Kentucky Statutes 286.2-040 – Examination of service provider by commissioner or other state or federal regulatory agency — Confidentiality and evidentiary value of report — Examination fees — Cooperative agreements
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(1) As used in this section:
(a) “Covered service” means:
1. Data processing;
2. Any activity that supports financial services, including but not limited to lending, funds transfer, fiduciary activity, trading activity, and deposit taking; and
3. Internet-related services, including but not limited to Web services and electronic bill payments, mobile applications, system and software development and maintenance, and security monitoring;
(b) “Depository institution” means any:
1. State bank as defined in KRS § 286.3-010;
2. Branch of an out-of-state bank as defined in KRS § 286.3-010 that is doing business under the laws of this state;
3. Trust company as defined in KRS § 286.3-010; or
4. Credit union as defined in KRS § 286.6-005; and
(c) “Service provider” means any person that provides a covered service listed in paragraph (a) of this subsection to a depository institution, except any:
1. Bank service company that is examined and regulated by the appropriate federal banking agency. For the purposes of this subparagraph, “bank service company” and “appropriate federal banking agency” have the meanings set forth in the Bank Service Company Act, 12 U.S.C. § 1861, as amended, or any successor statute;
2. Depository institution, holding company of a depository institution, or subsidiary of that holding company; and
3. Federally chartered depository institution, holding company of a federally chartered depository institution, or subsidiary of that holding company. For the purposes of this subparagraph, “federally chartered depository institution” means a bank, savings association, or credit union organized pursuant to the laws of the United States.
(2) The commissioner may examine a service provider for any covered service it provides to a depository institution if the examination is conducted in conjunction with an examination conducted by a properly authorized federal regulatory agency.
(3) The commissioner may accept an examination made by other properly authorized state or federal regulatory agencies that have concurrent jurisdiction over a service provider in lieu of any examination authorized or required under the laws of this state.
(4) A report of examination and related correspondence shall be considered confidential information. No person shall release any information contained in
the examination unless required by court order. Notwithstanding this subsection, the department may furnish:
(a) A copy of a report of examination performed by the commissioner of the condition and affairs of any service provider to the depository institutions serviced by the service provider; and
(b) To and exchange information and reports of examinations with officials and examiners of other properly authorized state or federal regulatory agencies.
(5) Every official report concerning a service provider, and every report of examination, shall be prima facie evidence of the facts contained in the report for any purpose in any action in which the department or service provider is a party.
(6) The commissioner shall fix a scale of examination fees to be paid by service providers. The fees shall be:
(a) Sufficient to cover the cost of the examination based upon a fair compensation for time and actual expense;
(b) Assessed and paid by service providers promptly after completion of the examination; and
(c) Set by administrative regulation.
(7) The commissioner may enter into cooperative agreements with other properly authorized state or federal regulatory agencies that have concurrent jurisdiction over a service provider to facilitate the examination process, including joint examination, scheduling, resources, fee collection and sharing, report of examination processing, and enforcement actions.
Effective:June 29, 2017
History: Created 2017 Ky. Acts ch. 87, sec. 2, effective June 29, 2017.
(a) “Covered service” means:
Terms Used In Kentucky Statutes 286.2-040
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Commissioner: means the commissioner of the Department of Financial
Institutions. See Kentucky Statutes 286.1-010 - Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Department: means the Department of Financial Institutions. See Kentucky Statutes 286.1-010
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Fiduciary: A trustee, executor, or administrator.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: means a natural person, or any type or form of corporation, company, partnership, proprietorship, association, or other legal entity. See Kentucky Statutes 286.1-010
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Statute: A law passed by a legislature.
1. Data processing;
2. Any activity that supports financial services, including but not limited to lending, funds transfer, fiduciary activity, trading activity, and deposit taking; and
3. Internet-related services, including but not limited to Web services and electronic bill payments, mobile applications, system and software development and maintenance, and security monitoring;
(b) “Depository institution” means any:
1. State bank as defined in KRS § 286.3-010;
2. Branch of an out-of-state bank as defined in KRS § 286.3-010 that is doing business under the laws of this state;
3. Trust company as defined in KRS § 286.3-010; or
4. Credit union as defined in KRS § 286.6-005; and
(c) “Service provider” means any person that provides a covered service listed in paragraph (a) of this subsection to a depository institution, except any:
1. Bank service company that is examined and regulated by the appropriate federal banking agency. For the purposes of this subparagraph, “bank service company” and “appropriate federal banking agency” have the meanings set forth in the Bank Service Company Act, 12 U.S.C. § 1861, as amended, or any successor statute;
2. Depository institution, holding company of a depository institution, or subsidiary of that holding company; and
3. Federally chartered depository institution, holding company of a federally chartered depository institution, or subsidiary of that holding company. For the purposes of this subparagraph, “federally chartered depository institution” means a bank, savings association, or credit union organized pursuant to the laws of the United States.
(2) The commissioner may examine a service provider for any covered service it provides to a depository institution if the examination is conducted in conjunction with an examination conducted by a properly authorized federal regulatory agency.
(3) The commissioner may accept an examination made by other properly authorized state or federal regulatory agencies that have concurrent jurisdiction over a service provider in lieu of any examination authorized or required under the laws of this state.
(4) A report of examination and related correspondence shall be considered confidential information. No person shall release any information contained in
the examination unless required by court order. Notwithstanding this subsection, the department may furnish:
(a) A copy of a report of examination performed by the commissioner of the condition and affairs of any service provider to the depository institutions serviced by the service provider; and
(b) To and exchange information and reports of examinations with officials and examiners of other properly authorized state or federal regulatory agencies.
(5) Every official report concerning a service provider, and every report of examination, shall be prima facie evidence of the facts contained in the report for any purpose in any action in which the department or service provider is a party.
(6) The commissioner shall fix a scale of examination fees to be paid by service providers. The fees shall be:
(a) Sufficient to cover the cost of the examination based upon a fair compensation for time and actual expense;
(b) Assessed and paid by service providers promptly after completion of the examination; and
(c) Set by administrative regulation.
(7) The commissioner may enter into cooperative agreements with other properly authorized state or federal regulatory agencies that have concurrent jurisdiction over a service provider to facilitate the examination process, including joint examination, scheduling, resources, fee collection and sharing, report of examination processing, and enforcement actions.
Effective:June 29, 2017
History: Created 2017 Ky. Acts ch. 87, sec. 2, effective June 29, 2017.