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Program A: Financial Institutions

Program Authorization: R.S. 6:1-138; 6:201-550; 6:641 et seq.; 6:701-950.8; 6:970-974; 6:1031-1053; 6:1081 et seq.; 6:1111; 6:1121 et seq.; 6:1131 et seq.; 9:2130; 9:3510 et seq.; 36:101(c); 36:108(c); 37:1781-1809; 51:361-371; 51:701-724; 51:1923 et seq.; 51:2386 et seq.

PROGRAM DESCRIPTION

The mission of the Financial Institutions Program is to charter, license, and supervise those entities under its jurisdiction in order to protect the public interest and enhance confidence in the financial services industry.

The goal of the Financial Institutions Program is to promote stability and growth in Louisiana's financial services industry.

The Financial Institutions Program includes the following activities: Executive Administration, Banking/Thrifts, Consumer Services, Credit Unions, and Securities.

OBJECTIVES AND PERFORMANCE INDICATORS

1. The Office of Financial Institutions Program, through the banking/thrifts activity, will cost effectively conduct 100% of the examinations of depository financial institutions in accordance with cooperative agreements with federal agencies by the end of FY 1998-99.

2. The Office of Financial Institutions Program, through the banking/thrifts activity, will increase by 5% the examination reports processed within 1 month of receipt of the draft report in FY 1998-99.

3. The Office of Financial Institutions Program, through the consumer services activity, will conduct 100% of examinations of non-depository financial services providers, scheduled according to established OFI policies, by the end of FY 1998-99, imposing sanctions and corrective action as warranted.

1 Additional supporting indicators can be found in tables at the end of this schedule number.

2 Consists of active entities as of fiscal year end. Does not include all licensees that have been active and marked canceled the same fiscal year.

3 Includes complaints carried forward from prior fiscal year end, therefore percentage acted upon may exceed the number received.

4. The Office of Financial Institutions Program, through the credit unions activity, will cost effectively conduct 100% of the scheduled examinations of credit unions by the end of FY 1998-99.

5. The Office of Financial Institutions, through the credit unions activity, will increase by 5% the examination reports processed within 1 month of the completion of the examination in FY 1998-99.

6. The Office of Financial Institutions Program, through the securities activity, will conduct compliance examinations of 100% of registered broker-dealers and investment advisors located in the state as scheduled in cooperation with federal regulators by the end of FY 1998-99.

7. The Office of Financial Institutions Program, through the securities activity, will participate in investigations of securities activities and initiate enforcement actions as warranted in FY 1998-99.

1 Participates with other regulatory or law enforcement agencies.

8. The Office of Financial Institutions Program, through the securities activity, will process 100% of the applications for licenses within 30 days of receipt in FY 1998-99.

9. In order to carry out its statutory mandates in FY 1998-99, the Office of Financial Institutions Program, through the executive administration activity, will ensure that 100% of its cost of operations is covered by revenues collected by OFI from supervised entities.

1 This amount represents revenues budgeted to be expended, rather than gross revenues to be collected.

10. The Office of Financial Institutions Program, through the banking/thrifts and credit unions activities, will submit annual updates and five year reaccreditation review information in order to maintain the accreditation it has held by the Conference of State Bank Supervisors since 1989.

1 Will be due in FY 1999-2000.

11. The Office of Financial Institutions Program, through the consumer services activity, will conduct 100% of examinations of non-depository financial services providers, scheduled according to established OFI policies, by the end of FY 1998-99, imposing sanctions and corrective action as warranted.

1 Consists of active entities as of fiscal year end. Does not include licensees that have been active and marked cancelled the same fiscal year.

2 Effective August 15, 1997, consumer loan brokers were redesignated as loan brokers and the mortgage broker and lender program was repealed. Mortgage brokers may elect to become redesignated as loan brokers. Non-exempt mortgage lenders may elect to become notification filers on January 1, 1998.

12. The Office of Financial Institutions Program, through the consumer services activity, will conduct 100% of examinations of non-depository financial services providers, scheduled according to established OFI policies, by the end of FY 1998-99, imposing sanctions and corrective action as warranted.

1 Effective August 15, 1997, consumer loan brokers were redesignated as loan brokers and the mortgage broker and lender program was repealed. Mortgage brokers may elect to become redesignated as loan brokers. Non-exempt mortgage lenders may elect to become notification filers on January 1, 1998.

13. The Office of Financial Institutions Program, through the consumer services activity, will investigate 100% of those companies or individuals reported to be operating unlicensed in FY 1998-99.

1 Effective August 15, 1997, consumer loan brokers were redesignated as loan brokers and the mortgage broker and lender program was repealed. Mortgage brokers may elect to become redesignated as loan brokers. Non-exempt mortgage lenders may elect to become notification filers on January 1, 1998.

14. The Office of Financial Institutions Program, through the consumer services activity, will take action to resolve or refer 100% of complaints against regulated entities within 30 days in FY 1998-99.

1 Includes complaints carried forward from prior fiscal year end, therefore percentage acted upon may exceed the number received.

2 Effective August 15, 1997, consumer loan brokers were redesignated as loan brokers and the mortgage broker and lender program was repealed. Mortgage brokers may elect to become redesignated as loan brokers. Non-exempt mortgage lenders may elect to become notification filers on January 1, 1998.

