BEFORE THE DEPARTMENT OF ADMINISTRATION

                                        OF THE STATE OF MONTANA 

 

In the matter of the amendment of ARM  2.59.104 pertaining to bank semiannual  assessments

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NOTICE OF PROPOSED AMENDMENT   NO PUBLIC HEARING CONTEMPLATED

 

TO: All Concerned Persons

 

1. On September 23, 2023, the Department of Administration proposes to amend the above-stated rule.

 

2. The Department of Administration will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact the Department of Administration no later than 5:00 p.m. on July 19, 2023, to advise us of the nature of the accommodation that you need. Please contact Heather Hardman, Division of Banking and Financial Institutions, P.O. Box 200546, Helena, Montana 59620-0546; telephone (406) 841-2922; Montana Relay Service 711; facsimile (406) 841-2930; or email to [email protected].

 

3. The rule as proposed to be amended provides as follows, new matter underlined, deleted matter interlined:

 

2.59.104 SEMIANNUAL ASSESSMENT (1) The department invoices banks, investment companies, and trust companies for semiannual assessments every June and December. The assessment is based on each institution's total assets provided in its previous March and September call reports.

(2) The fee is calculated based on the total assets of the bank, investment company, or trust company multiplied by .0000375, plus the flat fee listed below.

 

 

Example: Bank A reports total assets of $58,873,000 x .0000375 plus $3,000 equals $5,207.74.

(3) The assessment is due 30 days after each invoice date, or July 31 and January 31, whichever is later.

(4) The fee shall not exceed $300,000 $400,000 for each semiannual assessment.

(5) In the event of a merger between Montana state-chartered banks, investment companies, or trust companies during the second or fourth quarter of the year, the assessment fee for the acquired institution must be paid by the surviving institution.

            (6) The assessment billed in December 2022 and collected in January 2023 is waived. 

 

AUTH: 32-1-213, 32-1-218, MCA

IMP: 32-1-213, 32-1-218, MCA

 

STATEMENT OF REASONABLE NECESSITY: The Division of Banking and Financial Institutions (division) evaluates its bank, investment company, and trust company assessments every year, with an eye to keeping assessments commensurate with expenses of the bank supervision program. The cost of regulating banks has increased as the assets of Montana banks have grown significantly and currently exceeds projected revenue from the semiannual assessments. In reviewing program expenses, the bulk of the increase in examiner time and resources can be traced to the time spent coordinating with the federal agencies and examination activities focused on regional banks headquartered in the state.

Our two regional banking organizations have grown appreciably through mergers and organic growth over the last few years. While this is beneficial for all concerned, it does require additional regulatory resources to properly supervise these larger institutions.

Considering this new dynamic, the division has chosen to increase the cap on assessments from $300,000 to $400,000 per assessment period. There are two institutions in Montana that will be affected by this–our two regional banking organizations. This will increase the assessment paid by these two institutions by $200,000 per year and bring in an additional $400,000 to the division per fiscal year. It will ensure that the expenses of the division's regional bank supervision program will not exceed the assessment revenue.

The division has carefully monitored these fees and has extended regulatory relief to state-chartered banks by reducing or waiving certain semi-annual assessments. During the past four fiscal years alone, the fees from semiannual assessments have reduced by almost $4.5 million. This includes $2.4 million in assessment fees that would have been paid by the two largest banks in the state.

 

4. Concerned persons may present their data, views, or arguments concerning the proposed action to the person listed in paragraph two above. Comments must be received no later than 5:00 p.m., August 4, 2023.

 

5. If persons who are directly affected by the proposed action wish to express their data, views, or arguments orally or in writing at a public hearing, they must make written request for a hearing and submit this request along with any written comments to the person listed in paragraph two above no later than 5:00 p.m., July 19, 2023.

 

6. If the division receives requests for a public hearing on the proposed action from either 10 percent or 25, whichever is less, of the persons directly affected by the proposed action; from the appropriate administrative rule review committee of the Legislature; from a governmental subdivision or agency; or from an association having not less than 25 members who will be directly affected, a hearing will be held at a later date. Notice of the hearing will be published in the Montana Administrative Register. Ten percent of those directly affected has been determined to be three persons based on the 36 existing state-chartered banks.

 

7. An electronic copy of this proposal notice is available through the department's website at doa.mt.gov/administrativerules. The department strives to make its online version of the notice conform to the official published version, but advises all concerned persons that if a discrepancy exists between the official version and the department's online version, only the official text will be considered. In addition, although the department works to keep its website accessible at all times, concerned persons should be aware that the website may be unavailable during some periods, due to system maintenance or technical problems.

 

8. The division maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this division. Persons who wish to have their name added to the mailing list shall make a written request that includes the name, mailing address, and e-mail address of the person to receive notices and specifies that the person wishes to receive notices regarding division rulemaking actions. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written requests may be mailed or delivered to the person listed in paragraph two above; or may be made by completing a request form at any rules hearing held by the department.

 

9. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

10. The department has determined that under 2-4-111, MCA, the proposed amendment of the above-stated rule will not significantly and directly impact small businesses.

 

 

         /s/ Misty Ann Giles                                             /s/ Don Harris                             

 Misty Ann Giles, Director                                   Don Harris, Rule Reviewer

 Department of Administration                            Department of Administration

 

Certified to the Secretary of State June 27, 2023.