SB321 Alabama 2018 Session

Summary

Primary Sponsor

Linda Coleman-MadisonSenator

Democrat

Session

Regular Session 2018

Title

Examination of Bank Service Providers Act, created, authorize Superintendent of Banks to examine service providers that provide services to certain banks, Secs. 5-3A-30 to 5-3A-35, inclusive, added

Summary

SB 321 creates the Examination of Bank Service Providers Act, giving Alabama's Superintendent of Banks authority to examine service providers that supply essential services to banks to help ensure safety and soundness.

What This Bill Does

The bill authorizes the Superintendent of Banks to appoint examiners to inspect service providers that perform covered services for serviced banks (excluding national banks). It defines service providers and covered services, including data processing, financial services support, and internet-related services. If another regulator has examined the provider within the last 24 months, the superintendent may rely on that examination instead of conducting a new one. Examination reports are confidential but may be shared with the serviced bank's board and the FFIEC, and the act allows joint examinations, corrective orders, and sole-source contracts for examiner services.

Who It Affects

• Serviced banks (banks, bank holding companies, bank service companies, and their subsidiaries or affiliates that rely on service providers) will be subject to examinations of the service providers that perform covered services to ensure safe and sound operation.
• Regulators and bank boards (including the Alabama State Banking Department, other bank supervisory agencies, and the FFIEC) will coordinate examinations, share reports, and may conduct joint examinations or enforcement actions related to service providers.

Key Provisions

• Establishes the Examination of Bank Service Providers Act and authorizes the Superintendent of Banks to examine service providers that serve banks (excluding national banks).
• Defines key terms: Service Provider and Serviced Bank, and lists covered services (data processing, financial services support, internet-related services, etc.).
• Allows reliance on examinations conducted by other regulators within the prior 24 months; superintendent may accept those results in lieu of a new exam.
• Keeps examination reports confidential but permits sharing with serviced banks' boards of directors and FFIEC; reports and information may be shared under existing confidentiality provisions.
• Authorizes sole-source contracts with other bank supervisory agencies to obtain examiner services and permits joint examinations or enforcement actions with concurrent-jurisdiction agencies.
• Empowers the superintendent to issue corrective orders and enter into corrective agreements with service providers as needed to protect bank safety and public welfare.
• Effective immediately after passage and approval by the Governor.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Banks and Banking