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It’s About Time: Bringing Pennsylvania’s Banking Law into the 21st Century

February 2013

The authors discuss the details and ramifications of three bills recently signed into law in Pennsylvania that will strengthen its bank regulatory scheme.

On October 24, 2012, Pennsylvania Governor Tom Corbett signed into law three bills that will strengthen the bank regulatory scheme in Pennsylvania. These bills, HB 2368, HB 2369, and HB 2370, dubbed the “banking modernization legislation,” were initiated through a joint effort between the Pennsylvania Department of Banking and Securities (the “Department”) and the Pennsylvania Bankers Association to streamline the regulatory scheme in Pennsylvania, improve Pennsylvania’s competitiveness in the banking industry, and comply with the new federal Dodd-Frank Wall Street Reform and Consumer Financial Protection Act (“Dodd-Frank”).1

Probably the most significant changes contained in the three bills are found in HB 2369 which amends the Department of Banking and Securities Code (“DOBS Code”)2 to enable the Department for the first time to impose meaningful civil money penalties against financial institutions, their officers, employees and directors. Also, in amending the Banking Code of 1965 (“Banking Code”),3 HB 2368 modernizes and, where necessary, expands upon the legal authority of state banks as well as implementing where appropriate, the requirements of Dodd-Frank. Finally, HB 2370 amends the Loan Interest and Protection Law (“LIPL”)4 to eliminate variable rate disclosure requirements deemed to be duplicative of federal law. All three bills took effect on December 24, 2012, which was 60 days from the date the governor signed them into law. The following summary outlines in much more detail the specifics and ramifications of these bills.

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