General Provisions

Ark. Code Ann. tit. 23, ch. 32

in effect

Ark. Code Ann. § 23-32-201 Investment in obligations issued pursuant to Farm Credit Act of 1971.

It shall be lawful for all savings and loan associations and insurance companies doing business in the State of Arkansas and for all trustees, guardians of the estates of minors and insane persons, executors, or administrators to invest their funds in notes, bonds, debentures, or other similar obligations issued by the Federal Land Banks, Federal Intermediate Credit Banks, or banks for cooperatives or any other obligations issued pursuant to the provisions of the Farm Credit Act of 1971 and acts amendatory thereto.

Ark. Code Ann. § 23-32-203 Loans secured by liens on agricultural lands.

(a) Any person obtaining a loan secured by a lien on real estate in this state which is used primarily for agricultural or livestock purposes shall have the privilege of prepaying the loan in multiples of one hundred dollars ($100) during any one (1) year following the first anniversary date of the loan, on interest-paying dates, provided the prepayment plus required payments does not exceed twenty percent (20%) of the initial principal amount of the loan. (b) The privilege shall not be cumulative, and the borrower shall have no further prepayment privilege except that the borrower may, at any time, prepay the principal balance of the loan with accrued interest thereon plus prepayment fees in amounts not exceeding the following: (1) Five percent (5%) of the unpaid principal balance if prepaid during the first year; (2) Four percent (4%) of the unpaid principal balance if prepaid during the second year; (3) Three percent (3%) of the unpaid principal balance if prepaid during the third year; (4) Two percent (2%) of the unpaid principal balance if prepaid during the fourth year; (5) One percent (1%) of the unpaid principal balance if prepaid during the fifth year; and (6) No penalty if prepaid more than five (5) years after the date of the note creating the debt. (c)(1) This section shall apply only to loans secured by a lien on real estate used primarily for agricultural or livestock purposes. (2) This section shall not apply to any mortgage, deed of trust, note, or other instrument evidencing indebtedness if the instrument contains a statement in boldface type that this section does not apply and if the lender or agent of the lender points out and explains the provisions to the borrower and the borrower signs a statement on the instrument that the section has been explained and that the borrower agrees. (d) Any lender or other person applying or attempting to apply more restrictive prepayment requirements, or otherwise violating this section, shall be guilty of a Class A misdemeanor and shall be punished accordingly. (e) In addition to the criminal penalties provided in subsection (d) of this section, any lender or other person applying or attempting to apply more restrictive prepayment requirements or otherwise violating this section shall forfeit all unmatured interest and principal on the loan and shall be liable for reasonable attorney's fees incurred by the debtor as a result of the lender's violation of this section. (f) Any payment of interest or principal made by the debtor shall not constitute a waiver of any of the debtor's rights provided by this section or any other law.

Ark. Code Ann. § 23-32-204 Sale of certain mortgage loans.

Notwithstanding any other provision of law, any savings and loan association or insurance company organized under the laws of this state which has as one (1) of its principal purposes the making or purchasing of loans secured by real estate mortgages is authorized to: (1) Sell such mortgage loans to the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, or any other corporation chartered by an act of Congress for such purposes, or any successor thereof; (2) In connection therewith, make payments of any capital contributions required pursuant to law in the nature of subscriptions for stock of the entities described in subdivision (1) of this section; (3) Receive stock evidencing such capital contributions; and (4) Hold or dispose of such stock.

Ark. Code Ann. § 23-32-205 Loans under Servicemen's Readjustment Act.

(a) In applying to loans made under the Servicemen's Readjustment Act of 1944, any restrictions of any character imposed by the laws of the State of Arkansas upon loans which state-chartered lending institutions may make, purchase, or otherwise acquire, no consideration whatsoever shall be given: (1) Any loan or loan obligation which is wholly guaranteed or insured by the Secretary of Veterans Affairs, under Title III of the Servicemen’s Readjustment Act of 1944 or for the insurance or guaranty of which the administrator has issued his or her binding commitment; or (2) If any loan or loan obligation be guaranteed or insured only in part under the Servicemen’s Readjustment Act of 1944: (A) That portion of the loan or loan obligation so guaranteed or insured by the administrator; and (B) That portion of the loan or loan obligation that may be guaranteed or insured by the United States or by any department, bureau, or agency thereof, including any corporation which, or the capital stock of which, is owned by the United States Government. (b) As used in this section, “restrictions of any character” includes: (1) Restrictions on the aggregate amount of loans which any lending institution may lawfully make to any one (1) borrower; and (2) Restrictions on the duration of the loan or the time or manner of repayment. (c) As used in this section, “state-chartered lending institutions” includes building and loan associations, savings and loan associations, insurance companies, and other institutions and organizations authorized to make loans in this state.