15. In FY 1998-99, the Office of Financial Institutions Program, through the consumer services activity, will provide information to Louisiana consumers and lenders concerning the consumer credit laws through the Louisiana Consumer Credit Education Fund.

RESOURCE ALLOCATION FOR THE PROGRAM

SOURCE OF FUNDING

This program is funded with Fees and Self-Generated revenues and Statutory Dedications. Fees and Self-Generated revenues are derived from fees charged to businesses and corporations of the financial industry, such as banks and branch application fees, reservation of a name, holding company assessments, special examinations, trust and transfer agent examinations, thrift mergers, branch applications, credit union assessments, investigations, corporate credit union examination, consumer credit fees, licensed lender fees, sale of checks fees, collection agency fees, consumer loan broker fees, securities, and small business administration fees, etc. (Per R.S. 39:32B.(8), see table below for a listing of expenditures out of each statutory dedicated fund.) The Statutory Dedications are derived from civil penalties and overcharge violations paid to the Commissioner of Financial Institutions by regulated consumer credit entities. The penalties and overcharge payments provide funding for the Statutory Dedication Louisiana Consumer Credit Education Fund. The Louisiana Consumer Credit Education Fund will be used to finance education programs for consumers and lenders concerning the provisions of the consumer credit laws.

ANALYSIS OF RECOMMENDATION

GENERAL FUND

TOTAL

T.O.

 

DESCRIPTION

 

 

 

 

 

$0

$7,310,071

131

 

ACT 18 FISCAL YEAR 1997-1998

 

 

 

 

 

 

 

 

 

BA-7 TRANSACTIONS:

$0

$0

0

 

None

 

 

 

 

 

$0

$7,310,071

131

 

EXISTING OPERATING BUDGET - December 10, 1997

 

 

 

 

 

$0

$9,599

0

 

Equipment/Major Repairs Adjustment(s) (Non-recurring: -$86,465; Replacement: +$96,064)

$0

$99,724

0

 

Annualization of 1997 -'98 Merit Pay Adjustmen(s)

$0

$112,283

0

 

1998-'99 Merit Pay Adjustment(s)

$0

($482,056)

(14)

 

Personnel Reduction(s)

$0

$109,706

0

 

Attrition Adjustment(s)

$0

($27,385)

0

 

Retirement Rate Adjustment(s)

$0

$777

0

 

Adjustment(s) for Civil Service Training and other Statewide Interagency Transfer Activities

$0

($80,000)

0

 

Reductions in various Expenditure Categories; Including Reductions to fully fund Salaries

$0

($18,468)

0

 

Risk Management Adjustments

$0

$291

0

 

UPS Fees

$0

$1,058

0

 

Legislative Auditor Fees

$0

$5,320

0

 

Other Adjustment(s) - Increase of funding for Support Services provided by the Office of the Secretary

 

 

 

 

 

$0

$7,040,920

117

 

GRAND TOTAL RECOMMENDED

 

 

 

 

 

$0

($269,151)

(14)

 

DIFFERENCE (TOTAL RECOMMENDATION AND EXISTING OPERATING BUDGET)

The total means of financing for this program is recommended at 96.7% of the existing operating budget. It represents 92.3% of the total request ($7,593,321) for this program. At the recommended level of funding, this program will be able to provide approximately the same level of services. Reductions to overall funding is primarily due to the elimination of unnecessary vacant positions and attendant expenses.

PROFESSIONAL SERVICES

$135,000

 

Legal services - La. Sheriff's Association v. Commissioner of Financial Institutions regarding self help repossession activities by certain regulated creditors

$2,072

 

Expert witness fees

$3,000

 

Training - Providing presentations on topics related to banking, thrifts, examinations, and other regulatory areas etc.

 

 

 

$140,072

 

TOTAL PROFESSIONAL SERVICES

OTHER CHARGES

$10,348

 

Legislative Auditor expenses

 

 

 

$10,348

 

TOTAL OTHER CHARGES

 

 

 

 

 

Interagency Transfers:

$15,231

 

Pro-rata share of cost of operations of the Department of Civil Service

$1,474

 

Pro-rata share of cost of the Comprehensive Public Training Program

$3,027

 

Pro-rata share of cost of the operations of the Uniform Payroll Systems

$202,370

 

Reimbursement of costs for Support Services provided by the Office of the Secretary, Economic Development

$7,213

 

Investigatory fees for the Background checks (completed by the Office of State Police) for licensed lenders, pawnbrokers, collection agencies, and bank board members

$9,875

 

Department of Civil Service, Division of Administrative Law, Hearing Officers

 

 

 

$239,190

 

TOTAL INTERAGENCY TRANSFERS

ACQUISITIONS AND MAJOR REPAIRS

$33,100

 

Replacement of inoperable and/or obsolete computer equipment for the Executive Administration Activity consisting of twelve Personal Computers, two monitors, and a laser printer

$46,476

 

Replacement vehicles for (3) 1991 Chevrolet Corsicas which have high mileage and are not dependable for the Banking/Thift Activities

$2,700

 

Replacement of inoperable and/or obsolete computer equipment for the Banking and Thrifts Activity

$13,518

 

Replacement of inoperable and/or obsolete computer equipment for the Consumer Services Activity

$270

 

Replacement of obsolete computer portable printer for the Credit Union Activity

 

 

 

$96,064

 

TOTAL ACQUISITIONS AND MAJOR REPAIRS

05 DEPARTMENT OF ECONOMIC DEVELOPMENT


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