Bill Text: NJ S3572 | 2024-2025 | Regular Session | Introduced
Bill Title: Requires State-chartered financial institutions to increase minimum reserve balances by five times amount of previous year's losses relating to fraud and theft.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-09-12 - Introduced in the Senate, Referred to Senate Commerce Committee [S3572 Detail]
Download: New_Jersey-2024-S3572-Introduced.html
Sponsored by:
Senator JOSEPH P. CRYAN
District 20 (Union)
SYNOPSIS
Requires State-chartered financial institutions to increase minimum reserve balances by five times amount of previous year's losses relating to fraud and theft.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning minimum reserve balances for certain financial institutions and supplementing Title 17 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Every financial institution shall maintain, in addition to any amount of reserve or minimum capital already required of the institution by law or regulation, a reserve balance in an amount of at least five times the total value of the thefts, cyber thefts, fraud, and robberies reported to the institution in the previous year plus any related damages.
b. In order to verify that a financial institution has enough reserve balance to return customers' lost or stolen money while the institution investigates and recovers the lost or stolen money, every institution shall conduct an audit of the losses, including those related to theft, cyber theft, fraud, and robbery, sustained by the institution during the previous year. The institution shall annually report the findings of the audit to the Commissioner of Banking and Insurance, in a manner and by a date to be determined by the commissioner.
c. As used in this section, "financial institution" or "institution" means any bank, savings bank, savings and loan association, building and loan association, or credit union organized or doing business under the laws of this State and supervised by the Commissioner of Banking and Insurance.
2. This act shall take effect one year following the date of enactment.
STATEMENT
This bill requires State-chartered financial institutions to maintain, in addition to any amount of reserve or minimum capital already required of the institution by law or regulation, a reserve balance in an amount of at least five times the total value of the thefts, cyber thefts, fraud, and robberies reported to the institution in the previous year plus any related damages.
In addition, the bill requires financial institutions to conduct an audit of the losses sustained by the institution over the previous year and to report the findings of the audit to the Commissioner of Banking and Insurance. The purpose of the audit and report is to verify that each financial institution has enough reserve balance to return customers' lost or stolen money while the institution investigates and recovers the lost or stolen money.
