TITLE 19
Financial institutions

CHAPTER 19-12
Receivership

SECTION 19-12-6


§ 19-12-6 Legislative findings.

It is hereby found as follows:

(1) Certain financial institutions or credit unions whose deposits were previously insured by the Rhode Island share and deposit indemnity corporation, are presently unable to obtain adequate deposit insurance as required by § 19-4-10 (formerly § 19-11-9).

(2) As a result thereof, a proclamation of the governor dated January 1, 1991 declared a banking emergency under chapter 13 (formerly chapter 18) of this title with respect to certain of those financial institutions or credit unions pursuant to which operations of those financial institutions or credit unions have been suspended pending their obtaining adequate deposit insurance, and a number of them have obtained federal deposit insurance and have been permitted to resume operations.

(3) There remain more than twelve (12) financial institutions or credit unions subject to orders suspending their operations, which orders preclude approximately one hundred ninety thousand (190,000) members and/or depositors of these financial institutions or credit unions from having access to approximately three hundred thousand (300,000) separate accounts that in the aggregate total more than one billion dollars ($1,000,000,000).

(4) The inability of depositors in the remaining financial institutions or credit unions to withdraw their deposits has created hardships not only for those depositors and their families, but also for a broad sector of citizens and businesses in the state of Rhode Island that depend on payments from depositors for goods and services supplied to them.

(5) It is hereby determined to be necessary in order to preserve and restore liquidity to the economy of the state, to protect deposits of state funds in these financial institutions or credit unions, and to protect the health, safety and general welfare of the people of the state of Rhode Island, for the general assembly to exercise its constitutional and other powers to enact measures to achieve these essential public purposes by providing for the relief of persons affected by the suspension of withdrawals from the financial institutions or credit unions affected by the banking emergency by expediting access by depositors to funds and assets in these financial institutions or credit unions.

(6) The numbers of people, accounts and funds adversely affected indicate that, without prompt state legislative action, there will be a serious negative impact on the health, safety and general welfare of the people and the economy of the state, already weakened by current economic conditions.

This chapter shall, therefore, be deemed to be an exercise of the police powers of this state to achieve the essential public purpose of providing for the protection of the health, safety and general welfare of the people of the state by amending the general laws of Rhode Island to grant priorities in distributions to depositors upon the liquidation of financial institutions or credit unions and to expedite receivership and other proceedings intended to make available to depositors and other affected parties funds and the value of assets in the affected financial institutions and credit unions.

History of Section.
(P.L. 1995, ch. 82, § 50.)