Banking Fund Update
If you haven’t already heard, Governor Tom Wolf raided $42 million from the Pennsylvania Department of Banking & Securities’ Banking Fund. Governor Wolf transferred a total of $42 million out of the fund via two $21 million transfers over an 18 month period. The first $21 million headed to the Commonwealth of Pennsylvania’s General Fund in 2018 under the authority granted in Act 44 of 2017; and the second $21 million transfer was used to augment the operations of the Department of Environmental Protection (DEP) and the Department of Conservation and Natural Resources (DCNR.) pursuant to section 1726-K(g) of the Fiscal Code (72 P.S. § 1726-K) enacted by Act 20 of 2019.
The “Banking Fund” is a restricted revenue fund consisting primarily of assessments paid by state chartered depository institutions, as well as fees, charges and penalties recovered from persons, firms, corporations or associations under the supervision of the PA Department of Banking & Securities (DOBS.) All of these funds are to be used solely to fund the operations of DOBS, for the regulation of the financial services industry and the supervision and examination of state chartered financial institutions. As part of that fund, DOBS maintains an Institution Resolution Restricted Account (IRRA) to resolve the seizure or liquidation of a non-federally insured institution.
We believe that regulatory assessments paid by financial institutions should be used to support the operations of the Department of Banking and Securities and should not be used to support general government operations or to augment appropriations unrelated to the purposes for which the assessments were imposed.
Further, we believe such transfers diminish the value of the state charter and threaten the dual banking system in Pennsylvania.
As part of a coalition, PACB, the Pennsylvania Bankers and Cross State Credit Union Association (formerly the Pennsylvania Credit Union Association), are working on legislation to address the issue. Together, we have met with over 60 lawmakers to educate them on the issue and our intent to seek a remedy. We have received a great deal of support.
The contents of the legislation are currently evolving but, Representative Mark Keller has agreed to be a prime sponsor for our legislation in the House of Representatives and has already secured co-sponsors. We are close to securing a prime sponsor in the Senate. We could see movement on the legislation as early as March.
PACB continues to seek the best options for our members and demand that this issue be addressed. We will keep you updated on its progress and how you can help.
Save the Date for PACB’s Legislative Lobby Day!
On Monday, April 6th, join PACB and your fellow community bankers at the Pennsylvania State Capitol to lobby your state legislators on behalf of the community banking industry.
Meet your Legislators.
Advocate for your Industry.
Hear from legislative leaders on the issues of the day.
For more information contact Allison Coccia at email@example.com or 518-265-7429
PACB Legislative Lobby Day
Monday, April 6
11:00am to 3:00pm
225 State Street, Harrisburg, PA 17101