Ark. Code Ann. § 23-32-206 Casualty insurance — Replacement cost coverage.

(a) A savings and loan association, financial institution, national bank, mortgage company, or any public or private mortgagee doing business in this state, when making a mortgage loan, may not require as a condition or term of the mortgage that the mortgagor purchase casualty insurance on property which is the subject of the mortgage in an amount in excess of the fair market value of the buildings or appurtenances on the mortgaged premises. (b) This section shall not be construed as limiting the right of the mortgagor to purchase replacement cost coverage on the property which is the subject of the mortgage.

Ark. Code Ann. § 23-32-207 Deposits and withdrawals — Accounts and certificates of deposit in two or more names.

Checking accounts and savings accounts may be opened and certificates of deposit may be issued by any federally or state-chartered savings and loan association, in the names of two (2) or more persons, either minor or adult, or a combination of minor and adult. Checking accounts, savings accounts, and certificates of deposit shall be held and payable as follows: (1)(A) Unless a written designation to the contrary is made to the federally or state-chartered savings and loan association, when a deposit has been made or a certificate of deposit purchased in the names of two (2) or more persons and in form to be paid to any of the persons so named, or the survivors of them, the deposit or certificate of deposit and any additions thereto made by any of the persons named in the account shall become the property of those persons as joint tenants with the right of survivorship. (B) The deposit or certificate of deposit, together with all interest thereon, shall be held for the exclusive use of the persons so named and may be paid to any of those persons or to the survivors after the death of any of those persons. The payment shall be a valid and sufficient release and discharge of the federally or state-chartered savings and loan association for all payments made on account of the deposit or certificate of deposit; (2)(A) If the person opening the account or purchasing the certificate of deposit designates in writing to the federally or state-chartered savings and loan association that the account or the certificate of deposit is to be held in joint tenancy or in joint tenancy with right of survivorship, or that the account or certificate of deposit shall be payable to the survivor or survivors of the persons named in the account or certificate of deposit, then the account or certificate of deposit and all additions thereto shall be the property of those persons as joint tenants with right of survivorship. (B) The account or certificate of deposit may be paid to or on the order of any one (1) of those persons during their lifetime unless a contrary written designation is given to the federally or state-chartered savings and loan association, or to or on the order of any one (1) of the survivors of them after the death of any one (1) or more of them. (C) The opening of the account or the purchase of the certificate of deposit in this form shall be conclusive evidence in any action or proceeding to which either the federally or state-chartered savings and loan association or the surviving party is a party of the intention of all of the parties to the account or certificate of deposit to vest title to the account or certificate of deposit, and the additions thereto, in the survivor. (D) The payment shall be a valid and sufficient release of the federally or state-chartered savings and loan association for all payments made on account of the deposit or certificate of deposit; (3) If an account is opened or a certificate of deposit is purchased in the names of persons who denominate themselves to the federally or state-chartered savings and loan association as husband and wife, whether or not they are at that time husband and wife, then the account or certificate of deposit and all additions thereto shall be the property of those persons as tenants by the entirety. Upon the death of one (1) of those persons, the account shall be payable to the survivor; (4)(A) If persons open or hold an account or a certificate of deposit in a form indicating that the account or certificate of deposit is a tenants in common account or certificate of deposit, then the account or certificate of deposit and all additions thereto shall be the property of those persons as tenants in common. The federally or state-chartered savings and loan association, upon receipt of a specific written notice addressed to it of the death of either party, shall pay upon the written order of the survivor, to the survivor, his or her pro rata part of the account or certificate and to the estate of the deceased owner, the deceased's pro rata part of the account or certificate. (B) However, the federally or state-chartered savings and loan association may pay the entire account or certificate of deposit and all additions thereto upon the receipt or acquittance of either party to the account or certificate, prior to receipt of a specific written notice of death, unless there has been filed with the federally or state-chartered savings and loan association a written designation that more than one (1) signature is required to deal with the account. (C) In the absence of any written designation to the contrary filed with the federally or state-chartered savings and loan association, all tenants in common accounts shall be deemed to be owned pro rata by the persons named in the account; (5) If an account is opened or a certificate of deposit is purchased in the name of two (2) or more persons, whether as joint tenants, tenants by the entirety, tenants in common, or otherwise, a federally or state-chartered savings and loan association shall pay withdrawal requests, accept pledges of the account or certificate of deposit, and otherwise deal in any manner with the account or certificate of deposit. This may be done upon the direction of any one (1) of the persons named therein, whether the other persons named in the account or certificate of deposit are living or not, unless one (1) of the persons named therein shall, by written instructions delivered to the federally or state-chartered savings and loan association, designate that the signature of more than one (1) person shall be required to deal with the account or certificate of deposit; (6)(A) If a person opens or holds an account or certificate of deposit in a form indicating that, on the death of the person named as holder, the account or certificate of deposit shall be paid to or held by another person, then the account or certificate of deposit and any balance thereof which exists from time to time shall be held as a payment on death account or certificate of deposit unless otherwise agreed between the person opening the account or purchasing the certificate of deposit and the federally or state-chartered savings and loan association. (B) The payment shall be a valid and sufficient release and discharge of the federally or state-chartered savings and loan association for all payments made on account of the account or certificate of deposit; (7) Upon the death of the holder of the account or certificate of deposit, the persons designated by him or her and who have survived him or her shall be the owners of the account or certificate as joint tenants with right of survivorship if more than one (1). Any payment made by the federally or state-chartered savings and loan association to any of those persons shall be a complete discharge of the federally or state-chartered savings and loan association as to the amount paid; (8) No federally or state-chartered savings and loan association paying any survivor in accordance with the provisions of this section shall thereby be liable for any estate, inheritance, or succession taxes which may be due this state; (9) During his or her lifetime, the person to whom such an account or certificate of deposit is issued may change the designation of any of the persons who are to be holders at his or her death, by a written direction accepted by the federally or state-chartered savings and loan association; and (10) The terms “designate in writing”, “written designation”, “designate”, “designates”, “designation”, or “designated” shall not be construed to require that the depositor or purchaser affix his or her signature to an instrument.

