State Bank Department and State Banking Board

Ark. Code Ann. tit. 23, ch. 46

in effect

Ark. Code Ann. § 23-46-101 Confidential records.

(a) Notwithstanding the Freedom of Information Act of 1967, § 25-19-101 et seq., the following records of the State Bank Department shall be confidential and shall not be exhibited or revealed to the public except as stated in this section or in accordance with department rules: (1) All examination reports filed with the department; (2) All records disclosing information obtained from examinations; (3) Investigations and reports revealing facts concerning a financial institution or the customers of a financial institution; and (4) All personal financial statements submitted to the department for any purpose. (b) Notwithstanding any provision of this section to the contrary, records deemed confidential in accordance with this section may be disclosed, in the Bank Commissioner's discretion, as follows: (1) Under a validly issued subpoena and in the interest of justice, the commissioner may waive the privilege created in this section and produce examination reports and other related documents under the provisions of a protective order entered by a court or administrative tribunal of competent jurisdiction when the order is designed to protect the confidential nature of the information so disclosed from public dissemination; (2) Official orders of the department may be disclosed within the discretion of the commissioner if the commissioner makes a determination that such a disclosure would not give advantage to a competitor or adversely affect the safety and soundness of the financial institution; and (3) To state and federal regulatory agencies with jurisdiction over financial institutions or entities engaging in financial activities, including, but not limited to, insurance and securities brokerage and underwriting. (c) The commissioner shall have the power to promulgate rules with regard to disclosure of confidential information.

Ark. Code Ann. § 23-46-201 Creation of State Bank Department.

There is created and established, at the seat of government of this state, a department to be known as the “State Bank Department”. The State Bank Department shall be a division of the Department of Commerce.

Ark. Code Ann. § 23-46-203 Seal — Evidentiary effect — Fees.

(a) An appropriate seal shall be procured to be the official seal for the State Bank Department. (b) Every paper executed by the Bank Commissioner in pursuance of the authority conferred upon him or her by law and sealed with the seal of the department or certified by the department shall be received in evidence and recorded in the proper recording offices in the same manner as deeds regularly acknowledged. (c)(1) Whenever it is necessary for the commissioner to approve any instrument and to affix the official seal thereto, the commissioner shall charge a fee as provided by rule for affixing his or her approval and the official seal to the instrument. (2) Copies of all records and papers in the office of the department certified by the commissioner and authenticated by the seal shall be received in evidence in all cases equally and of like effect as the originals thereof. (3) Whenever it is proper to furnish a copy of any paper filed in the department and to certify that paper, the commissioner may charge a fee as provided by department rule.

Ark. Code Ann. § 23-46-204 Bank Commissioner — Appointment and removal.

(a) The Governor, by and with the advice and consent of the Senate, shall appoint a Bank Commissioner who shall: (1) Be a resident of this state; (2) Be at least thirty (30) years of age; and (3) Have not less than five (5) years' experience either in practical banking or in the bank department of a state. (b) The commissioner shall be the head of the State Bank Department and shall hold his or her office for the term of four (4) years beginning from the date of actual appointment by the Governor and expiring four (4) years from that date and until a successor is appointed. (c) The commissioner may be removed by the Governor from office for neglect of duty, malfeasance, misfeasance, extortion or corruption in office, incompetency, or mental or physical disability to such an extreme as to render the commissioner unable or unfit for the discharge of his or her duties, or for any offense involving moral turpitude while in office committed under color of or connected with such an office. (d) In the event there shall be an inability to serve in the office caused by death, suspension, removal, disability, disqualification, or resignation of the commissioner, a deputy commissioner previously designated by the commissioner shall exercise the powers and perform the duties of the commissioner until a successor is appointed by the Governor, with the advice and consent of the Senate, who shall serve for the remainder of the unexpired term fixed by law. (e) The commissioner shall report to the Secretary of the Department of Commerce.

Ark. Code Ann. § 23-46-205 Bank Commissioner — Powers and duties.

