Bill Text: NJ A2054 | 2014-2015 | Regular Session | Introduced
Bill Title: The "New Jersey Responsible Banking Act."
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-01-16 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [A2054 Detail]
Download: New_Jersey-2014-A2054-Introduced.html
STATE OF NEW JERSEY
216th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2014 SESSION
Sponsored by:
Assemblyman ANGEL FUENTES
District 5 (Camden and Gloucester)
SYNOPSIS
The "New Jersey Responsible Banking Act."
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act concerning banking services and supplementing Title 17 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "New Jersey Responsible Banking Act."
2. As used in this act:
"Bank" means a State or federally chartered bank, savings bank, savings and loan association, or credit union doing business in the State.
"Banking services" means deposit taking, check cashing, sale of money orders, and origination of residential or commercial mortgages, consumer loans, and commercial loans.
"Commissioner" means the Commissioner of Banking and Insurance.
"Department" means the Department of Banking and Insurance.
"Program" means the Responsible Banking Program established pursuant to this act.
3. There is established in the Department of Banking and Insurance, the Responsible Banking Program. The commissioner shall administer and monitor the program, which shall establish criteria to evaluate whether banks are meaningfully addressing the credit and financial needs of the State and the communities in the State in which those banks do business. The program shall be designed to allow the State and localities to consider whether banks are meeting their obligation to address the credit and financial needs of the State when determining where to deposit public funds or obtain banking services.
4. a. The department shall promulgate rules and regulations which set forth the criteria to evaluate and classify banks pursuant to the Responsible Banking Program. The criteria shall include, but not be limited to, each bank's efforts to:
(1) Address the key credit and financial services needs of small businesses;
(2) Work with borrowers to restructure delinquent home mortgage loans for which they are responsible;
(3) Develop and offer financial services and products that are most needed by low and moderate income individuals and communities and provide physical branches in those communities and in banking development districts designated pursuant to the "Banking Development District Act," P.L.2011, c.24 (C.17:16Z-1 et seq.) ;
(4) Provide funding, including construction and permanent loans and investments, for affordable housing and economic development projects in low and moderate income communities;
(5) Work with governmental entities and communities to address serious problems concerning the maintenance and condition of buildings financed by the bank;
(6) Partner in community development efforts in the State;
(7) Develop a strategic plan that details how the bank will meet the credit needs of low and moderate income consumers and communities and make progress in meeting those goals; and
(8) Satisfy such other criteria that the commissioner shall identify as appropriate, including any analysis by the Community Financial Services Advisory Board applicable to banks pursuant to P.L.1991, c.294 (C.17:16Q-1 et seq.).
b. The commissioner shall establish a classification system to classify banks according to the criteria established pursuant to this section. The commissioner shall provide each bank and the public with notice and an opportunity to be heard and submit comments concerning a bank's classification prior to making the classification public.
c. The commissioner shall publish the classifications made pursuant to subsection b. of this section on the department's website, including a report containing the following:
(1) a detailed description of how the classification of each bank was determined;
(2) the role played in the determination by each individual criterion established pursuant to this section; and
(3) the role played by public comments submitted to the department pursuant to this subsection.
d. The commissioner shall periodically review the classifications and may reclassify banks, as appropriate, based on the criteria established pursuant to this section and by regulation.
e. The failure of a bank to provide the information necessary to evaluate and classify banks pursuant to this section to the department shall be grounds for the commissioner to amend the classification of the bank and shall be detailed in the report required pursuant to subsection c. of this section.
5. The State Treasurer or any county or municipality may consider the classification of a bank pursuant to this act when determining where to deposit or invest public funds, or to otherwise obtain services, subject to applicable laws and regulations concerning those deposits, investments, and services.
6. The Department of Banking and Insurance shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to effectuate the purposes of this act.
7. This act shall take effect on the 60th day next following enactment.
STATEMENT
This bill, entitled the "New Jersey Responsible Banking Act," establishes the Responsible Banking Program. The program, to be administered by the Department of Banking and Insurance, will establish criteria by which to evaluate whether banks are meaningfully addressing the credit and financial needs of the State and the communities in the State in which those banks do business. The program will allow the State and localities to consider whether banks are meeting their obligation to address the credit and financial needs of the State when determining where to deposit public funds or obtain banking services.
Under the bill, the department is required to set forth the criteria to evaluate banks. Among the criteria which must be considered are each bank's efforts to:
(1) Address the key credit and financial services needs of small businesses;
(2) Work with borrowers to restructure delinquent home mortgage loans for which they are responsible;
(3) Develop and offer financial services and products that are most needed by low and moderate income individuals and communities and provide physical branches in those communities and in banking development districts designated pursuant to the "Banking Development District Act," P.L.2011, c. 24 (C. 17:16Z-1 et seq.) ;
(4) Provide funding, including construction and permanent loans and investments, for affordable housing and economic development projects in low and moderate income communities;
(5) Partner in community development efforts in the State; and
(6) Satisfy other criteria that the commissioner shall identify as appropriate, including any analysis by the Community Financial Services Advisory Board applicable to banks pursuant to P.L.1991, c.294 (C.17:16Q-1 et seq.).
The bill requires the Commissioner of Banking and Insurance to establish a classification system to rank banks according to the criteria established pursuant to the bill. After providing notice and an opportunity to be heard, the commissioner is required to publish the classifications on the department's website.
The commissioner is also required to periodically review the classifications and may reclassify banks, as appropriate, based on the criteria established pursuant to the bill's provisions.
Under the bill, the failure of any bank to provide information necessary for the department to evaluate the bank is grounds for the commissioner to amend the classification of the bank and is required to be detailed in the report required pursuant to the bill's provisions.
In order to encourage the State Treasurer, counties and municipalities to consider a bank's classification, the bill provides that the State Treasurer or any county or municipality may consider the classification of a bank when determining where to deposit or invest public funds, or to otherwise obtain services, subject to applicable laws and regulations concerning such deposits, investments, and services.