Ark. Code Ann. § 23-32-208 Sharing of customer-bank communication terminals.

(a)(1) An agreement to share a customer-bank communication terminal, as defined by § 23-32-1301(2) [repealed], shall not prohibit, limit, or restrict the right of a financial institution from charging a customer-bank communication terminal usage fee. (2) The usage fee shall not exceed two dollars ($2.00) or two percent (2%) of the gross amount of the transaction, whichever is less, and may only be imposed if imposition of the fee is disclosed at a time and in a manner that allows a user to terminate or cancel the transaction without incurring the usage fee. (b)(1) For purposes of this section, “usage fee” is a fee charged by a customer-bank communication terminal owner on transactions by a holder of a foreign bank card. (2) For purposes of this section, a “foreign bank card” is a card eligible for use in a customer-bank communication terminal, which card is not issued by the customer-bank communication terminal owner.

Ark. Code Ann. § 23-32-209 Misleading actions or use of words by unauthorized persons.

(a)(1) All persons except those described in subdivision (a)(2) of this section are prohibited from using in this state as a portion of or in connection with their place of business their name or title or in reference to themselves in their stationery or advertising the following words or phrases, alone or in combination with any other word or phrase: “bank”, “banker”, “bankers”, “banking”, “federal reserve”, “trust company”, “trust”, “savings and loan”, “credit union”, “building and loan”, or any other word or phrase that tends to induce the belief that the party using it is authorized to engage in the business of a bank, trust company, savings and loan association, or credit union. (2) The prohibitions contained in subdivision (a)(1) of this section shall not apply to those persons that discharge the burden of proving their authority to use the words or phrases described in subdivision (a)(1) of this section under the laws of this or another state or of the United States. (b) All persons except those described in subdivision (a)(2) of this section are prohibited from doing or soliciting business in this state substantially in the manner or so as to induce the belief that the business in whole or in part is that of a bank, savings bank, trust company, credit union, or savings and loan association, either by the sale of contract or of shares of its capital stock upon partial or installment payments thereof, by the receipt of money, savings, dues, or other deposits or by the issuance of certificates of deposit or certificates of investment of money, savings, or dues. (c) Nothing in this section shall be construed as preventing the use of the word “bankers” in combination with other words in connection with the place of business, name, and title of any finance or investment company operated in connection with, as a subsidiary to, or having joint offices with a bank or trust company in this state if the bank or trust company is subject to the supervision of the Bank Commissioner and if the bank or trust company has the word “bankers” alone or in combination with other words in its name or title. (d) Each violation of subsection (a) of this section shall constitute a Class A misdemeanor. (e) It is declared to be public policy that this law be liberally construed in favor of its enforcement. (f) Nothing in this section shall be construed to authorize any person to engage in any activity not otherwise authorized under Arkansas law. (g) “Person”, when used in this section, means an individual, corporation, partnership, joint venture, trust, estate, limited liability company, or other unincorporated association or any other legal or commercial entity.

