C.M.R. 02, 029, ch. 131 - ASSESSMENTS - FINANCIAL INSTITUTIONS (REG. 31)

SUMMARY:

Title 9-B M.R.S.A. §214(2) requires each State-chartered financial institution to pay an assessment to the Bureau of Financial Institutions to cover the general regulatory costs, overhead, transportation and general administrative expenses of the Bureau. In 1993, the Bureau of Financial Institutions (then the Bureau of Banking) promulgated Regulation 31, effective December 27, 1993. At that time, the assessment revenue was insufficient to support the operating needs of the Bureau of Financial Institutions at levels adequate to cover the cost of the Bureau's mandated functions. The then nominal growth in the industry and the unprecedented regulatory activities necessary to address the economic recession and its adverse impact on the industry contributed to the need to promulgate rules to address the insufficient revenue stream. Regulation 31 increased the rate of assessment from 6[CENT] per $1,000 of total average assets to 7[CENT] per $1,000 of total average assets and established a special assessment for two successive 6-months periods.

Over the past several years, State-chartered financial institutions have experienced healthy and consistent growth in assets. During the same period of time, the Bureau's operating costs have remained relatively stable. Assessments paid by the State-chartered financial institutions have risen steadily and the Bureau feels that it can reduce assessments, maintain the level of revenue necessary to fund the general regulatory costs of the Bureau as required in 9-B M.R.S.A. §214(2), and still provide an adequate reserve against unanticipated expenditures. Therefore, the Bureau is repealing and replacing Regulation 31. The new Regulation 31 will lower the rate of assessment from 7[CENT] per $1,000 of total average assets to 6[CENT] per $1,000 of total average assets. The new rate of 6[CENT] per $1,000 of total average assets will remain in effect for each subsequent quarterly assessment, until such time as economic conditions warrant an increase in the assessment.

The new Regulation 31 is a routine technical rule as defined by 5 M.R.S.A. §8071(2)(A).