Financial Institutions

Regulatory Oversight

SECTION 19-4-2

§ 19-4-2. Periodic examinations – Access to records.

(a) The director, or the director's designee, shall, whenever he or she considers it advisable, but at least once in each year, examine each regulated institution. However, the director may extend the examination period for eligible financial institutions to at least once every eighteen (18) months. For the purposes of this section, an eligible financial institution means a financial institution with total assets of less than two hundred fifty million dollars ($250,000,000) that has not experienced a change in control in the last twelve-month (12) period and that is:

(1) Well capitalized;

(2) Well managed;

(3) Highly rated by state and federal banking regulatory agencies; and

(4) Not subject to a formal enforcement proceeding or order.

In addition, the director may also consider other factors that may be considered by federal banking regulatory agencies when those agencies determine whether financial institutions qualify for an extended examination cycle. At each examination the director, or the director's designee, shall have free access to all books, records, papers, assets and any other information deemed necessary by the director, or the director's designee, to ascertain the regulated institution's condition; its ability to fulfill its obligations; and whether it has complied with the provisions of law.

(b) The total cost of an examination made pursuant to this section shall be paid by the examined party and shall include the following expenses:

(1) One hundred fifty percent (150%) of the salary and benefits of the examining personnel engaged in the examination shall be paid to the director to and for the use of the state. The assessment shall be in addition to any taxes and fees otherwise payable to the state. The total examination fees under this section payable in any one year shall not exceed one hundred thousand dollars ($100,000) for any one regulated institution;

(2) All reasonable technology costs related to the examination process. Technology costs shall include the actual cost of software and hardware utilized in the examination process and the cost of training examination personnel in the proper use of the software or hardware; and

(3) All necessary and reasonable education and training costs incurred by the state to maintain the proficiency and competence of the examination personnel. All such costs shall be incurred in accordance with appropriate state of Rhode Island regulations, guidelines, and procedures.

(c) Expenses incurred pursuant to subsections (b)(2) and (b)(3) shall be allocated equally to each regulated institution no more frequently than annually and shall not exceed an annual average assessment of seven hundred fifty dollars ($750) per regulated institution for any given three (3) calendar-year period. All revenues collected pursuant to this section shall be deposited as general revenues. That assessment shall be in addition to any taxes and fees otherwise payable to the state.

(d) The director, or the director's designee, is authorized to accept in his or her discretion the report of any examination conducted by any federal banking regulatory or federal deposit insuring agencies or other state banking regulatory agency in lieu of an examination by the director, or the director's designee.

History of Section.
(P.L. 1995, ch. 82, § 42; P.L. 1997, ch. 98, § 4; P.L. 1999, ch. 156, § 2; P.L. 2003, ch. 62, § 1; P.L. 2003, ch. 78, § 1.)