(a) The Bank Commissioner shall be charged with the general supervision of financial institutions, the execution of all laws passed by the State of Arkansas relating to the organization, operations, inspection, supervision, control, liquidation, and dissolution of banks, bank holding companies, subsidiary trust companies, and the general commercial banking business of Arkansas, and such other duties as prescribed by law. (b)(1) The commissioner shall have the power to issue such rules as may be necessary or appropriate to carry out the intent and purposes of all those laws and to issue cease and desist orders against any financial institution, or an officer, director, or employee of any financial institution, found to be violating federal banking laws or regulations, violating the banking laws of this state or State Bank Department rules, violating any regulatory agreement, or jeopardizing the safety and soundness of any financial institution. (2)(A) The commissioner may issue rules only with the approval and consent of the State Banking Board, but he or she shall have the power to issue cease and desist orders upon his or her own motion. (B) Nothing in this section shall be construed to curtail the commissioner's power to issue emergency rules with the approval and consent of the board. (3)(A) Any person subject to a cease and desist order issued by the commissioner who refuses or fails to comply with the terms of the order may be assessed a monetary penalty for the failure to comply with the provisions of the cease and desist order after a ten-day notice given by the commissioner to the institution or person subject to the order. (B) The amount of the monetary penalty shall not exceed one thousand dollars ($1,000) per day of violation against each institution and each officer, director, or employee contributing to the institution's or the individual's failure to comply with the provisions of the cease and desist order. (C) Subject to such a limitation, the amount of the monetary penalty shall be determined by the commissioner. (4) The commissioner has grounds for and may issue a cease and desist order for the permanent or temporary removal of an officer, director, employee, agent, or any other person participating in the affairs of or otherwise connected with a financial institution, or any affiliate thereof, subject to the supervision of the commissioner from service to any institution or affiliate subject to the supervision of the commissioner if he or she is found by the commissioner to be or to have been: (A) Violating state or federal law, rules and regulations of a federal financial institution's regulatory agency, or State Bank Department rules; (B) Acting incompetently, recklessly, or dishonestly; (C) Indicted of a crime involving moral turpitude; or (D) Otherwise impairing the safety and soundness of the financial institution. (5)(A) Any person aggrieved and directly affected by an order of the commissioner issued pursuant to this section is entitled to judicial review. (B) A person so aggrieved may seek judicial review by petition to a circuit court having jurisdiction in the matter. (C) The petition must be filed within thirty (30) days from the date of issuance of the order. (D) If no petition for review is filed within thirty (30) days from the date of issuance of the order, the order may not be appealed and is permanently binding upon the person until terminated by the commissioner. (c) Department rules shall be distributed, in form and method selected by the commissioner, to all state banks chartered in the State of Arkansas. (d) In addition to other powers, the commissioner shall have the power and authority to: (1) Inspect and copy all books, records, and other information relating to the financial institutions he or she regulates; (2) Restrict withdrawal of deposits from state banks under extraordinary circumstances; (3) Subpoena witnesses, compel their attendance, require production of evidence, and administer oaths; (4) Approve or disapprove applications for new state bank charters or branch facilities in connection with failed institutions as provided in § 23-48-511; (5) Approve or disapprove applications for voluntary liquidations as provided in § 23-49-119; (6) Define any term or phrase used in the Arkansas Banking Code of 1997 which is not defined by the Arkansas Banking Code of 1997; (7) Issue orders or declaratory statements, disseminate information, and otherwise exercise discretion to effectuate the purposes of the Arkansas Banking Code of 1997 and all laws described in subsection (a) of this section, and to interpret and implement the provisions of those laws consistently with such purposes; (8) Authorize state banks to engage in any banking activity in which national banks are authorized or may hereafter be authorized by federal legislation or regulations to engage; (9) Cooperate with federal financial institutions' regulatory agencies; (10)(A) Perform preemployment state criminal background checks through the Division of Arkansas State Police and preemployment federal criminal background checks through the Federal Bureau of Investigation on all applicants selected for employment as examiners with the department. (B) The federal background check shall include taking fingerprints of the applicant. (C) The applicant shall sign a release authorizing the Division of Arkansas State Police and the Federal Bureau of Investigation to disclose criminal history information about the applicant to the department. (D) The commissioner shall treat the information as confidential and shall disclose the information only to the applicant; and (11) Approve and execute on behalf of the department: (A) An agreement issuing bonds under § 23-46-202; and (B) Any documents necessary for issuing bonds under § 23-46-202. (e)(1) As soon as practicable after acceptance of any application referred to either in the Arkansas Banking Code of 1997 or in department rules for filing, regardless of whether the application is of a type referred to in § 23-46-403, and receipt of the filing fee therefor, the commissioner shall cause the merits of the application to be investigated. (2) The investigation shall enable the commissioner to determine the fitness of the applicants and shall address all questions which bear directly or indirectly upon the appropriateness of granting the application and the need from the public standpoint for granting the application. (3) To the extent that the commissioner deems it appropriate, the scope of the commissioner's investigation of any application may include: (A) The investigation of those matters described in § 23-48-304 pertaining to applications for new state bank charters; and (B)(i) The performance of state criminal background checks through the Division of Arkansas State Police and federal criminal background checks through the Federal Bureau of Investigation. (ii) The federal background check shall include the taking of fingerprints. (iii) The applicant shall sign a release authorizing the Division of Arkansas State Police and the Federal Bureau of Investigation to disclose criminal history information about the applicant to the department. (iv) The commissioner shall treat the information as confidential and shall disclose the information only to the applicant. (v) The background checks shall be used to determine the applicant's fitness to participate in the affairs of a state bank. (f) A criminal background check obtained under this section shall be retained by the commissioner for at least three (3) years from the commissioner's receipt of the background check.

Ark. Code Ann. § 23-46-206 Employment and duties of staff generally.

(a)(1) The Bank Commissioner, in consultation with the Secretary of the Department of Commerce, shall employ from time to time the assistants, examiners, clerks, stenographers, counsel, and other personnel as he or she may find necessary to properly and efficiently discharge the duties of his or her office. (2) The commissioner shall be authorized to set minimum qualifications for these persons and to fix their levels of compensation within the limitations of the numbers of employees and the appropriations for their salaries as provided from time to time by acts of the General Assembly, provided he or she shall incur no expense until an appropriation shall have been made therefor nor in excess of the revenues of the State Bank Department. (b) Counsel employed by the commissioner shall advise the commissioner in all legal matters affecting the State Bank Department. (c) Notwithstanding any other provisions of state law, and in order to maintain the confidentiality of information and the security of State Bank Department personnel in the performance of their duties, the commissioner shall be authorized to establish travel reimbursement guidelines for payment of expenses of State Bank Department personnel incurred in the performance of their duties. (d) If the commissioner is not himself or herself at any time available for the transaction of any specific matter committed by law to his or her authority or discretion, any one of the deputy commissioners, or any other staff member so designated by the commissioner in writing, may transact such matter in the name and stead of the commissioner. (e)(1) The commissioner, each member of the State Banking Board, the deputy commissioners, chief examiners, counsel, each examiner, each accountant, each attorney, and each other officer, person, or employee, or both, of or for the State Bank Department shall not be personally liable for damages occasioned by his or her official acts or omissions, except when the acts or omissions are corrupt and malicious. (2) The Attorney General shall defend any action brought against any of the above-mentioned persons by reason of his or her official acts or omissions, regardless of whether at the time of institution of the action the defendant has terminated his or her service with the State Bank Department.

Ark. Code Ann. § 23-46-207 Interests in financial institutions prohibited.

(a)(1) No employee or officer of the State Bank Department, or employee or officer of the Department of Commerce working within the State Bank Department, who participates in the examination of a financial institution, or who may be called upon to make an official decision or determination affecting the operation of a financial institution, shall be an officer, director, attorney, owner, or holder of stock in any state bank, registered out-of-state bank, or bank holding company which controls a state bank or a registered out-of-state bank, or receive, directly or indirectly, any payment or gratuity from any such organizations. (2) A person subject to this section may not borrow money from a state bank or registered out-of-state bank which is an out-of-state state-chartered bank except as provided in subsection (b) of this section. (b) A person subject to this section may: (1) Be a depositor in any financial institution that the department regulates and participate in such overdraft programs associated with such deposit relationships as the commissioner may, by rule, allow; and (2) Purchase banking services, other than credit services, under rates and terms generally available to other customers of the financial institution.

