Senate Republican proposes additional oversight measures on financial institutions in Florida

by | Jan 2, 2024

Senate Bill 1132, filed by Sen. Jonathan Martin, seeks to impose stricter regulations on Florida’s financial institutions, particularly targeting unjust account restrictions.

Republican Sen. Jonathan Martin filed Senate Bill 1132 on Tuesday, proposing stricter regulations and oversight measures for financial institutions in Florida.

The legislation, in close alignment with CS/HB 585, introduces amendments to Florida Statutes that would expand the grounds for suspending or disqualifying qualified public depositories, particularly targeting institutions that “unjustly” suspend, terminate, or restrict a customer’s access to their accounts.

The bill mandates that, if adopted, financial institutions must report any customer account termination or restriction of customer account access to the Florida Office of Financial Regulation (OFR). This requirement, mirroring CS/HB 585’s provisions, is exempted in cases of customer-initiated actions, account inactivity, or unclaimed accounts under certain conditions.

“A financial institution that terminates, suspends, or takes similar action restricting a customer’s or member’s account access must file a termination-of-access report with the Office of Financial Regulation, unless the termination, suspension, or similar action restricting access was due to the customer or member initiating the access change; a lack of activity in the account; or the account is presumed unclaimed,” reads the filing.

A secondary aspect of the measure, which builds on the foundation laid by CS/HB 585, is the granted authorization of the OFR to investigate these reports. If a financial institution is found to have acted in bad faith — which was left undefined in the bill draft — it will become subject to monetary sanctions and fines. The Capitolist has attempted to contact Sen. Martin for further clarification on bill terminology.

The bill also provides legal recourse for consumers by allowing members affected by a financial institution’s identified actions to seek legal damages. Under the bill, the right of action is available for 12 months following the OFR’s finding of bad faith.

In December, the Florida Bankers Association spoke against CS/HB 585, and heightened financial regulation oversight at large, contending that the language used in the legislative draft vastly underscores the process a financial institution must go through to flag a suspicious account.

“Banks are in the business of taking in deposits, we lend them out, and that’s our business. We’re not arbitrarily closing accounts and we’re complying with the law,” said Anthony DiMarco, Executive Vice President of the organization during an Insurance and Banking Subcommittee meeting. “If under the Bank Secrecy Act, we have to file a suspicious activity report, and there’s a variety of reasons why, that does not mean your account will be closed down. This notion that it’s just a few clicks on a keyboard and it goes out is incorrect.”


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