AS Title 6, Chapter 1: Administration

Chapter 01. Administration. Sec. 06.01.010. Examination and investigation fees and assessments. (a) The expenses of the department reasonably incurred in the examination or investigation of all financial institutions or applications to establish financial institutions regulated by the department under this title shall be charged to and paid by each financial institution as provided in (b) and (d) of this section. (b) Except for deposit institutions, the commissioner shall assess every financial institution and every applicant to establish a financial institution a fee for the actual expenses necessarily incurred by the department in connection with any examination or investigation, whether regular or special. The commissioner shall assess every deposit institution and every applicant to establish a deposit institution a fee for the actual expenses necessarily incurred by the department in connection with any special examination or investigation. A fee assessed under this subsection must include the proportionate part of the salaries and cost of employee benefits of the examiners while conducting examinations or investigations and while preparing reports of them, and transportation costs and per diem of each examiner while away from the examiner's duty station. The cost to the financial institution in connection with an examination may not exceed the actual cost to the department of the examination. The assessment shall be made by the commissioner as soon as feasible after the examination or investigation has been completed. The assessment must be received by the department within 30 days after receipt of notice of the assessment by the institution. (c) [Repealed, § 102 ch 26 SLA 1993.] (d) The commissioner shall adopt regulations providing for semiannual assessments of deposit institutions. An assessment must be based on the amount of assets of a deposit institution and must cover, but may not exceed, the aggregate cost of periodic examinations of the deposit institution. (e) An examination fee or other charge assessed to a state financial institution under this section may not exceed a fee or other charge assessed for the same type of examination or service to a similarly situated federally chartered financial institution. (f) In this section “deposit institution” means a state financial institution that has obtained authority from the department to receive deposits of the type eligible to be insured by an agency of the federal government. Sec. 06.01.015. Examinations. (a) Financial institutions regulated under this title, except licensees subject to AS 06.40 , are subject to at least one examination every 18 months. The department may conduct additional examinations and may examine licensees subject to AS 06.40 at its discretion. (b) The department shall select one or more competent persons to make examinations of financial institutions. The examiner shall take and subscribe an oath that (1) the examiner will honestly and impartially examine into and report the condition of the institution as to assets and liabilities and other information required by the department; (2) the examiner will not disclose the information the examiner obtains through the examination to a person other than the department; (3) at the time of employment, the examiner is not obligated to, or the owner of an interest in, the institution and is not an officer or shareholder of the institution; (4) the examiner does not own more than five percent of the voting shares in another financial institution in the state; and (5) the examiner is not an officer or employee of another financial institution in the state. (c) The department shall promptly call to the attention of the directors of an institution irregularities in the conduct of the financial institution's business and any violations. The department shall send a copy of the report of examination to the institution examined. Sec. 06.01.020. Department authority to add financial institution powers and limitations. (a) Notwithstanding other provisions of this title, the department may by order authorize state financial institutions, except licensees subject to AS 06.20 , AS 06.40 , or AS 06.50 , to exercise any of the powers conferred upon, or to be subject to any of the limitations imposed upon, a federally chartered financial institution doing business in this state with deposits insured by an agency of the federal government if the department finds that the exercise of the power or imposition of the limitation both (1) serves the public convenience and advantage; and (2) equalizes and maintains the quality of competition between state financial institutions and federally chartered financial institutions. (b) The authority granted to the department by this section may not be limited by law unless that law expressly refers to this section. Sec. 06.01.025. Records of department. (a) Information in the records of the department obtained through the administration of this title is confidential, is not subject to subpoena, and may be revealed only with the consent of the department. (b) The department shall retain reports of examinations for five years. Sec. 06.01.028. Depositor and customer records confidential. (a) The records of financial institutions relating to their depositors and customers and the information in the records are confidential. A financial institution may not disclose the records and information to another person except when, and only to the extent that, the disclosure is (1) authorized in writing by the depositor or customer; (2) required by federal or state statute or regulation or by an order directed to the financial institution and issued by a court or administrative agency of competent jurisdiction; (3) made to the holder of a negotiable instrument drawn on the financial institution as to whether the drawer has sufficient funds in the financial institution to cover the instrument; (4) made to a consumer reporting agency regulated under 15 U.S.C. 1681 — 1681v (Fair Credit Reporting Act); or (5) made in connection with the maintenance or servicing of the depositor's or customer's account with the financial institution, or with another entity as part of a private label credit card or other extension of credit on behalf of the entity. (b) When