This bill changes the banking laws to clarify certain provisions and provides additional regulatory powers essential to effective regulation of Maine chartered banks and credit unions.

The bill clarifies the definition of deposit production offices and amends the statutory prohibition for the operation of deposit production offices to more closely align it to federal law.

The bill establishes procedures for the appointment of a conservator in the event that a financial institution is operating in an unsafe or unsound or other potentially hazardous condition and needs to reorganize or be put into a sound condition. Conservation is a step that can be taken, specifically in the case of limited purpose financial institutions whose accounts are not insured by a federal insurance agency, before liquidation is ordered by the Superintendent of Financial Institutions.

The bill clarifies the superintendent's authority to order an institution closed and the appointment of a receiver and sets forth additional authority and limitation from liability in conservation or liquidation.

The bill establishes a notification procedure that must be followed if a state-chartered financial institution makes a fundamental change in asset composition.

The bill establishes an asset pledge requirement that the superintendent may enforce in a nondepository trust company, merchant bank or uninsured bank as necessary for the protection of the public.

This bill clarifies existing authority of the superintendent to remove an officer or director from office or prohibit further participation by the officer or director in the conduct of the affairs of a financial institution or a financial institution holding company when similar action has been taken by the appropriate federal banking agency or when an officer or director has evidenced dishonesty or unfitness by conduct with respect to another business entity.