The state Senate recently advanced legislation that would transform the Banking Fund into a trust fund.
Senate Bill 432 would amend the Department of Banking and Securities Code to convert the Banking Fund into a trust fund that the Department of Banking would administer for banks, credit unions, licensees, and customers.
Interest earned by deposits or investments in the fund would stay in the fund, and any money deposited in the fund would be in trust and would not be considered general revenue for the state.
“State-chartered banks and credit unions pay bi-annual assessments to the Department of Banking & Securities for the administration of the Department, for the regulation and oversight of the banking industry in Pennsylvania and also to establish a reserve as is needed for the Department to be accredited as a financial regulatory agency,” state Sen. Dan Laughlin (R-Erie County), who introduced the bill, said.
More than $42 million in Banking Fund money was transferred to the General Fund and the Departments of Conservation and Natural Resources and Environmental Protection budgets in 2018 and 2019.
The bill moves to the House of Representatives for consideration. If the bill becomes law, it will go into effect immediately.