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: Timeliness of division responses to ANCSA requests for investigation and inquiries.

Performance Detail

Target #1: Charter, license or register entities and persons in regulated financial services industries. Analysis of results and challenges: Continued rapid growth of the financial services challenges the division’s ability to complete timely the statutorily mandated licensing and examination functions along with taking timely enforcement actions to protect Alaskan consumers and promote safe and sound financial systems for economic growth. Significant changes in corporate structuring, financial technologies, expanded use of cryptocurrencies, and offshore management and support functions, require a sufficient number of experienced examiners to manage. Out-of-state travel for examinations and specialized training schools to keep current with industry and regulatory changes is essential to manage ongoing increases in workload. The use of online registries, the STAR database, and other tools enables the division to streamline processing and reduce the regulatory burden on licensees and applicants.

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 between 18 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: Fifty-five investigations were ongoing as of June 30, 2019 with 88 cases opened and 197 closed during FY2020. The division issued 11 final administrative orders and requested 7 license applications be withdrawn for not meeting licensing requirements. HB170, Alaska Securities Act, was passed and became effective on January 1, 2019 and new or updated regulations for both securities and ANCSA are being drafted.

Target #1: ANCSA corporations and shareholders timely file annual reports and proxy solicitations. Analysis of results and challenges: Almost 1,600 ANCSA corporate and proxy solicitation filings were processed in FY2019 continuing the significant increase that started in FY2017. ANCSA corporations meeting the thresholds of total assets exceeding $1,000,000 and 500 shareholders are required to file with the division the annual reports and proxy solicitation materials made available to at least 30 of its Alaska resident shareholders. The division makes filed materials available for public access and responded to 148 direct requests for specific ANCSA filings in FY2019.

Target #2: Timeliness of division responses to ANCSA requests for investigation and inquiries. Timely Responses to ANCSA Requests for Investigation (within 10 days) Fiscal Year Complaints Received Timely Responses FY 2019 32 +14.29% 32 +14.29% FY 2018 28 -40.43% 28 -40.43% FY 2017 47 +261.54% 47 +261.54% FY 2016 13 -40.91% 13 -38.1% FY 2015 22 +175% 21 +162.5% FY 2014 8 -42.86% 8 -42.86% FY 2013 14 +16.67% 14 +16.67% FY 2012 12 +300% 12 +300% FY 2011 3 3 Analysis of results and challenges: By regulation, the division must review and respond to ANCSA shareholder requests for investigation within 10 business days. Although the number of requests dropped from the peak of FY2017, requests for investigation continue at a significantly higher number than the average for the period of FY2011 through FY2016.

Current as of December 9, 2019