SB 393

Under current law, a five-member Banking Review Board and a five-member

Savings Institutions Review Board are created in the Department of Financial

Institutions (DFI) and a 5-member credit union review board is created in the Office

of Credit Unions (OCU) attached to DFI. These review boards serve functions

associated with, respectively, state banks, state savings banks and savings and loan

associations, and state credit unions (collectively, financial institutions).

Current law requires these review boards to perform certain general functions.

Each review board must: 1) review the acts and decisions of the division of banking

(division) in DFI or OCU with respect to applicable financial institutions; 2) advise

the division or OCU with respect to applicable financial institutions; and 3) perform

other review functions provided by law with respect to applicable financial

institutions. The Banking Review Board and Credit Union Review Board may also

require the division or OCU, respectively, to submit any of its actions to the review

board for approval. OCU must also confer with the Credit Union Review Board on

matters affecting credit unions.

Current law specifies additional specific functions of these review boards, such

as the following:

1. The division must establish a reasonable fee structure for savings banks and

savings and loan associations, and this fee structure is subject to approval by the

Savings Institutions Review Board.

2. The division may by rule provide state savings and loan associations or state

banks, and OCU may provide credit unions, with authority equivalent to their

federal counterparts, with the approval of, respectively, the Savings Institutions

Review Board, Banking Review Board, or Credit Union Review Board.

3. The division must issue orders prescribing reasonable rules for conducting

business as a savings and loan association and these orders are subject to approval

by the Savings Institutions Review Board. Certain rules relating to the formation

of savings and loan institutions are also subject to approval by the review board.

4. The limit on the total amount of mortgage loans that a savings and loan

association may make to a single borrower, and on the amount of mortgage loans that

may be sold and then serviced by the savings and loan association, are determined

by the division and the Savings Institutions Review Board, subject to certain

statutory limitations.

5. The Banking Review Board may make rules to safeguard the interest of

depositors and stockholders in emergencies and may make rules and prescribe

schedules for arriving at a fair valuation of bank assets. In examining banks, the

division must determine the fair valuation of assets in accordance with the rules and

schedules prescribed by the Banking Review Board.

6. Before seeking removal of an officer or director of a bank for certain reasons

related to the safety or solvency of the bank, the division must have the approval of