disclosure of financial institution records is compelled by a subpoena, a search warrant, or another court or administrative agency order under (a)(2) of this section, the court or administrative agency shall provide in the order for the reimbursement of the financial institution for the reasonable costs incurred in complying with the order. Nothing in this subsection imposes a reimbursement obligation on a government agency, or abrogates an otherwise established reimbursement obligation of a government agency, when the financial institution is the subject of an audit, examination, or investigation and disclosure is sought under a federal or state law or regulation. (c) Unless otherwise provided in this subsection, when disclosure of financial institution records is required under a court or administrative agency order under (a)(2) of this section, the financial institution shall notify the depositor or customer of the disclosure before the disclosure is made. If notification before disclosure is not possible, the financial institution shall notify the customer or depositor of the disclosure as soon as practicable after the disclosure is made. However, notification either before or after disclosure may not be made if disclosure is made under a court or administrative agency order under (a)(2) of this section and the document requiring disclosure requires on its face that the financial institution not notify or inform the depositor or customer, or the document requiring disclosure is, or is accompanied by, a court order that expressly directs the financial institution not to notify or inform the depositor or customer. (d) Nothing in (a) — (c) of this section prohibits a financial institution from disclosing information to a person if (1) the disclosure is necessary to (A) provide the services of the financial institution to a depositor or customer; or (B) market financially related products or services of the financial institution and its marketing partners; and (2) the person receiving the information has a written agreement with the financial institution to be bound by the requirements of (a) — (c) of this section. (e) Nothing in this section authorizes the disclosure of information if disclosure is prohibited by 15 U.S.C. 6801 — 6827 or the regulations adopted under those sections. (f) A financial institution or any other person who violates this section is liable to a depositor or customer for damages caused by the disclosure of the confidential records or information of the financial institution pertaining to the depositor or customer. A financial institution or other person who takes an action under this section while relying in good faith on any provision of this section is not liable under this section to any person for the action. (g) In this section, “financial institution” means a person subject to the regulation of the department under this title, including a BIDCO licensed under AS 10.13 (Alaska BIDCO Act). Sec. 06.01.030. Orders and injunctions; notice and hearings. (a) Whenever it appears to the department that a person is engaging, has engaged, or is about to engage in an unsafe or unsound practice in conducting the business of a financial institution, or is violating, has violated, or is about to violate a provision of this title or a regulation adopted or order issued under this title, the department may (1) issue and serve on the person a notice of intent to issue an order directing the person to cease and desist from continuing the act or practice, or imposing a penalty under AS 06.01.035 (e) — (g); or (2) bring an action in the superior court to enjoin the act or practice. (b) A notice issued under (a)(1) of this section must contain a statement of the facts constituting the alleged violation or the unsafe or unsound practice, and must give reasonable notice of and an opportunity for a hearing to determine whether an order to cease and desist the act or practice should be issued. If a hearing is not requested within 30 days, or if the person served or the person's representative fails to appear at the hearing, the person is considered to have consented to the issuance of the order, and the department may issue the order to cease and desist. If the department finds at the hearing that a violation or an unsafe or unsound practice has been established, the department may issue the order to cease and desist. (c) A cease and desist order issued under (b) of this section may impose a penalty under AS 06.01.035 (e) — (g) and may require the person to cease and desist from the act or practice and to take affirmative action to correct the conditions resulting from the act or practice. (d) Notwithstanding the other provisions of this section, the department may issue a temporary cease and desist order at the same time that the department issues a notice under (a)(1) of this section. The department may not issue a temporary cease and desist order under this subsection without a prior hearing unless the order is issued for the sole purpose of preserving the status quo and preventing damage to a financial institution pending completion of any hearing. A temporary cease and desist order issued under this subsection remains in effect until a final order is issued under (b) of this section or until otherwise terminated by the department, except that the order may not remain in effect for more than 60 days. (e) Except for notices issued under (a)(1) of this section, the department shall give public notice of each proposed action, but the department is not required to hold a hearing before taking the action unless it receives written opposition to the proposed action. Written opposition must be filed with the department within the time specified by the department. In cases involving extraordinary circumstances requiring immediate action, the department may take action without notice and public hearing, but upon application to rescind the action taken, the department shall promptly hold a hearing on the application. (f) Hearings required or authorized under this title are not subject to AS 44.62.330 — 44.62.630, except as required by AS 44.62.560 and 44.62.570. The department shall adopt regulations, consistent with the provisions of this title, establishing procedures for hearings held under this section. Administrative