Ark. Code Ann. § 23-46-209 Records and financial reports — Disposition of funds.

(a) The Bank Commissioner shall keep a true and perfect record of all of the business of the State Bank Department and shall make monthly reports to the Auditor of State of all fees he or she collects. (b) All fees and other revenues received by the department shall be deposited into the State Treasury as special revenues and credited to the State Bank Department Fund to be used solely for the payment of the expenses of the department pursuant to the appropriations therefor. (c) Upon proper voucher from the commissioner, the Auditor of State shall issue the Auditor of State's warrant on the Treasurer of State in payment of all salaries and other expenses incurred in the administration of the Arkansas Banking Code of 1997.

Ark. Code Ann. § 23-46-210 Annual and biennial reports of Bank Commissioner.

(a) The Bank Commissioner shall make an annual report to the Secretary of the Department of Commerce of the work and the business of the State Bank Department, which shall embrace a statement of all receipts and expenditures and the name, officers, directors, domicile, capital, surplus, net profits, and deposits of each state bank, in the state, and such other information as the commissioner deems advisable. (b) The commissioner shall also, biennially, make a detailed estimate of the expenses of the State Bank Department for the two (2) succeeding fiscal years.

Ark. Code Ann. § 23-46-211 Retention of State Bank Department records.

(a) The State Bank Department shall retain its general records for at least ten (10) years, with the following exceptions: (1) Transcripts of hearings before the State Banking Board or the Bank Commissioner shall be retained for at least three (3) years; (2) Applications submitted to the department shall be retained for at least three (3) years; and (3) Articles of incorporation and amendments thereto and stock transfer certificates and approvals shall be retained permanently, except in cases in which the records concern a bank which has been merged, sold, or liquidated, in which cases the records shall be retained for at least five (5) years. (b)(1) In lieu of retention of the original records thereof, the department may cause any or all of its records and records held at any time in its custody to be photographed or otherwise reproduced in permanent form. (2) Any photograph or other reproduction shall have the same force and effect as the original thereof and be admitted into evidence equally as with the original.

Ark. Code Ann. § 23-46-212 Emergency powers of Bank Commissioner — Legislative findings and intent — Definitions.

(a) The General Assembly: (1) Finds that in the event of an emergency, the Bank Commissioner should be authorized to take appropriate action to expedite the recovery of a community affected by the emergency and to encourage banks to meet the credit, deposit, and other financial needs of the community; and (2) Intends by the enactment of this section to authorize the commissioner when warranted by a state of emergency to assist the affected community by: (A) Declaring with the consent of the Governor a state of emergency in this state; (B) Temporarily modifying or suspending banking laws, regulations, or requirements; (C) Taking any other action appropriate to assist affected banks so that: (i) Customary banking services can continue to be provided; and (ii) Financial stability can be maintained; and (D) Declaring a state of emergency in another state if: (i) The declaration of a state of emergency is limited in scope to an affected branch office of an Arkansas state-chartered bank that is under the regulatory authority of the commissioner; and (ii) Prior notice is given to the relevant state banking regulatory authority of the state in which the emergency is to be declared. (b) As used in this section: (1) “Affected area” means the geographic location described in a proclamation by the commissioner declaring a state of emergency; (2) “Affected bank” means a bank with an office in the geographic location described in a proclamation by the commissioner declaring a state of emergency; (3) “Office” means a physical location where a bank transacts business or conducts banking operations; (4) “Officer” means: (A) A person designated by the board of directors, board of trustees, or other governing body of a bank to act for the bank under this section; or (B) The president or chief executive officer or other person in charge of an office if: (i) A designation under subdivision (b)(4)(A) of this section has not been made; or (ii) An officer designated under subdivision (b)(4)(A) of this section is not available; and (5)(A) “State of emergency” means a natural or man-made occurrence or condition that may: (i) Affect the ability of a bank to conduct normal business operations; or (ii) Pose a threat to the safety or security of a person or property. (B) “State of emergency” includes without limitation an occurrence or condition caused by: (i) A natural disaster; (ii) A tornado; (iii) A storm; (iv) A flood; (v) High water; (vi) An earthquake; (vii) A drought; (viii) A fire; (ix) An act of war, rebellion, violent demonstration, or terrorism; (x) A robbery of a bank or other financial institution; or (xi) A cyberattack on, or a cybersecurity breach of, a bank or other depository institution. (c)(1) In addition to any other law of this state or of the United States authorizing the closing of a bank or excusing the delay by a bank in the performance of its duties and obligations because of a situation or condition beyond the bank's control, the commissioner may with the Governor's consent declare by written proclamation that a state of emergency exists in all or part of the state. (2) The proclamation and any order issued under this section: (A) Shall be published on the commissioner's website; and (B) May be disseminated in any other manner deemed appropriate by the commissioner under the circumstances. (d)(1) If the commissioner declares a state of emergency under this section, the commissioner may authorize an affected bank by written order to: (A) Close an office within the affected area; and (B) Keep the office closed for a reasonable amount of time until the office can be reopened. (2) A bank that closes an office under this section shall notify the commissioner as promptly as conditions permit by any means reasonably available of the: (A) Reason for closing the office; and (B) Expected length of time the office will be closed. (3) If an office is closed under this section: (A) Each day that the office is closed shall be treated for banking purposes as a legal holiday; and (B) An affected bank or a director, officer, or employee of an affected bank shall not because the office is closed: (i) Incur any liability; or (ii) Forfeit any legal or equitable rights. (e)(1)(A) If the commissioner finds that an affected bank closed an office as a result of a state of emergency and that the opening of a temporary office by the affected bank will help meet the credit, deposit, and other financial needs of the customers of the affected area, the commissioner may authorize the affected bank by written order to open a temporary office either within the state or at a location in another state. (B) The temporary office may be a mobile branch, temporary office space, or any other facility approved by the commissioner. (2) The formal application process, requirements, and fees for opening a temporary office may be suspended when a state of emergency exists. (3) A temporary office opened under this section may remain open until the commissioner with the consent of the Governor declares that the state of emergency no longer exists unless written permission to remain open is granted by the commissioner upon application by an affected bank to establish an office at the site of the temporary office. (f)(1) An order issued by the commissioner under this section becomes effective upon issuance and continues for one hundred twenty (120) days or unless terminated sooner by the commissioner. (2) The commissioner may extend an order issued under this section for an additional period not to exceed one hundred twenty (120) days if the commissioner with the consent of the Governor finds that the existing state of emergency continues or that a new state of emergency exists. (g) The commissioner may by rule: (1) Adopt additional procedures to implement this section; and (2) Impose sanctions under § 23-46-205 for a violation of this section.

