ARIZONA STATE SENATE

MOLLY GRAVER

LEGISLATIVE RESEARCH ANALYST

FINANCE COMMITTEE

Telephone: (602) 926-3171

RESEARCH STAFF

TO:                  MEMBERS OF THE SENATE

APPROPRIATIONS COMMITTEE

DATE:            February 19, 2021

SUBJECT:      Strike everything amendment to S.B. 1324, relating to financial services; fees

Purpose

            Prohibits a bank that operates in Arizona from charging or collecting certain fees for the maintenance of a savings or checking account.

Background

The United States is a dual banking system, in which banks can choose to apply for a charter from a state banking authority or a federal charter from the U.S. Office of the Comptroller of the Currency (OCC). A bank’s choice of chartering authority is also a choice of primary regulator, as state regulatory agencies serve as the primary regulators of state-chartered banks and the OCC serves as the primary regulator of national banks (Congressional Research Service). The Department of Insurance and Financial Institutions (DIFI) has statutory authority over Arizona state-chartered banks.

            A bank is a corporation that holds an Arizona banking permit issued by DIFI. The Superintendent of DIFI must investigate and examine the facts concerning a banking permit applicant and issue the banking permit if the: 1) applicant is a corporation organized under Arizona's laws having powers and purposes to engage in the banking business; 2) deposits of the bank will be insured by the Federal Deposit Insurance Corporation when the bank commences business; and 3) applicant has paid adequate capital for its prospective business. A banking permit is valid until surrendered to or revoked by the Superintendent of DIFI (A.R.S. §§ 6-201; 6-204; and 6-205).

            There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Prohibits a bank that operates in Arizona from charging or collecting a:

a) fee to open a savings or checking account; or

b) monthly service or maintenance fee, regardless of the customer's account balance, if the sole purpose of the fee is to allow a customer to maintain a savings or checking account.

2. Becomes effective on the general effective date.