hearings on contested cases shall be conducted by the office of administrative hearings ( AS 44.64.010 ). (g) For the purpose of hearings, investigations, or other proceedings under this title, and except as otherwise provided in this title, the department or an officer designated by the commissioner may administer oaths and affirmations, subpoena witnesses, compel the attendance of witnesses, take evidence, and require the production of books, papers, correspondence, memoranda, agreements, or other documents or records that the department considers relevant or material to the inquiry. (h) In this section, “unsafe or unsound practice” means (1) operating a bank while it is in an unsafe or unsound condition; (2) doing an act that violates a law or order of the department, or the bank's articles or bylaws; or (3) doing an act reasonably likely to result in a bank's condition becoming unsafe or unsound. Sec. 06.01.035. Penalties. (a) A person who knowingly violates, or causes another person to violate, a provision of this title, or a regulation or order of the department under this title, for which a specific remedy is not provided, is guilty of a class A misdemeanor. (b) A person who, without first receiving a license or certificate of authority from the department, participates in an activity that requires a license or certificate of authority under this title, is guilty of a class A misdemeanor. (c) A person is guilty of a class C felony if the person, with intent to deceive the department, the commissioner, or a person authorized to examine the affairs of a financial institution, knowingly (1) makes or causes a false statement or report to be made; (2) enters a false figure, statement, or entry in the books of a financial institution; or (3) makes or circulates a false report or statement about the condition of a financial institution. (d) A director, officer, or employee of a financial institution who receives a deposit, after having been notified by regulatory authorities that the institution is insolvent and without the department's prior approval, is guilty of a class C felony. (e) In addition to other penalties applicable under this section, if a person other than a financial institution knowingly or intentionally violates, or causes another person to violate, a provision of this title, or a regulation or order of the department under this title, the department may issue an order against the person imposing a civil penalty of not more than $2,500 a day for a single violation, and not more than $25,000 for multiple violations that constitute a single proceeding or a series of related proceedings. (f) In addition to other penalties applicable under this section, if a financial institution knowingly or intentionally violates a provision of this title, or a regulation or order of the department under this title, the department may issue an order against the institution imposing a civil penalty of not more than $5,000 a day for a single violation, and not more than $50,000 for multiple violations that constitute a single proceeding or a series of related proceedings. (g) For violations not covered by (e) or (f) of this section, and in addition to other penalties applicable under this section, if a person, including a financial institution, violates, or causes another person to violate, a provision of this title, or a regulation or order of the department under this title, the department may issue an order against the person imposing a civil penalty of not more than $500 a day for a single violation, and not more than $5,000 for multiple violations that constitute a single proceeding or a series of related proceedings. (h) A financial institution that fails to file a report or make payments required by the department within the time specified in this title is subject to a penalty of not more than $100 a day for each day the report or payment is late. A financial institution is considered to have transmitted a report or payment when the institution mails the report or payment, properly addressed to the department and with the appropriate postage. (i) In addition to other penalties applicable under this section, the department shall dismiss an employee of the department who violates AS 06.05.065 (a). An employee dismissed under this subsection is forever disqualified from holding a position in the department relating to the regulation of financial institutions. An employee who is dismissed under this subsection may appeal the dismissal under AS 39.25 (State Personnel Act), unless the employee is in the exempt or partially exempt service under AS 39.25.110 — 39.25.120. (j) Notwithstanding the other provisions of this section, the failure to have a business license issued under AS 43.70.020 as required by AS 06.50.020 (a) is not a violation for the purposes of (a) and (e) — (g) of this section. Sec. 06.01.040. Examination policy. It shall be the policy of the department to conduct, whenever reasonably possible, joint examinations with the Federal Deposit Insurance Corporation or with the National Credit Union Administration of those institutions subject to this title whose accounts are insured through those agencies. Sec. 06.01.045. Accounting and disposition of fees. [Repealed, § 28 ch 90 SLA 1991.] Sec. 06.01.048. Regulations. Regulations required or authorized under this title shall be adopted under AS 44.62 (Administrative Procedure Act). Sec. 06.01.050. Definitions. In this chapter, unless the context otherwise requires, (1) “commissioner” means the commissioner of commerce, community, and economic development or a designee of the commissioner; (2) “department” means the Department of Commerce, Community, and Economic Development; (3) “financial institution” means an institution subject to the regulation of the department under this title; in this paragraph, “institution” includes a commercial bank, savings bank, credit union, premium finance company, small loan company, bank holding company, financial holding company, trust company, savings and loan association, deferred deposit advance licensee under AS 06.50 , and a licensee under AS 06.60 ; (4) “state financial institution” means a financial institution that is organized under this title or that is subject to examination by the department under this title.