Ark. Code Ann. § 23-46-301 Creation — Members — Administration.

(a) There is created a commission which shall be known as the “State Banking Board”. (b)(1) The board shall be composed of six (6) members appointed by the Governor, subject to confirmation by the Senate, for terms of five (5) years or until a successor has been appointed and qualified. (2)(A) At the time of their appointment, all members of the board shall be, and shall continue thereafter to be, residents of the State of Arkansas. (B) They shall be age thirty (30) or over. (3) Board members serving on May 30, 1997, shall continue to serve the remainder of their terms. (c)(1)(A) For purposes of filling vacancies on the board, members shall be numbered one (1) through six (6), inclusive. (B)(i) Three (3) members shall be designated banker members, two (2) members shall be designated public members, and one (1) member shall be designated as the representative of the elderly. (ii) A banker member is a person whose primary occupation is banking. A public member is a person whose primary occupation is outside the field of banking. The representative of the elderly shall be sixty (60) years of age or older and shall not be actively engaged in or retired from the occupation of banking. (C) One (1) of the banker members shall be designated the State Bank Department member, and the other two (2) shall be designated the Arkansas Bankers Association members. These positions are to be determined by lot. (2) On the occasion of a vacancy on the board of a department member, a successor shall be selected from among two (2) or more bankers whose names shall be supplied by the Bank Commissioner. (3) On the occasion of a vacancy on the board of one (1) of the Arkansas Bankers Association banker members, a successor shall be appointed by the Governor after consulting the Arkansas Bankers Association, and the appointment shall be subject to confirmation by the Senate. (4) The board shall consist of one (1) member from each of the four (4) congressional districts as prescribed in § 7-2-101 et seq., and two (2) members from the state at large, one (1) of whom shall be the representative of the elderly. (d)(1) No member of the board shall receive, directly or indirectly, any compensation or recompense for his or her services on the board. (2) Notwithstanding § 25-16-901 et seq., should any member of the board live outside the capital city of the state, he or she may, upon application to the commissioner, be reimbursed out of the income of the office of the commissioner and in the manner provided by law for the actual travel and subsistence expense as may actually have been incurred by him or her in connection with attendance at any meeting of the board. (e) The office of the commissioner shall be the office of the board. (f) The board may select as its secretary, a deputy bank commissioner, or a stenographer employed in the office of the commissioner, but no compensation shall be paid to any person whatsoever for services rendered as secretary of the board. (g)(1) Except as provided in § 23-46-402, the presence at any meeting of at least four (4) members of the board shall be necessary to constitute a quorum, and the concurring votes of not less than a majority of the members present at any meeting shall be necessary to the decision of any question or issue or the authorization of any action. (2) The representative of the elderly shall be a full voting member.

Ark. Code Ann. § 23-46-302 Special State Banking Board members.

(a) When any member of the State Banking Board is disqualified for any reason to hear and participate in the determination of any matter pending before the board, the Governor shall appoint a qualified person to hear and participate in the decision on the particular matter. (b) The special board member so appointed shall have all authority and responsibility of a regular board member with respect to the particular matter before the board but shall have no authority or responsibility with respect to any other matter before the board.

Ark. Code Ann. § 23-46-303 Study of banking statutes.

The State Banking Board is authorized, at such times as it deems appropriate, to request a review or study of state banking law and to recommend any changes that it may deem appropriate to the Secretary of the Department of Commerce.

Ark. Code Ann. § 23-46-304 Powers of State Banking Board — Filings with Bank Commissioner.

(a) In addition to all other powers conferred by Arkansas law, the State Banking Board shall have the power and duty to: (1) Approve or disapprove all applications for charters for new state banks, except applications for new state bank charters in connection with failed institutions as provided in § 23-48-511; (2) Approve or disapprove all applications for the merger or consolidation of one (1) or more banks, out-of-state banks, or savings and loan associations into a state bank; (3) Approve or disapprove all applications for the purchase by one (1) state bank of over fifty percent (50%) of the assets of another depository institution, and all applications for the assumption by one (1) state bank of over fifty percent (50%) of the liabilities of another depository institution; (4) Approve or disapprove all applications by a savings and loan association to convert to a state bank; (5) Approve or disapprove all applications for amendments to the articles of incorporation of an existing state bank; (6) Approve or disapprove all applications for the relocation of a state bank's main office from one (1) municipality to another; (7) Approve or disapprove all rules promulgated by the Bank Commissioner; (8) Authorize a state bank under circumstances in which it is not given authority under state law to participate in any public agency hereinafter created under the laws of this state or of the United States, the purpose of which is to afford advantages or safeguards to banks or trust companies, and to authorize compliance with all requirements and conditions imposed upon the participants; (9) Subpoena witnesses; and (10) Require such clerical and technical assistance as is necessary or appropriate to carry out its duties. (b) Upon the submission to it by the commissioner of each application, the board shall review the results of the commissioner's investigation and make further investigation, if any, that it may deem appropriate to enable it to determine the fitness of the applicants, the need from the public standpoint for the granting of the application, and all other questions, whether or not of like kind with those referred to in this section, which bear directly or indirectly upon the need or desirability from the public standpoint for the granting of the application. (c)(1) Filing with the commissioner of any application or document required by the Arkansas Banking Code of 1997 or by State Bank Department rules shall be public notice of the matters contained in that application or document. (2) The commissioner shall maintain the applications or documents in his or her custody. (3) Upon request, the commissioner shall provide verification of the filing and reasonable access to inspection by the public. (4) Nothing in this section shall be construed to modify the prohibitions upon the disclosure of confidential information contained in § 23-46-101 or the commissioner's authority to issue rules concerning the disclosure of confidential information.

