2012 -- S 2596 SUBSTITUTE A

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO FINANCIAL INSTITUTIONS -- PROCEDURES AND OPERATIONS

     Introduced By: Senators Picard, and Miller

     Date Introduced: March 01, 2012

     Referred To: Senate Corporations

It is enacted by the General Assembly as follows:

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

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Operations" is hereby amended to read as follows:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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promulgate rules and regulations not inconsistent with this section.

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

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

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

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government.

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

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

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

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

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

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

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

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commence an investigation of the applicant.

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

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

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provisions of this chapter if he or she shall find:

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

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

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

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

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

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

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

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within the purposes of this title; and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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reasonableness of the action to deny the license.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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designees shall notify the licensee of such revocation in writing.

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

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Procedures Act, chapter 35, of title 42.

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     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO FINANCIAL INSTITUTIONS -- PROCEDURES AND OPERATIONS

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

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notifying licensees of incomplete applications and denying incomplete applications without a

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

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

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     This act would take effect on passage.

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