Ark. Code Ann. § 23-32-210 Request for stop payment on electronic funds transfer.

(a) Any financial institution doing business in this state shall stop payment of any electronic funds transfer from a customer's account upon receipt, at least three (3) business days prior to the scheduled transfer, of a written stop-payment order from the customer or any person authorized to draw upon the account describing the transfer with reasonable certainty. (b) If the written stop-payment order purports to stop all future electronic funds transfers to a particular payee, then the financial institution may require the customer to provide written confirmation that the payee has been informed of the revocation of authority within fourteen (14) days of the delivery of the stop-payment order. In the event the customer fails to provide the confirmation, if required by the financial institution, then the stop-payment order shall cease to be effective at the end of the fourteen-day confirmation period. (c)(1) For the purposes of this section, “electronic funds transfer” means any transaction in which funds are transferred from a customer's account to a third-party payee primarily for personal, family, or household purposes. (2) “Electronic funds transfers” may include automated clearing house debits, wire transfers through the Federal Reserve System or any private network, or other paperless, electronic methods of funds transfer, regardless of whether the transaction is initiated by the customer or the payee.

Ark. Code Ann. § 23-32-301 Title.

This subchapter may be known as the “Surety Bond Exemption Act”.

Ark. Code Ann. § 23-32-302 Purpose.

The purpose of this subchapter is to exempt state and federal savings and loan associations from being required to furnish security in the form of cash, bond, or otherwise, ensuring proper performance of their duties and obligations in the business transactions set forth in § 23-32-304 . This purpose is based on the premise that savings and loan associations are so thoroughly governed by state and federal law, rule, and regulation that there is an insignificant risk of such an institution’s being unable to adequately compensate an injured or damaged party.

Ark. Code Ann. § 23-32-303 Applicability of other laws.

The law defining savings and loan associations' formation, structure, and operation shall apply to this subchapter except as provided in this subchapter.

Ark. Code Ann. § 23-32-304 Construction.

Nothing in this subchapter shall be construed to: (1) Prevent a state or federal savings and loan association from electing or agreeing to furnish bond at its own cost; (2) Prevent any other party of interest, desiring protection in a business transaction with a state or federal savings and loan association, from electing to secure and pay for a bond covering the state or federal savings and loan association to the benefit of such a party to the transaction; and (3) Amend or repeal any law pertaining to: (A) Corporate surety or indemnity bonds covering directors, officers, or employees of a state or federal savings and loan association; (B) Foreign corporations, associations, or institutions not authorized to do business in this state; (C) Actions available against state or federal savings and loan associations for injury or damage; and (D) Bonding requirements involving fiduciary activities of a guardian, executor, administrator, personal representative, trustee, agent, or other fiduciary under the Probate Code or under any other laws covering fiduciary activities.

Ark. Code Ann. § 23-32-305 Exemption from posting bond in certain transactions.

(a) Except when the dollar amount of responsibility assumed exceeds its net capital and surplus, no state or federal savings and loan association, chartered or licensed to do business in this state, shall be required to furnish fidelity, surety, or performance bond, called “bond” in this subchapter, in business transactions involving: (1) Garnishment; (2) Replevin; (3) Foreclosure; and (4) Forcible entry and detainer. (b) At the beginning of any proceeding in all such business transactions, the state or federal savings and loan association shall, upon request, furnish to each party to the transaction a copy of its most recent statement of financial condition.

Ark. Code Ann. § 23-32-401 Definition.

As used in this subchapter, unless the context otherwise requires, “investor companies” means all banks, mutual savings associations, mutual savings banks, mutual savings fund societies, trust funds, foundations, pension trusts, or lending agencies, all the capital stock of which is owned by one (1) or more mutual savings banks or mutual savings fund societies.

Ark. Code Ann. § 23-32-402 Application.

No provision in this subchapter shall apply to any corporation except those corporations included in § 23-32-401 .

Ark. Code Ann. § 23-32-403 Transactions not considered engaging in business.

Without excluding other activities which may not constitute transaction of, or engaging in, business in this state, investor companies which are engaged in investing in loans secured by real estate and which are not chartered or domesticated in this state and do not engage in a general banking business in this state shall not be considered to be transacting or engaging in business in this state under the law of this state by reason of carrying on in this state any one (1) or more of the following activities: (1) The acquisition of, or participation in, loans secured by mortgages or deeds of trust on real property situated in Arkansas pursuant to commitment arrangements or agreements made prior to or following the origination or creation of the loans; (2) The ownership, modification, renewal, extension, transfer, or foreclosure of such loans, or the acceptance of substitute or additional obligors thereon; (3) The maintaining or defending of actions or suits relative to such loans, mortgages, or deeds of trust; (4) The maintenance of bank accounts in Arkansas in connection with the collection or servicing of such loans; (5) The making, collection, and servicing of such loans through an Arkansas agent or agency engaged in the business of servicing real estate loans for investors; (6) The taking of deeds to the mortgaged property either in lieu of foreclosure or for the purpose of transferring title either to the Federal Housing Administration, the Department of Veterans Affairs, or other governmental agency; (7) The acquisition of title to property under foreclosure sale or from the owner in lieu of foreclosure; (8) The management, rental, maintenance, and sale or the operating, maintaining, renting, or otherwise dealing with, selling, or disposing of real property acquired under foreclosure sale or by agreement in lieu thereof; or (9) The physical inspection and appraisal of property in Arkansas as security for deeds of trust or mortgage negotiations for the purchase of such loans.

Ark. Code Ann. § 23-32-404 Consent to service of process on Secretary of State.

(a) All investor companies, except national banking institutions and state-chartered banks subject to federal regulation, acting either in their own behalf or acting as trustee for trust funds, foundations, pension funds, or related investors, must, before purchasing mortgage notes, mortgages, or deeds of trust, file a statement with the Secretary of State constituting him or her as their agent for service. (b) The statement shall contain the address of the investor company and shall be signed by the president, secretary, general manager, trustee, or other person charged with the administration of the funds of the investor company. (c) It shall be the duty of the Secretary of State, upon service of process, to forward all such process forthwith by registered mail to the address shown on the statement of the appropriate investor company.

Ark. Code Ann. § 23-32-405 Authority to sue and be sued.

The investor companies may sue or be sued in this state in relation to the mortgage notes, mortgages, or deeds of trust, and service may be had on the Secretary of State when an investor company is a defendant. The venue of the actions shall be in the county of the residence of any party to the suit, unless otherwise provided by law, except that when land is involved, the venue shall be in the county where the land or any part of it is located.

Ark. Code Ann. § 23-32-406 Transaction of general business not authorized.

Nothing in this subchapter shall be construed as authorizing investor companies to transact the general business of a chartered bank or trust company, or any business in this state, except as herein provided.

Ark. Code Ann. § 23-32-501 Definitions.

In this subchapter: (1) “Account” means a contract of deposit between a depositor and a financial institution, and includes a checking account, savings account, certificate of deposit, and share account; (2) “Agent” means a person authorized to make account transactions for a party; (3) “Beneficiary” means a person named as one to whom sums on deposit in an account are payable on request after the death of all parties or for whom a party is named as trustee; (4) “Devisee” means any person designated in a will to receive a testamentary disposition of real or personal property; (5) “Financial institution” means an organization authorized to do business under state or federal laws relating to financial institutions, and includes a savings bank, building and loan association, savings and loan company or association, and credit union; (6) “Party” means a person who, by the terms of an account, has a present right, subject to request, to payment from the account other than as a beneficiary or agent; (7) “Payment” of sums on deposit includes withdrawal, payment to a party or third person pursuant to check or other request, and a pledge of sums on deposit by a party, or a setoff, reduction, or other disposition of all or part of an account pursuant to a pledge; (8) “Person” means an individual, a corporation, an organization, or other legal entity; and (9) “Personal representative” includes an executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same function under the law governing their status.

Ark. Code Ann. § 23-32-502 Scope of subchapter.

(a) This subchapter applies to accounts in this state. (b) This subchapter does not apply to: (1) An account established for a partnership, joint venture, or other organization for a business purpose; (2) An account controlled by one (1) or more persons as an agent or trustee for a corporation, unincorporated association, or charitable or civic organization; or (3) A fiduciary or trust account in which the relationship is established other than by the terms of the account.

Ark. Code Ann. § 23-32-503 Forms.

A contract of deposit that substantially contains the following form establishes an agency account, and the account is governed by the provisions of this subchapter applicable to agency accounts: AGENCY (POWER OF ATTORNEY) DESIGNATION Agents may make account transactions for parties but have no ownership or rights at death unless named as POD beneficiaries. [To Add Agency Designation To Account, Name One Or More Agents]. [Select One and Initial]: AGENCY DESIGNATION SURVIVES DISABILITY OR INCAPACITY OF PARTIES AGENCY DESIGNATION TERMINATES ON DISABILITY OR INCAPACITY OF PARTIES Click to view form.

Ark. Code Ann. § 23-32-504 Designation of agent.

(a) Unless the terms of an agency designation provide that the authority of the agent terminates on disability or incapacity of a party, the agent's authority survives disability and incapacity. The agent may act for a disabled or incapacitated party until the authority of the agent is terminated. (b) Death of the sole party or last surviving party terminates the authority of an agent. (c) An agent in an account with an agency designation has no beneficial right to sums on deposit.

Ark. Code Ann. § 23-32-505 Payment to designated agent.

On request of an agent under an agency designation for an account, a financial institution may, unless it actually knows that the authority of agency has terminated, pay to the agent sums on deposit in the account.

Ark. Code Ann. § 23-32-506 Payment to minor.

If a financial institution is required or permitted to make payment pursuant to this subchapter to a minor designated as a beneficiary, payment may be made pursuant to the Uniform Transfers to Minors Act, § 9-26-201 et seq.

Ark. Code Ann. § 23-32-507 Discharge.

(a)(1) Payment made pursuant to this subchapter in accordance with an agency of account discharges the financial institution from all claims for amounts so paid, whether or not the payment is consistent with the beneficial ownership of the account as between parties, beneficiaries, or their successors. (2) Payment may be made whether or not a party, beneficiary, or agent is disabled, incapacitated, or deceased when payment is requested, received, or made. (b)(1) Protection under this section does not extend to payments made after a financial institution has received written notice from a party, or from the personal representative, surviving spouse, or heir or devisee of a deceased party, to the effect that payments in accordance with the terms of the agency account should not be permitted, and the financial institution has had a reasonable opportunity to act on it when payment is made. (2) Unless the notice is withdrawn by the person giving it, the successor of any deceased party must concur in a request for payment if the financial institution is to be protected under this section. (3) Unless a financial institution has been served with process in an action or proceeding, no other notice or other information shown to have been available to the financial institution affects its right to protection under this section. (c) A financial institution that receives written notice pursuant to this section or otherwise that has reason to believe that a dispute exists as to the rights of the parties may refuse, without liability, to make payments in accordance with the terms of the agency account. (d) Protection of a financial institution under this section does not affect the rights of parties in disputes between themselves or their successors concerning the beneficial ownership of sums on deposit in agency accounts or payments made from agency accounts.

Ark. Code Ann. § 23-32-508 Setoff.

Without qualifying any other statutory right to setoff or lien and subject to any contractual provision, if a party is indebted to a financial institution, the financial institution has a right to setoff against the agency account. The amount of the agency account subject to setoff is the proportion to which the party is, or immediately before death was, beneficially entitled or, in the absence of proof of that proportion, an equal share with all parties.

Ark. Code Ann. § 23-32-509 Effect on other laws.

This subchapter is supplemental to all laws pertaining to the deposit of funds in financial institutions.

Ark. Code Ann. § 23-32-601 Title.

This subchapter shall be known and may be cited as the "Arkansas Second Amendment Financial Privacy Act".

Ark. Code Ann. § 23-32-602 Definitions.

As used in this subchapter: (1)(A) "Acquirer bank" means a member of a payment card network that contracts with a merchant for the settlement of an electronic payment transaction. (B) "Acquirer bank" includes a bank that contracts directly with a merchant or indirectly through a processor to process an electronic payment transaction; (2) "Ammunition" means the same as defined in 18 U.S.C. § 921, as it existed on January 1, 2025; (3) "Antique firearm" means the same as defined in 18 U.S.C. § 921, as it existed on January 1, 2025; (4) "Authorization" means the process by which a merchant requests approval for an electronic payment transaction from the issuer of a credit card or debit card; (5) "Covered entity" means an entity that establishes a relationship with a retailer for the purposes of processing credit, debit, or prepaid transactions; (6) "Credit card" means a card, plate, coupon book, or other credit device existing for the purposes of obtaining money, property, labor, or services on credit; (7) "Customer" means a person engaged in a payment card transaction that a financial institution facilitates or processes; (8) "Debit card" means a card issued by a financial institution to a consumer for use in initiating an electronic fund transfer from the account of the consumer at the financial institution for the purpose of transferring money between accounts or obtaining money, property, labor, or services; (9) "Depository institution" means: (A) A depository institution as defined in 12 U.S.C. § 1813(c)(1), as it existed on January 1, 2025; or (B) An insured credit union as defined in 12 U.S.C. § 1752(7), as it existed on January 1, 2025; (10) "Electronic payment transaction" means a transaction in which a person uses a debit card, a credit card, or other payment code or device issued or approved through a payment card network to debit a deposit account or use a line of credit, whether or not authorization is based on a signature, personal identification number, or other means; (11)(A) "Financial institution" means an entity involved in facilitating or processing a payment card transaction. (B) "Financial institution" includes: (i) An acquirer bank; (ii) A payment card network; (iii) A payment card issuer; (iv) A depository institution; (v) A trust company; (vi) A savings bank; (vii) A person subject to the jurisdiction of the: (a) United States Securities and Exchange Commission; (b) Bank Commissioner under the Arkansas Banking Code of 1997, chapters 45-50 of this title; (c) Securities Commissioner under the Arkansas Securities Act, § 23-42-101 et seq.; or (d) Insurance Commissioner under the Arkansas Insurance Code; or (viii) Any other institution that: (a) Holds and receives deposits, savings, or share accounts; (b) Issues certificates of deposit; (c) Provides to its customers any deposit accounts subject to withdrawal by check, instrument, order, or electronic means to effect third-party payments; (d) Provides insurance services; or (e) Provides investment services; (12)(A) "Firearm" means the same as defined in 18 U.S.C. § 921, as it existed on January 1, 2025. (B) "Firearm" includes: (i) An antique firearm; (ii) A rifle; (iii) A shotgun; and (iv) A handgun; (13) "Firearms retailer" means a person that is: (A) Physically located in Arkansas; and (B) Engaged in the lawful business of selling or trading firearms, firearm accessories or firearm components, or ammunition; (14)(A) "Issuer" means a person issuing a credit card or a debit card. (B) "Issuer" includes an issuer's agent; (15)(A) "Merchant" means a person that accepts credit cards or debit cards from a customer for the purchase of goods or services. (B) "Merchant" includes a firearms retailer that accepts a credit card or a debit card for lawful purchase of a firearm, firearm accessories or firearm components, or ammunition; (16) "Merchant category code" means a code assigned to a retailer based on the types of goods and services offered to a retailer's customers; (17)(A) "Payment card network" means an entity that directly or through a member, processor, or agent provides proprietary services, infrastructure, software, or hardware that routes information used to authorize, clear, and settle credit, debit, or prepaid transactions. (B) "Payment card network" does not include a financial institution that settles a credit, debit, or prepaid transaction directly with a retailer on behalf of a customer; (18) "Person" means an individual, a corporation, an organization, or other legal entity; (19) "Rifle" means the same as defined in 18 U.S.C. § 921, as it existed on January 1, 2025; (20) "Savings bank" means a savings association or federal savings association as defined in 12 U.S.C. § 1462, as it existed on January 1, 2025; (21) "Shotgun" means the same as defined in 18 U.S.C. § 921, as it existed on January 1, 2025; and (22) "Trust company" means: (A) A national bank engaged in activities in a fiduciary capacity under 12 U.S.C. § 92a and 12 C.F.R. Part 9; (B) A trust company as defined in § 23-51-102; or (C) An interstate bank that is authorized under the Arkansas Banking Code of 1997, chapters 45-50 of this title, to exercise the powers of a trust company in this state.

Ark. Code Ann. § 23-32-603 Prohibited conduct.

(a)(1) A payment card network shall not require the use of a merchant category code that distinguishes a firearms retailer from other retailers. (2) Subdivision (a)(1) of this section does not apply to an electronic payment transaction at a retailer outside of this state. (b) A covered entity or its agent shall not assign a firearms retailer a merchant category code that distinguishes the firearms retailer from other retailers, including without limitation merchant category code 5723, which was approved in September 2022 by the International Organization for Standardization to firearms retailers. (c) A merchant shall not assign merchant category code 5723, which was approved in September 2022 by the International Organization for Standardization, to a purchase of firearms, firearm accessories or firearm components, or ammunition. (d) This section does not limit the ability of a financial institution or payment card network to negotiate with a responsible party or otherwise impair the financial institution's or payment card network's actions related to: (1) Dispute processing; (2) Fraud management; (3) Protecting transaction integrity from concerns related to illegal activities, a data breach, or cyberattack risks; (4) Management of a loyalty or rewards program related to an electronic payment transaction; or (5) As required by law. (e) A person, unit of government, or governmental organization shall not knowingly keep or cause to be kept a list, record, or registry of: (1) A privately owned firearm; or (2) An owner of a privately owned firearm. (f) This section does not: (1) Prevent an owner or an owner's representative from maintaining a list of the owner's firearms; or (2) Prohibit a law enforcement agency from maintaining a list, registry, or record of firearms that have been stolen or reported stolen.

Ark. Code Ann. § 23-32-604 Enforcement.

(a) The Attorney General may enforce and investigate alleged violations of this subchapter and, upon finding a violation, shall provide written notice to a person believed to be in violation of this subchapter. (b) The Attorney General may be petitioned to investigate an alleged violation of this subchapter by: (1) A firearms retailer whose business was the subject of an alleged violation of this subchapter; (2) A customer who transacted business at a firearms retailer whose business was the subject of an alleged violation of this subchapter; or (3) A person whose ownership of firearms is the subject of an alleged violation of this subchapter. (c)(1) Upon finding a violation of this subchapter, the Attorney General shall provide written notice to a person believed to be in violation of this subchapter. (2) The written notice required under subdivision (c)(1) of this section shall be made to the person believed to be in violation of this subchapter or a registered agent of the person within forty-five (45) days of the finding of the violation and contain the following: (A) Identify the evidence to be relied upon in making a determination of a violation of this subchapter; (B) Notice that the person believed to be in violation of this subchapter has thirty (30) calendar days following the receipt of the written notice to demonstrate that the person is not in violation of this subchapter; and (C) Action to be taken by the Attorney General upon making a determination of a violation of this subchapter. (3) A covered entity shall not be compelled to produce or disclose any data or information deemed confidential, privileged, or otherwise protected from disclosure by state or federal law. (d) Upon receipt of the written notice under subdivision (c)(1) of this section, a person has sixty (60) calendar days to cease the violations of this subchapter. (e)(1) If a person under subsection (d) of this section fails to cease the violations of this subchapter, the Attorney General may request an injunction against the person alleged to be in violation of this subchapter, which a court may order, in addition to any other available relief, as the court may consider appropriate. (2) If a person knowingly fails to comply with an injunction under subdivision (e)(1) of this section, the Attorney General may petition the court to recover a civil penalty in a sum not to exceed ten thousand dollars ($10,000) for each violation of the injunction. (3) An order assessing a penalty for a violation of this subchapter shall be stayed pending appeal of the order. (4) The remedies under subdivisions (e)(1) and (2) of this section are exclusive remedies for a violation of this subchapter. (f)(1) If the Attorney General provides written notice under subdivision (c)(1) of this section based on the petition of a firearms retailer or a customer of a firearms retailer, then the petitioner shall consent to the disclosure of any financial information held by a covered entity to the Attorney General, whether or not the information is confidential or proprietary to demonstrate that the covered entity is not in violation of this subchapter. (2) If the firearms retailer or customer of a firearms retailer does not consent to the disclosure of financial information under subdivision (f)(1) of this section, the Attorney General shall not pursue the petition to investigate the violation of this subchapter. (g) It is a defense to a civil proceeding initiated under this section that a person made a good faith determination that the person's action was required by applicable law. (h) This section does not create a private right of action.

Source: Public.Resource.Org / UniCourt, Official Code of Arkansas Annotated, Release 78 (2020) (unicourt.github.io/cic-code-ar)URL: https://unicourt.github.io/cic-code-ar/transforms/ar/ocar/r78/gov.ar.code.title.23.htmlFetched: 11/8/2026