Ark. Code Ann. § 23-46-305 Applications.

(a) All applications which the State Banking Board is empowered to consider for approval or disapproval shall, as soon as practicable, be submitted by the Bank Commissioner to the board for consideration at a regular meeting of the board or at a special meeting called for the purpose thereof. (b) Applications of the types described in § 23-46-304(a)(1)-(4) must demonstrate that the applicant has the minimum amount of capital that the commissioner may require.

Ark. Code Ann. § 23-46-401 Applicability.

Nothing in this subchapter is intended to have any application to: (1) A merger under which a state bank merges into a national bank which is an Arkansas bank; (2) Any consolidation proceeding under which a state bank becomes consolidated into a national bank which is an Arkansas bank; or (3) Any proceeding under which a state bank is converted into a national bank or a national bank is converted into a state bank.

Ark. Code Ann. § 23-46-402 Meetings of board — Notice.

(a)(1) The Chair of the State Banking Board or the Bank Commissioner may call a special meeting of the board upon notice through a personal communication with each member of the board by telephone or through a written notice transmitted by ordinary, certified, or registered mail, personal delivery, overnight delivery, or telefacsimile directed to each member of the board at his or her business or residence address as shown on the records of the board. (2) The records of the State Bank Department shall affirmatively reflect the time and manner in which the meeting was called and notice thereof given. (b) The board members may waive any notice of a special meeting by signing a written consent to the holding of the meeting or by appearing at the meeting and participating therein. (c) In the instances in which notice of a special meeting is not waived by the board members, the notice shall be given to the board members at least fourteen (14) days before the meeting. (d)(1) If at any time it is impossible for the commissioner or the chair to give notice of a meeting to board members because of the death, disability, or absence from the state of the members, a meeting of the board may be called by notice given to the members who are available. (2) In this event, the unanimous action of three (3) of the members who were so served with notice shall be the action of the board. (3) This rule shall also be applicable in situations in which, under subsection (g) of this section, the board is permitted to act informally without a fixed meeting. (e) The board may also hold regular meetings on dates fixed in its procedures, policies, and rules. (f)(1) The board may permit any or all of its members to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all members participating may simultaneously hear each other during the meeting. (2) A member participating in a meeting by this means is deemed to be present in person at the meeting. (g)(1) Matters other than applications described in § 23-46-403 requiring the board's consideration and which are not contested may, in the commissioner's discretion, be considered by the board through mailing or delivering of all necessary documents and correspondence to all board members, no formal meeting being necessary. (2) Applications submitted to the board according to this procedure must be filed with the commissioner for at least three (3) days prior to submission to the board with no protest’s having been filed. (3) Where the application is thus submitted, the written approval or disapproval endorsed upon the application, or a copy thereof, and transmitted to the commissioner by at least four (4) members of the board shall represent the action of the board.

Ark. Code Ann. § 23-46-403 Applications.

When any of the following applications are filed with the Bank Commissioner, the sponsors of the applications shall give notice of filing in accordance with State Bank Department rules: (1) An application for the issuance of a new state bank charter; (2) An application for the merger or consolidation of one (1) or more banks into a state bank; (3) An application for the merger or consolidation of one (1) or more savings and loan associations into a state bank; (4) An application for the purchase by one (1) state bank of greater than fifty percent (50%) of the assets of another depository institution or an application for the assumption by one (1) state bank of greater than fifty percent (50%) of the liabilities of another depository institution; or (5) An application for the change of a state bank's place of business from one municipality to another.

Ark. Code Ann. § 23-46-404 Applications fees — Bank Commissioner's rules.

(a) The State Banking Board shall have the power to set and impose fees for any and all applications, regardless of whether the applications are of a type described in § 23-46-403, which are reasonably calculated to defray the costs associated with the consideration, investigation, and processing of those applications. (b)(1) The Bank Commissioner may issue rules specifying the circumstances under which any application must be filed and the procedural and substantive requirements governing the filing of any and all applications of whatever type. (2) The commissioner may also issue rules requiring the submission of applications that are not described in the Arkansas Banking Code of 1997.

Ark. Code Ann. § 23-46-405 Investigation — Notice of hearing.

(a) When the departmental investigation pursuant to § 23-46-205 or § 23-48-304 is closed and the application fees have been paid, an application filed pursuant to § 23-46-403 shall be referred to the State Banking Board for consideration by it and the Bank Commissioner at a public hearing. (b) Notice of the time, place, and purpose of the meeting shall be given at least thirty (30) days before the hearing as follows: (1) By letter from the commissioner to the sponsors of the application and to any protestant that has filed an official written protest to the application; and (2) By release to news media.

Ark. Code Ann. § 23-46-406 Hearing.

(a)(1) No person shall appear in opposition to the application unless the person has filed a written protest to the application within fifteen (15) days after the actual filing of the application. (2) The protest must be accompanied by a filing fee of not less than two thousand dollars ($2,000) nor more than five thousand dollars ($5,000) for each protestant, such amount to be set by State Bank Department rule. (b) At the hearing all persons sponsoring the application and any person making a timely written protest against the application may appear. The attorneys for any such person may appear and be heard. (c) The Bank Commissioner will participate with the State Banking Board in the hearing. (d) The board or the commissioner may subpoena witnesses on their own motion or on the request of any party to the proceedings. (e)(1) The admission of evidence at the hearing shall be controlled by § 25-15-213. The parties shall have the right to cross-examine witnesses. (2) Official notice may be taken of judicially cognizable facts and of generally recognized technical or scientific facts within the board's specialized knowledge. (3) The parties may bind themselves by stipulation. (f) The applicant shall be responsible for procuring and paying for a verbatim record of the proceeding. It will be the duty of the applicant to furnish at least one (1) copy of the transcript to the commissioner free of charge.

