Kentucky makes wholesale amendments to its financial services code

State Issues State Legislation Kentucky Financial Services Bank Regulatory

On April 9, the Governor of Kentucky signed into law HB 726 (the "Act"), an act that will make substantial amendments to the state’s regulation of financial services under Chapter 286 of the Kentucky Financial Services Code. Of note, the Act will update key definitions under the state’s financial services code, including “Bank,” “Company,” “Control,” and “Deposit.” Some of the changes will amend certain powers to the financial commissioner, an appointed position by the Governor, as well as the banking experience requirements for this position. The Act also, among other things, addresses in- and out-of-state trust company rules; banking activities rules for foreign and out-of-state financial companies; bank mergers and reviews by the commissioner; bank closures; bank loan compliance under 12 U.S.C. sec. 371c (prohibiting acceptance of a security from a bank’s affiliate); the commissioner’s rules to remove any officer, director, or employee of a bank via written notice; and mortgage loan license fees, including annual assessments.