER NECESSARY EXPENSES.
(D) (2) TO ENCOURAGE PRIVATE INVESTMENT, THE COMMISSIONER MAY
PROVIDE THE AN INITIAL EQUITY CAPIT AL INVESTMENT IN THE PRIVATE VENTURE
FUND FUND IN AN AMOUNT UP TO $2,500,000 FROM THE BANKING INSTITUTION
AND CREDIT UNION REGULATION FUND.
(E) (F) (1) THROUGH JUNE 30, 2028, THE COMMISSIONER MAY MATC H
ANY AN INVESTMENT MADE IN T HE PRIVATE VENTURE FUND FUND BY A BANKING
INSTITUTION OR CREDI T UNION UP TO THE AM OUNT OF THE ASSESSME NT CREDIT WES MOORE, Governor Ch. 433
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EARNED BY THAT THE BANKING INSTITUTION OR CREDIT UNION UNDER IN
ACCORDANCE WITH § 5–203(C) § 5–203(D) OR § 6–712(C)(4) OF THIS ARTICLE.
(F) (2) THE COMMISSIONER MAY NOT MAKE ANY FURTHER
INVESTMENTS AN INVESTMENT IN THE PRIVATE VENTURE FUND FUND AFTER JUNE
30, 2028.
(G) ANY AND ALL ALL INVESTMENT RETURNS O R RETURN OF CAPITAL
FROM THE PRIVATE VENTURE FUND FUND WITH RESPECT TO ANY AN INVESTMENT
AUTHORIZED BY THE COMMISSIONER SHALL BE THE PROPERTY OF CREDITED TO
THE BANKING INSTITUTION AND CREDIT UNION REGULATION FUND.
(H) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE
COMMISSIONER MAY NEGO TIATE APPROPRIATE GO VERNANCE STRUCTURES FOR
THE PRIVATE VENTURE FUND WITH OTHER INVE STORS.
(2) THE COMMISSIONER OR A REP RESENTATIVE OF THE
COMMISSIONER SHALL AL WAYS SERVE ON THE BO DY GOVERNING T HE PRIVATE
VENTURE FUND .
(3) (I) THE PURPOSE OF THE PR IVATE VENTURE FUND M AY NOT BE
ALTERED OR AMENDED W ITHOUT THE CONSENT O F THE COMMISSIONER .
(II) ANY ALTERED OR AMENDE D PURPOSE MUST REMAI N
CONSISTENT WITH THIS SECTION.
(I) (H) AT THE DIRECTION OF T HE COMMISSIONER , AND IN ADDITION TO
ANY CUSTOMARY AND AP PROPRIATE AUDITS OF THE FUND FUND, THE PRIVATE
VENTURE FUND GOVERNING BODY OF TH E FUND SHALL BE REQUIRED TO ENGAG E
OBTAIN THE SERVICES OF AN INDEPENDENT THIRD PARTY DESIGNATED BY THE
COMMISSIONER ON AN AN NUAL BASIS TO EVALUA TE WHETHER ALL THE
INVESTMENTS MEET THE CRITERIA ES TABLISHED BY MADE TO THE FUND COMPLY
WITH THIS SECTION.
(J) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION ,
DIVISION II OF THE STATE FINANCE AND PROCUREMENT ARTICLE DOES NOT
APPLY TO A SERVICE T HAT THE COMMISSIONER OBTAINS UNDER THIS SECTION .
(2) THE COMMISSIONER IS SUBJE CT TO TITLE 12, SUBTITLE 4 OF
THE STATE FINANCE AND PROCUREMENT ARTICLE FOR SERVICES CONTRACTED
UNDER SUBSE CTION (C) OR (K) OF THIS SECTION.
(K) (J) (I) (1) TO THE EXTENT IF THE COMMISSIONER DETERMIN ES THAT
SEPARATE PRIVATE VEN TURE FUNDS ARE NECES SARY TO ACCOMPLISH T HE Ch. 433 2023 LAWS OF MARYLAND
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PURPOSE OF THE PRIVATE VENTURE FUND FUND, THE COMMISSIONER MAY EXPEND
FUNDS USE MONEY FROM THE FUND TO CHARTER AND ORGANIZE ESTABLISH
ADDITIONAL PRIVATE V ENTURE FUNDS.
(2) ANY AN ADDITIONAL PRIVATE V ENTURE FUNDS CHARTERED AND
ORGANIZED UNDER FUND ESTABLISHED IN ACCORDANCE WITH THIS SUBSECTION
ARE SUBJECT TO THE REQUIREMENTS AND LIMITATIONS OF THIS SECTION ON THE
MARYLAND COMMUNITY INVESTMENT VENTURE FUND UNDER SUBSECTION (B) OF
THIS SECTION , INCLUDING THE AGGREGATE EXPENSE AN D INVESTMENT
LIMITATIONS STATED I N SUBSECTIONS (C) THROUGH (F) OF THIS SECTION SHALL
COMPLY WITH THE REQU IREMENTS OF SUB SECTIONS (B) THROUGH (F) OF THIS
SECTION.
5–101.
(a) In this title the following words have the meanings indicated.
(b) “CAMELS” means the composite rating adopted by the federal Financial
Institutions Examination Council to evaluate the adequacy of capital, quality of assets,
capability of management, quality and level of earnings, adequacy of liquidity, and
sensitivity to market risk.
5–203.
(a) (1) IN THIS SECTION , UNLESS THE CONTEXT C LEARLY REQUIRES
OTHERWISE, THE FOLLOWING WORDS HAVE THE MEANINGS IN DICATED.
(2) “BRANCH” MEANS A DEPOSIT –TAKING OFFICE OF A B ANKING
INSTITUTION IN MARYLAND OTHER THAN THE MAIN OFFICE AS DEFINED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION .
(3) “DE NOVO BRANCH ” HAS THE MEANING STAT ED IN § 5–1001 OF
THIS TITLE WITH RESPECT TO A BA NKING INSTITUTION .
(4) “DEPOSIT GROWTH CAP ” MEANS THE YEAR –OVER–YEAR
PERCENTAGE CHANGE OF DOMES TIC OFFICE DEPOSITS AS REPORTED ON
DECEMBER 31 EACH YEAR BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
IN THE FEDERAL DEPOSIT INSURANCE CORPORATION QUARTERLY BANK PROFILE .
(5) “DEPOSITS” MEANS DEPOSITS ORIGI NATED AND HOUSED AT A
BRANCH LOCATED IN A LOW – TO MODERATE –INCOME TRACT AS REPO RTED BY A
BANKING INSTITUTION TO THE FEDERAL DEPOSIT INSURANCE CORPORATION
EACH YEAR AS OF JUNE 30.
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(6) “LOW– TO MODERATE –INCOME TRACT ” MEANS A CENSUS TRACT
DELINEATED BY THE U.S. BUREAU OF THE CENSUS IN THE MOST RECENT
DECENNIAL CENSUS AS PUBLISHED BY THE FEDERAL FINANCIAL INSTITUTIONS
EXAMINATION COUNCIL THAT CORRESPO NDS TO LOW – TO MODERATE –INCOME
LEVEL CLASSIFICATION S AS DEFINED BY THE REGULATION OF THE FEDERAL
RESERVE BOARD IMPLEMENTING TH E FEDERAL COMMUNITY REINVESTMENT ACT,
12 C.F.R. 228.12.
(B) The Commissioner shall impose annual assessments on each banking
institution as provided in this section, to cover the expense of regulating banking
institutions.
[(b)] (C) (1) Except as provided in paragraph (2) of this subsection, the
Commissioner shall assess each banking institution the sum of:
(i) $8,000; plus
(ii) 1. 12 cents for each $1,000 of the assets of the institution over
$50,000,000, but not more than $250,000,000;
2. 10 cents for each $1,000 of assets over $250,000,000, but
not more than $500,000,000;
3. 9 cents for each $1,000 of assets over $500,000,000, but not
more than $1,000,000,000;
4. 8 cents for each $1,000 of assets over $1,000,000,000, but
not more than $10,000,000,000; and
5. 7 cents for each $1,000 of assets over $10,000,000,000.
(2) If a banking institution is not in the business of accepting deposits or
retaining funds in a deposit account as defined in § 5–509 of this title, the Commissioner
shall assess the banking institution the sum of:
(i) $5,000; plus
(ii) 1. 0.3 cents for each $1,000 of managed assets held in a
fiduciary capacity up to $5,000,000,000;
2. 0.2 cents for each $1,000 of managed assets held in a
fiduciary capacity over $5,000,000,000, but not more than $20,000,000,000;
3. 0.1 cent for each $1,000 of managed assets held in a
fiduciary capacity over $20,000,000,000 up to $27,500,000,000;
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4. 0.2 cents for each $1,000 of nonmanaged and custodial
assets held in a fiduciary capacity up to $5,000,000,000; and
5. 0.1 cent for each $1,000 of nonmanaged and custodial
assets held in a fiduciary capacity over $5,000,000,000 up to $20,000,000,000.
(3) The assessments shall be based on assets stated in a bankin g
institution’s most recent financial report.