Ark. Code Ann. § 23-46-407 Decision — Judicial review.

(a) The State Banking Board shall render its decision in writing at or after a hearing before it, which decision shall include the board's findings of fact and conclusions of law. (b)(1)(A) If the application is approved by the board, the Bank Commissioner may, in the event that he or she also shall approve the application, grant the relief sought. (B) If the commissioner does not concur in the board's grant of the application, the relief sought shall not be granted, and the commissioner's written decision stating his or her reasons for not concurring shall be attached to the copy of the board's decision and shall be mailed to each person who actively appeared and participated in the hearing. (2) If the board shall disapprove the application, the commissioner shall not grant the relief sought. (c)(1) The time for filing a petition for judicial review under the Arkansas Administrative Procedure Act, § 25-15-201 et seq., shall run from the date the final decision of the board is mailed or delivered in written form to the parties desiring to appeal. (2) The hearing of the petition for review will be advanced on the docket of each reviewing court as a matter of public interest.

Ark. Code Ann. § 23-46-501 Call for reports.

The Bank Commissioner shall have power to call for reports from state banks and subsidiary trust companies whenever deemed necessary, in order to obtain a full and complete knowledge of their condition or the status of their reserves, but he or she shall call upon each of them for at least two (2) reports each year.

Ark. Code Ann. § 23-46-502 Statement on call.

(a) Every state bank and subsidiary trust company operating under the supervision of the Bank Commissioner shall make to the commissioner, whenever required by him or her, a statement of its assets and liabilities as shown by its records at the close of business on the day designated, which day shall be prior to the call of the commissioner. (b) The commissioner shall not give notice to any person whomsoever of the date on which he or she will call for the statement. (c) The reports shall be verified by the institution's president or chief executive officer or a vice president and shall be attested by at least two (2) directors. (d)(1) The reports required by this section shall embrace the amount of paid-up capital, surplus, net undivided profits, deposits, and all other liabilities of whatsoever character. (2)(A) It shall also state the amount loaned upon real estate, notes, bills of exchange, overdrafts, bonds, and other securities, stating the actual market value of the bonds or securities, the amount invested in real estate for banking premises, other real estate owned, when and how acquired, and the actual cost, cash on hand and on deposit in other banks, subject to check, with the amount and character of all other assets, together with such other information as the commissioner may require. (B) Any commercial or other unsecured paper past due twelve (12) months on which the interest is unpaid and not in process of collection shall not be included as an asset in the report.

Ark. Code Ann. § 23-46-503 When examinations made.

(a) The Bank Commissioner shall, as often as may be deemed necessary or proper, appoint suitable persons to make an examination of each state bank or subsidiary trust company. (b)(1) A thorough examination into the affairs of each state bank or subsidiary trust company shall be made at least once every twenty-four-month period. Provided, however, the twenty-four-month period may be extended to a thirty-six-month period if an interim thorough examination is performed by the state bank's or subsidiary trust company's primary federal regulatory authority. (2) The commissioner may authorize examinations at more frequent intervals if he or she shall deem it proper. (c)(1) The commissioner shall direct the State Bank Department to make an annual examination into the affairs of nonprofit corporations that have registered with the commissioner to be a regulated economic development enterprise under this subsection and that registration has been approved by the State Banking Board. (2) A nonprofit corporation electing to be a regulated economic development enterprise shall certify in its registration to the commissioner that the nonprofit corporation: (A) Was previously registered under the Arkansas Development Finance Corporation Act, § 15-4-901 et seq. [repealed]; (B) Is a domestic nonprofit corporation with a total equity of the nonprofit corporation and any subsidiaries exceeding five million dollars ($5,000,000); (C) Provides financing for the promotion, development, and conduct of Arkansas business; (D) Together with any of its subsidiaries, has loan receivables that exceed fifteen million dollars ($15,000,000); and (E) Shall provide reasonable cooperation and assistance to the department during an examination. (3)(A) A regulated economic development enterprise registered under this subsection shall pay to the department, within ten (10) days after notice from the commissioner in the months of January and July of each year, an assessment fee in accordance with an assessment fee schedule approved by the commissioner. (B) The commissioner, with the approval of the board, shall also have the authority to establish a schedule of fees to be charged by the department relative to registrations which are reviewed by the department, as well as a schedule of other fees to be charged for service performed by the department. (C) The assessments may be increased if not sufficient in connection with other fees received as mentioned in this section to defray the expenses of the department. (4)(A) The commissioner shall be charged with the general supervision of regulated economic development enterprises, with the power to issue cease-and-desist orders against any regulated economic development enterprise, or an officer, director, or employee of a regulated economic development enterprise, found to be violating state or federal law, rules, or regulations of a federal regulatory agency, violating any regulatory agreement, or jeopardizing the safety and soundness of the regulated economic development enterprise. (B) The commissioner has grounds for and may issue a cease-and-desist order for the permanent or temporary removal of an officer, director, employee, agent, or any other person participating in the affairs of or otherwise connected with a regulated economic development enterprise, or any affiliate thereof, if he or she is found by the commissioner to be or to have been: (i) Violating state or federal law, rules and regulations of a federal regulatory agency, or department rules; (ii) Acting incompetently, recklessly, or dishonestly; (iii) Indicted of a crime involving moral turpitude; or (iv) Otherwise impairing the safety and soundness of the regulated economic development enterprise. (C)(i) A person who is subject to a cease-and-desist order issued by the commissioner who refuses or fails to comply with the terms of the order may be assessed a monetary penalty for the failure to comply with the cease-and-desist order after a ten-day notice given by the commissioner to the regulated economic development enterprise or person who is subject to the order. (ii) The amount of the monetary penalty shall not exceed one thousand dollars ($1,000) per day of the violation against each regulated economic development enterprise and each officer, director, or employee contributing to the regulated economic development enterprise's or the person's failure to comply with the cease-and-desist order. (iii) Subject to the limitation described in subdivision (c)(4)(C)(ii) of this section, the amount of the monetary penalty shall be determined by the commissioner. (D) The commissioner may revoke a nonprofit corporation's status as a regulated economic development enterprise under this subsection if the commissioner determines, after examination and investigation, that the regulated economic development enterprise: (i) Is or has been violating state or federal law; (ii) Is violating the rules and regulations of a federal regulatory agency; (iii) Fails to meet the minimum equity requirements under subdivision (c)(2) of this section; or (iv) Is operating or has been operated in a manner that jeopardizes the safety and soundness of the regulated economic development enterprise. (E)(i) The commissioner shall have the power to issue such rules as may be necessary or appropriate with the approval and consent of the board. (ii) This section shall not be construed to curtail the commissioner's power to issue emergency rules with the approval and consent of the board. (F) In addition to other powers under this section, the commissioner shall have the power and authority to: (i) Inspect and copy all books, records, and other information relating to a regulated economic development enterprise; and (ii) Subpoena witnesses, compel their attendance, require production of evidence, and administer oaths. (G)(i) A person or regulated economic development enterprise aggrieved and directly affected by an order of the commissioner issued under this subsection is entitled to judicial review. (ii) A person or regulated economic development enterprise may seek judicial review by petition to a circuit court of competent jurisdiction. (iii) The petition shall be filed within thirty (30) days from the date of issuance of the order. (iv) If a petition is not filed within thirty (30) days from the date of issuance of the order, the order shall not be appealed and is permanently binding upon the person until terminated by the commissioner. (5) A nonprofit corporation that is registered as a regulated economic development enterprise, that is in compliance with federal and state laws, rules, and regulations, and that does not have any regulatory proceeding pending against it may withdraw its registration as a regulated economic development enterprise.

Ark. Code Ann. § 23-46-504 Examination of affiliates.

The Bank Commissioner may make at any time, and from time to time, such examinations of the affairs of affiliates of state banks or of affiliates of subsidiary trust companies as shall be necessary to disclose fully the relations between the state banks and their affiliates or between the subsidiary trust companies and their affiliates, and the effect of those relations on the affairs of the state banks or subsidiary trust companies.

Ark. Code Ann. § 23-46-505 Noncompliance with banking law — Special examinations.

Whenever it shall come to the knowledge of the Bank Commissioner that any state bank or subsidiary trust company has failed or refused to comply with any of the provisions of the Arkansas Banking Code of 1997, with any provision of federal law or federal regulations applicable to financial institutions, with any State Bank Department rules, or with any direction of the commissioner made specifically to that state bank or subsidiary trust company as a result of an examination into its affairs, he or she is authorized, as a penalty for that failure or refusal, to make a special examination of the state bank or subsidiary trust company, to charge and collect the same fees therefor as for a regular examination, and to continue such examinations and charges at intervals of thirty (30) days or less until such provisions, regulations, rules, and directions are complied with.

Ark. Code Ann. § 23-46-506 Examination procedure.

(a) The Bank Commissioner or any examiner appointed by him or her shall have power to make a thorough examination of all the records and affairs of any state bank, any Arkansas bank holding company, or any subsidiary trust company. (b)(1) In making examinations, the representative of the State Bank Department may examine under oath any stockholder, director, officer, agent, clerk, or other employee or representative of the state bank, Arkansas bank holding company, or subsidiary trust company, or any other person, touching the matters he or he may be authorized to inquire and examine into. (2)(A) He or she may subpoena and, by attachment, compel the attendance of any person in this state to testify under oath before him or her in relation to the affairs of the state bank, Arkansas bank holding company, or subsidiary trust company. (B) All witnesses who appear in obedience to a subpoena shall be entitled to and shall receive the same per diem fees and mileage as witnesses in civil cases in the circuit courts of this state. (c)(1) The representative of the department making the examination shall make a detailed report of the financial institution so examined, which report shall be filed in the office of the commissioner. (2) All comments or criticisms contained in each report shall be presented to the board of directors by the management of the financial institution so examined promptly after receipt thereof.

Ark. Code Ann. § 23-46-507 Information furnished state or federal agencies.

(a) The Bank Commissioner may share with or furnish to any state or federal examiner or regulatory agency with jurisdiction over any financial institution or other entity conducting financial activities, including, but not limited to, insurance or securities brokerage or underwriting, copies of any or all examinations or any information with reference to the condition of the affairs of any state bank, subsidiary trust company, or other institution which the State Bank Department regulates. (b) The commissioner is authorized to enter into cooperative arrangements with state and federal regulatory agencies to achieve the purposes of the Arkansas Banking Code of 1997.

Ark. Code Ann. § 23-46-508 Noncooperation with examiners.

(a) The Bank Commissioner may revoke a state bank's or subsidiary trust company's authority to transact business and may proceed to wind up its business whenever any officer of the state bank or subsidiary trust company: (1) Refuses to submit the books, papers, and effects thereof to the inspection of the commissioner or examiners; (2) In any manner obstructs or interferes with the commissioner, or examiner, in the discharge of his or her duties; or (3) Refuses to be examined on oath touching the affairs of the financial institution. (b) The commissioner may issue a cease and desist order whenever an officer of any financial institution acts in any manner described in subsections (a)(1)-(3) of this section.

Ark. Code Ann. § 23-46-509 Assessment fees, application fees, and other department fees.

(a) Every state bank and subsidiary trust company shall pay to the State Bank Department, within ten (10) days after notice from the Bank Commissioner in the months of January and July of each year, an assessment fee which will be charged in accordance with an assessment fee schedule approved by the commissioner. (b) The commissioner, with the approval of the State Banking Board, shall also have the authority to establish a schedule of fees to be charged by the department relative to applications which are reviewed by the department, as well as a schedule of other fees to be charged for service performed by the department. (c) For each examination made in excess of two (2) per year, the state bank or subsidiary trust company so examined shall pay an additional assessment equal to the January assessment of the year in which the excess examination is made. (d)(1) The assessments provided for in this section may be reduced by the commissioner if the assessments, with other fees received by the department, produce a greater sum than is required to pay the expenses of the department. (2) The assessments may be increased if not sufficient in connection with other fees received as aforesaid to defray the expenses of the department.

Ark. Code Ann. § 23-46-510 Failure to make report or pay fees — Penalty.

(a) Any financial institution that refuses or fails, for thirty (30) days after notice from the Bank Commissioner, to make any report to the commissioner, or fails to pay any fees for ten (10) days after the date of notice by the commissioner, shall be given an additional notice through personal service or by letter from such person of the office of the commissioner as the commissioner may designate. (b)(1) If the failure continues for ten (10) days after the receipt of the additional notice, then the commissioner may assess a monetary penalty against the financial institution for each separate failure or refusal of one hundred dollars ($100) each day for the first thirty (30) days after receiving the notice of delinquency from the commissioner and one thousand dollars ($1,000) per day of violation for every day thereafter. (2) Alternatively, in the case of a state bank or subsidiary trust company, if the failure continues for ten (10) days after the receipt of the additional notice, the commissioner may take charge of the state bank or subsidiary trust company, as provided in case of insolvency.

Ark. Code Ann. § 23-46-511 Retention of records.

(a) Every state bank or subsidiary trust company shall retain its business records for periods that are or may be prescribed by or in accordance with the terms of this section. (b) Each state bank or subsidiary trust company shall retain permanently the minute books of meetings of its stockholders and directors, its capital stock ledger and capital stock certificate ledger or stubs, and all records which the Bank Commissioner and the State Banking Board shall, in accordance with the terms of this section, require to be retained permanently. (c) All records other than those described in subsection (b) of this section shall be retained for periods that the commissioner and board, in accordance with the terms of this section, shall prescribe. (d) The commissioner shall issue rules, with the approval of the board, prescribing the period for which records must be maintained. The periods may be permanent or for a term of years. (e) Any state bank or subsidiary trust company may dispose of any records which have been retained for the period prescribed in accordance with the terms of this section and shall, after it has disposed of a record, thereafter be under no duty to produce the record in any action or proceeding. (f)(1) In lieu of retention of the original records, any state bank or subsidiary trust company may cause any or all of its records, and records held at any time in its custody, including those held by it as a fiduciary, to be photographed or otherwise reproduced in permanent form. (2) Any photograph or other reproduction shall have the same force and effect as the original thereof and be admitted into evidence equally as with the original.

Ark. Code Ann. § 23-46-512 Changes in chief executive officer and directors.

Every financial institution shall report promptly to the Bank Commissioner any change for whatever reason in the chief executive officer and directors, including in its report a statement of the past and current business and professional affiliations of the new chief executive officer and directors.

Ark. Code Ann. § 23-46-601 Title.

This subchapter shall be known and may be cited as the “Examination of Technology Service Providers Act”.

Ark. Code Ann. § 23-46-602 Definitions.

As used in this subchapter: (1) “Bank supervisory agency” means the same as defined in § 23-45-102; (2)(A) “Covered service” means a service provided by a technology service provider to a depository institution in this state to the extent that the service is designed and marketed specifically for use by depository institutions to provide financial services to their customers. (B) “Covered service” includes: (i) Data processing services; (ii) Activities that support financial services, including without limitation lending, funds transfer, fiduciary activities, trading activities, and deposit-taking; (iii) Internet-related services, including without limitation web services, electronic bill payments, mobile applications, system and software development and maintenance, and security monitoring; and (iv) Activities related to the business of banking; (3) “Depository institution” means an entity or financial institution as defined in § 23-45-102(a)(19) or § 23-45-102(a)(21), including any subsidiary or affiliate of the depository institution that is subject to examination by the Bank Commissioner; (4) “Internet service provider” means any provider that provides a subscriber with access to the internet; and (5)(A) “Technology service provider” means a person, company, corporation, or other legal entity that provides a covered service. (B) “Technology service provider” does not mean: (i) An internet service provider or a general audience internet platform; (ii) A person, company, corporation, or other legal entity licensed under the Uniform Money Services Act, § 23-55-101 et seq.; or (iii) An authorized delegate of a licensee under the Uniform Money Services Act, § 23-55-101 et seq.

Ark. Code Ann. § 23-46-603 Technology service providers subject to examination by Bank Commissioner.

When a depository institution receives a covered service, by contract or otherwise, the performance of that service by a technology service provider to the depository institution is subject to examination by the Bank Commissioner to the same extent as if the covered service were performed by the depository institution itself.

Ark. Code Ann. § 23-46-604 Authorization for agreements with bank supervisory agencies regarding use of examiners.

The Bank Commissioner may enter into agreements with any bank supervisory agency that has jurisdiction over a technology service provider to: (1) Engage the services of the bank supervisory agency's examiners at a reasonable rate of compensation; or (2) Provide the services of the State Bank Department's examiners to the bank supervisory agency at a reasonable rate of compensation.

Ark. Code Ann. § 23-46-605 Authorization for joint examinations or joint enforcement actions with bank supervisory agencies.

The Bank Commissioner may enter into joint examinations or joint enforcement actions with a bank supervisory agency having jurisdiction over a technology service provider.

Ark. Code Ann. § 23-46-606 Acceptance of examinations from bank supervisory agency.

The Bank Commissioner may accept an examination that is conducted by a bank supervisory agency that has jurisdiction over a technology service provider as a substitution for an examination under this subchapter.

Ark. Code Ann. § 23-46-607 Enforcement — Rules.

The Bank Commissioner may by rule: (1) Adopt additional procedures to implement this subchapter; and (2) Impose sanctions under § 23-46-205 for violations of this subchapter by a technology service provider if the commissioner considers the enforcement action to be necessary or appropriate to enforce this subchapter and ensure compliance with the laws of this state.

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