Performance Details

Department of Commerce, Community, & Economic Development - Banking and Securities

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Mission

Protect consumers of financial services and promote safe and sound financial systems.

Core Services

• Charter, license and register financial institutions and products.
• Examine records of businesses and individuals to ensure compliance with federal and state law or regulation.
• Investigate consumer complaints and take appropriate enforcement action.
• Accept and file annual reports and election materials from Alaska Native Claims Settlement Act (ANCSA) corporations for public access and respond timely to requests for investigation.

Mission Results

Core Services

A: Sound and competitive financial systems.  Details >

A1: Charter, license and register financial institutions and products.  Details > TARGET #1: Charter, license or register entities and persons in regulated financial services industries. A2: Examine records of businesses and individuals to ensure compliance with federal and state law or regulation.  Details > TARGET #1: Examine the operations of depository and other financial services businesses to ensure sound fiscal and consumer practices. A3: Investigate consumer complaints and take appropriate enforcement action.  Details > TARGET #1: Investigate and take action to enforce the law as necessary. A4: Accept and file annual reports and election materials from Alaska Native Claims Settlement Act (ANCSA) corporations for public access and respond timely to requests for investigation.  Details > TARGET #1: ANCSA corporations and shareholders timely file annual reports and proxy solicitations. TARGET #2: Timely respond to ANCSA requests for investigation.

Performance Detail

Target #1: Charter, license or register entities and persons in regulated financial services industries. Analysis of results and challenges: The strong national economy continues to drive growth in registrations and licensing. On-going changes in financial technology including internet applications and the use of cryptocurrencies, coupled with new business models that move aspects of the operations offshore continue to put pressure on the division’s ability to stay current with examination standards, take timely and appropriate enforcement actions, or provide consumer education to meet the agency’s mission. Passage of updated laws will allow the division to further streamline regulatory activities and leverage national electronic filing registries and multi-jurisdiction examination and enforcement resources.

Target #1: Examine the operations of depository and other financial services businesses to ensure sound fiscal and consumer practices. Analysis of results and challenges: Depository institution examinations are scheduled every 12 to 18 months in coordination with federal regulators. Examinations of other financial services businesses where Alaska is the sole regulator are generally scheduled between18 months and three years apart, with the exception of mortgage lenders and money transmitters located outside Alaska. Those entities are typically examined in cooperation with other states to gain efficiencies and expand Alaska’s ability to reach more licensees. Compliance examinations may be scheduled sooner if risk factors such as poor exam results or consumer complaints indicate the need for more frequent reviews. As the number and complexity of regulated entities increase, so does the pressure on the division staff to timely schedule and complete examinations.

Target #1: Investigate and take action to enforce the law as necessary. Analysis of results and challenges: Thirty-four active investigations were ongoing as of June 30, 2018 with 77 cases opened and 213 cases closed during the prior 12-month period. The division issued 20 final orders and requested 21 license applications be withdrawn for not meeting licensing requirements. The State’s ability to assess sanctions on bad actors or facilitate the return of losses to harmed Alaskans is woefully inadequate due to existing statutory penalties. However, passage of HB170, Alaska Securities Act, includes authority to increase penalties with the adoption of new regulations in the second half of FY2019.

Target #1: ANCSA corporations and shareholders timely file annual reports and proxy solicitations. Analysis of results and challenges: The number of Alaska Native Claims Settlement Act (ANCSA) corporate and proxy solicitation filings more than tripled in FY2017 and rose again in FY2018 to almost 1,550 submissions. Under AS 45.55.139, if an ANCSA corporation has total assets exceeding $1,000,000 and has 500 or more shareholders, all annual reports and proxy solicitation materials made available to at least 30 of its Alaska resident shareholders must be concurrently filed with the division. The division assists candidates and corporations with filing requirements and makes filed materials available for public access. 137 requests for public information specific to ANCSA filings were processed in FY2018.

Target #2: Timely respond to ANCSA requests for investigation. Timely Responses to ANCSA Requests for Investigation (within 10 days) Fiscal Year Complaints Received Timely Responses FY 2018 28 28 FY 2017 47 47 FY 2016 13 13 FY 2015 22 21 FY 2014 8 8 FY 2013 14 14 FY 2012 12 12 FY 2011 3 3 Analysis of results and challenges: By regulation, the division must respond to Alaska Native Claims Settlement Act (ANCSA) requests for investigation within 10 business days. Although the number of requests dropped from the peak in FY2017, the number filed with the division remains high compared with most years.

Current as of December 19, 2018