(D) A WELL–CAPITALIZED BANKING INSTITUTION WITH A C OMPOSITE
CAMELS RATING OF 1 OR 2 MAY FILE WITH THE COMMISSIONER A REQUES T FOR
AN ASSESSMENT OFFSET CREDIT OF:
(1) 12 CENTS FOR EACH $1,000 OF DEPOSITS IN A DE NOVO BRANCH
LOCATED IN A LOW – TO MODERATE –INCOME TRACT FOR THE FIRST 5 YEARS AFTER
THE DATE THE BRANCH OPENED; OR
(2) 6 CENTS FOR EACH $1,000 OF DEPOSITS IN A BRA NCH LOCATED IN
A LOW– TO MODERATE –INCOME TRACT NOT TO EXCEED THE DEPOSIT G ROWTH CAP.
[(c)] (E) Notwithstanding subsection [(b)] (C) of this section, for a banking
institution with a composite CAMELS rating of 3, 4, or 5 for its most recent examination,
the annual assessment imposed under this section shall be increased by an additional 25%.
[(d)] (F) A banking institution shall pay the assessment imposed under this
section to the Commissioner on or before the April 15 after it is imposed.
(G) THE COMMISSIONER MAY DESI GNATE A SUCCESSOR IN DEX FOR:
(1) THE LOW– TO MODERATE –INCOME TRACT IF THE FEDERAL
FINANCIAL INSTITUTIONS EXAMINATION COUNCIL TRACT INCOME LEVEL DATA IS
NO LONGER PUBLISHED ; OR
(2) THE DEPOSIT GROWTH CA P IF THE FEDERAL DEPOSIT
INSURANCE CORPORATION REPORT OF DOMESTIC OFFICE DEPO SITS IS NO LONGER
PUBLISHED.
6–712.
(a) (1) IN THIS SECTION , UNLESS THE CONTEXT C LEARLY REQUIRES
OTHERWISE, THE FOLLOWING WORDS HAVE THE MEANINGS IN DICATED.
(2) “DE NOVO BRANCH ” MEANS A BRANCH OF A CREDIT UNION THAT
WAS ORIGINALLY ESTAB LISHED BY THE CREDIT UNION IN MARYLAND THE STATE. WES MOORE, Governor Ch. 433
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(3) “DEPOSIT GROWTH CAP ” MEANS THE YEAR –OVER–YEAR
PERCENTAGE CHANGE OF TOTAL SHARES AND DEP OSITS REPORTED DECEMBER 31
EACH YEAR BY FEDERAL LY INSURED CREDIT UN IONS TO THE NATIONAL CREDIT
UNION ADMINISTRATION AND PU BLISHED IN THE NATIONAL CREDIT UNION
ADMINISTRATION CALL REPORT AGGREGATE FINANCIAL PERFORMANCE
REPORTS.
(4) “DEPOSITS” MEANS DEPOSITS ORIGI NATED AND HOUSED AT A
CREDIT UNION BRANCH LOCATED IN A LOW – TO MODERATE –INCOME TRACT AS
REPORTED BY A CREDIT UNION TO THE COMMISSIONER EACH YEA R AS OF JUNE 30.
(5) “LOW– TO MODERATE –INCOME TRACT ” HAS THE MEANING
STATED IN § 5–203 OF THIS ARTICLE.
(B) This section applies only to a credit union with assets of $300,000 or greater.
[(b)] (C) (1) The Commissioner shall impose an annual assessment on each
credit union as provided in this subsection to cover the expense of regulating credit unions.
(2) The Commissioner shall assess each credit union the sum of:
(i) $1,000; and
(ii) 8 cents for each $1,000 of the assets of the credit union over
$1,000,000.
(3) The assessment shall be based on assets stated in the credit union’s
most recent financial report.
(4) A WELL–CAPITALIZED CREDIT U NION WITH A COMPOSIT E
CAMELS RATING OF 1 OR 2 MAY FILE WITH THE COMMISSIONER A REQUES T FOR
AN ASSESSMENT OFFSET CREDIT OF :
(I) 12 CENTS FOR EACH $1,000 OF DEPOSITS IN A DE NOVO
BRANCH LOCATED IN A LOW– TO MODERATE –INCOME TRACT FOR THE FIRST 5 YEARS
AFTER THE DATE THE D E NOVO BRANCH OPENED ; OR
(II) 6 CENTS FOR EACH $1,000 OF DEPOSITS IN A BRA NCH
LOCATED IN A LOW– TO MODERATE –INCOME TRACT NOT TO EXCEED THE DEPOSIT
GROWTH CAP .
[(c)] (D) A credit union shall pay the assessment imposed under this section to
the Commissioner on or before the March 1 after the assessment is imposed.
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(E) THE COMMISSIONER MAY DESIGNATE A SUCC ESSOR INDEX FOR THE
DEPOSIT GROWTH CAP I F THE NATIONAL CREDIT UNION ADMINISTRATION CALL
REPORT AGGREGATE FINANCIAL PERFORMANCE REPORTS IS NO LONGER
PUBLISHED.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2023.
Approved by the Governor, May 8, 2023.