2012 -- H 7483 SUBSTITUTE A

=======

LC01405/SUB A

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO FINANCIAL INSTITUTIONS -- PROCEDURES AND OPERATIONS

     Introduced By: Representatives Medina, Tanzi, Hull, Keable, and O`Grady

     Date Introduced: February 09, 2012

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 19-3-13 of the General Laws in Chapter 19-3 entitled "Powers and

1-2

Operations" is hereby amended to read as follows:

1-3

     19-3-13. Use of electronic devices and machines. -- (a) Any financial institution, or

1-4

credit union, may make available for use by its customers one or more electronic devices or

1-5

machines (customer-bank communications terminals/automated teller machines). These devices

1-6

or machines shall not be deemed to be the establishment of a branch of the particular financial

1-7

institution or credit union. All surcharges chargeable for use of these devices shall be disclosed

1-8

prior to completion of any transaction. Disclosure of the surcharge shall be displayed

1-9

electronically by the electronic device or machine and shall not be disclosed by means of any

1-10

stickers or placards placed on the exterior of the electronic device or machine.

1-11

        (b) The establishment and use of these devices are subject to approval by the director or

1-12

the director's designee which approval shall not be unreasonably withheld. Any request to

1-13

establish a customer-bank communications terminal/automated teller machine must be sent to the

1-14

director or the director's designee by certified mail, return receipt requested any means acceptable

1-15

to the director or the director’s designee. Any request which is received by the director or the

1-16

director's designee shall be deemed approved, if within five (5) business days of receipt by the

1-17

director or the director's designee of the request, the director or the director's designee has not

1-18

issued a notice of intent to deny the request. The director or the director's designee may

1-19

promulgate rules and regulations not inconsistent with this section.

2-20

      (c) To the extent consistent with the antitrust laws, each financial institution or credit

2-21

union, chartered by this or any other state, is permitted but not required to share these devices

2-22

with one or more other financial institutions or credit unions, chartered by the state or federal

2-23

government.

2-24

      (d) Each financial institution or credit union shall adopt and maintain safeguards on each

2-25

electronic device or machine consistent with the minimum requirements specified under the

2-26

federal Bank Protection Act, 12 U.S.C. section 1881 et seq.

2-27

     SECTION 2. Sections 19-14-7, 19-14-8 and 19-14-14 of the General Laws in Chapter 19-

2-28

14 entitled "Licensed Activities" are hereby amended to read as follows:

2-29

     19-14-7. Issuance or denial of license. -- (a) Upon the filing of a completed application,

2-30

the payment of fees and the approval of the bond, the director or the director's designee shall

2-31

commence an investigation of the applicant.

2-32

     (b) After the investigation determines that a completed application has been filed, the The

2-33

director or the director's designee shall approve the license applied for in accordance with the

2-34

provisions of this chapter if he or she shall find:

2-35

     (1) That the financial responsibility, experience, character, and general fitness of the

2-36

applicant, and of the applicant's members and of the applicant's officers, including the designated

2-37

manager of record of a licensed location, if the applicant is a partnership, limited liability

2-38

company or association, or of the officers including the designated manager of record of a

2-39

licensed location, and directors and the principal owner or owners of the issued and outstanding

2-40

capital stock, if the applicant is a corporation, are such as to command the confidence of the

2-41

community and to warrant belief that the business will be operated honestly, fairly, and efficiently

2-42

within the purposes of this title; and

2-43

      (2) That allowing the applicant to engage in business will promote the convenience and

2-44

advantage of the community in which the business of the applicant is to be conducted.

2-45

      (b) (c) A license provided pursuant to this title shall remain in full force and effect until

2-46

it is surrendered by the licensee or revoked or suspended as provided by law.

2-47

      (c) (d) If the director or the director's designee rejects an application for a license, he or

2-48

she shall notify the applicant, by certified mail, of the denial, the reason(s) supporting the denial

2-49

and shall afford the applicant the opportunity for a hearing within a reasonable time period to

2-50

show cause why the license should not be denied. , in writing, and advise the applicant of the

2-51

reason for the denial of the application for license. When an application for a license is denied by

2-52

the director or the director's designee or withdrawn by the applicant, the director or the director's

2-53

designee shall return to the applicant the bond, but shall retain the investigation fee to cover the

2-54

costs of investigating the application. The director or the director's designee shall approve or deny

3-1

every application for license under this section within sixty (60) days from the date the

3-2

application is deemed by the director or the director's designee to be completed. Upon written

3-3

request of the applicant, the director or the director's designee shall advise the applicant whether

3-4

the applicant's application for any such license is complete and if not, the reason why such

3-5

application is not complete. The applicant may make written demand for hearing upon the

3-6

director or director’s designee within thirty (30) days of the notice to determine the

3-7

reasonableness of the action to deny the license.

3-8

      (d) (e) Any applicant or licensee aggrieved by the action of the director or the director's

3-9

designee in denying a completed application for a license shall have the right to appeal the action,

3-10

order, or decision pursuant to chapter 35 of title 42.

3-11

     19-14-8. Denial of license by default Denial of license due to incomplete application.

3-12

-- If, within sixty (60) days of the initial filing of the application, the applicant has failed to

3-13

provide the necessary factual data information requested by the department in order to complete

3-14

the application, the director or the director's designee shall notify the applicant, by certified mail

3-15

in writing, that the application shall be considered in default and rejected denied if all necessary

3-16

data for a completed application information requested is not received within fourteen (14) thirty

3-17

(30) days of the notice unless the application is withdrawn. The notice shall specify what

3-18

information is necessary for completion. The applicant may make a written demand within thirty

3-19

(30) days for a hearing to determine the reasonableness of the director’s or the director’s

3-20

designee’s action. The hearing shall be conducted pursuant to the Administrative Procedures Act,

3-21

chapter 35 of title 42. If the applicant fails to provide the information or request a hearing within

3-22

thirty (30) days from the notice, the application shall be denied on the basis that it is incomplete.

3-23

     19-14-14. Revocation by default. -- (a) The director or the director's designee may

3-24

revoke any license without a hearing by default if the licensee fails to respond to notifications

3-25

informing the licensee of a failure to pay the annual license fee, maintain in effect the required

3-26

bond or bonds or maintain net worth requirements as required by this title.

3-27

        (b) For the purposes of revocation by default, the director or the director's designee

3-28

shall send, in writing, to the licensee and to the licensee's registered attorney for service of

3-29

process at the their current respective address addresses stated in the application for the license

3-30

according to the records of the department, by certified mail, notice of the deficiency and

3-31

potential revocation of the license. Should the licensee or the licensee's registered attorney fail to

3-32

respond to the certified mail or is not answering to service within fifteen (15) days of the

3-33

notification, the director or the director's designee may revoke the license by default and without

3-34

hearing after fifteen (15) days from the date of the certified mail. The director or the director’s

4-1

designees shall notify the licensee of such revocation in writing.

4-2

     (c) Any action taken under this section may be appealed pursuant to the Administrative

4-3

Procedures Act, chapter 35, of title 42.

4-4

     SECTION 3. This act shall take effect upon passage.

=======

LC01405/SUB A

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO FINANCIAL INSTITUTIONS -- PROCEDURES AND OPERATIONS

***

5-1

     This act would update and simplify procedures for reviewing applications for licenses,

5-2

notifying licensees of incomplete applications and denying incomplete applications without a

5-3

formal order of denial (which could be reported by the licensee) while preserving the right of

5-4

applicants to a legal proceeding to challenge any action of the department.

5-5

     This act would take effect on passage.

=======

LC01405/SUB A

=======