2001-02-05                     Senate Journal                      Page 0269
SB 66                                                                                             
SENATE BILL NO. 66 BY THE SENATE RULES COMMITTEE                                                    
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
          "An Act relating to the authorizations for state                                          
          financial institutions; relating to confidential financial                                
          records of depositors and customers of certain                                            
          financial institutions; relating to the Alaska Banking                                    
          Code, Mutual Savings Bank Act, Alaska Small Loans                                         
          Act, and Alaska Credit Union Act; and providing for                                       
          an effective date."                                                                       
                                                                                                    
was read the first time and referred to the Labor and Commerce,                                     
Judiciary and Finance Committees.                                                                   
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, zero, Department of Community and Economic                                      
  Development                                                                                       
                                                                                                    
Governor's transmittal letter dated February 2:                                                     
                                                                                                    
Dear President Halford:                                                                             
                                                                                                    
This bill I transmit today allows state financial institutions to compete                           
on equal terms with their federal counterparts by removing current                                  
restraints on the state's financial industry. These changes are                                     
encouraged under the federal Gramm-Leach-Bliley Act which permits                                   
the combining of banking institutions with insurance and securities                                 
businesses. Previous federal law prohibited this practice.                                          
                                                                                                    
This bill allows the Department of Community and Economic                                           
Development to grant state banks those powers enjoyed by national                                   
banks in a simplified, efficient process.                                                           
                                                                                                    
                                                                                                    
                                                                                                    
                                                                                                    
                                                                                                    

2001-02-05                     Senate Journal                      Page 0270
The bill is patterned after federal law, but offers greater protection to                           
depositor and consumer financial records. The state would use the                                   
more stringent practice of asking depositors and consumers to choose                                
to allow specific disclosure of their records. Conversely, federal law                              
and many other states allow disclosure unless the depositor or                                      
consumer specifically requests confidentiality.                                                     
                                                                                                    
The bill also clarifies and updates existing statutes, partly in response                           
to discussions with the financial industry. For example, the bill allows                            
state banks to publish their financial reports in electronic form or in a                           
local newspaper, and simplifies the procedure by which state banks                                  
obtain authority to install off-premises automated teller machines. The                             
bill also removes the statutory limitation on the interest rate and fees                            
state banks may charge on credit cards and grants credit unions the                                 
authority to issue credit cards. These provisions will keep Alaska                                  
banks competitive with out-of-state banks.                                                          
                                                                                                    
As a means of modernizing Alaska's financial institutions, I urge your                              
prompt and favorable action on this measure.                                                        
                                                                                                    
       Sincerely,                                                                                   
       /s/                                                                                          
       Tony Knowles                                                                                 
       Governor