Sources of Revenue:

Special Fund

Legislation creates:

A New Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    Under current law, all civil administrative penalties collecetd by the Division of Banking are commingled with the general operating fund of the agency. At the end of each fiscal year, any remaining balance in that fund is turned over to the general revenue fund. The proposed amendment would create a special revenue fund for use in carrying out the Commisisoner's duty to expend funds to promote consumer awarenes and understanding of issues related to residential mortgage lending. It would set aside 10% of the total amount of civil administrative penalties collected in any given year by the agency which would not be turned over to the general revenue fund unless the balance in the new ccount exceeds $500,000. The proposed amendments relating to the authority to exam third party vendors providing information technology services to banks and the authority to utilize the Nationwide Mortgage Licensing System and Registy to collect criminal background and fingerprint information on principles and agents of financial services companies will have no impact on costs or revenues of state government.

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues -90,000 -100,000 -20,000

Explanation of above estimates (including long-range effect):

    There is no increase in personal services, current expenses, repairs and alterations, assets, other costs associated with this bill. The decrease in estimated total revenue reflect as follows:
    In fiscal year 2012, the agency has collected approximately $900,000.00 in civil adminsitrative penalties. This amount is extrememly atypical based upon the agency's average annual penalty revenues. We estimate that the full amount would exceed the agency's budget authorization at the end of the fiscal year and would therefore be turned over to revenue. If this bill were to become law during the current fiscal year, the agency would retain 10% of the total or approximately $90,000 to promote consumer awareness and understadning of issues related to residential mortgage lending, thereby reducing the amount that would otherwise be turned over to general revenue by approximately $90,000.
    In fiscal year 2013, we currently project another extremely atypical amount of revenue from civil administrative penalties which could reach or exceed $1,000,000. If the agency is authorized to retain 10% of the total penalties collected in fiscal year 2013, the agency would turn over $900,000 to the general revenue fund.
    After fiscal year 2013, we are currently project a more typical year with regard to the assessment of civil administrative penalties and therefore the overall decrease in funds that would be turned over to the general revenue fund would be less as a reflection of a decrease in the amount of penalties collected.


    Potential increases or decreases in revenue collected in the form of civil administrativfe penalties are difficult to predict as the agency assesses a penalty only after having conducted a compliance examination of a financial institution and identifies violations of West Virginia law for which the agency is authorized to assess a penalty. We are unable to predict either the frequency or severity of violations of law by the entities that this agency regulates. The estimates provided in this fiscal note are based upon examinations that have already been conducted and enforcement actions that have been negotiated and resolved. The estimated amounts in for the fiscal years after 2013 are based upon an average of the Division's collection of penalties in recent prior years.

    Person submitting Fiscal Note: Loren C. Allen
    Email Address: