FUND(S):

3041

Sources of Revenue:

Special Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    This bill will transfer the responsibility for registering and overseeing those lenders subject to the law from the Tax Division to the Division of Banking. This is a step that is in line with the proposed reorganization of the Department of Tax and Revenue. It will increase the costs of the Division of Banking since it will be undertaking new responsibilities.
    
    Currently the Division of Banking already charters or licenses other financial institutions and examines them for compliance with consumer protection laws. Since the Division of Banking is a special revenue agency, any additional regulatory responsibility imposed by law must include sufficient funds from the entities regulated or else those entities already under the Division's jurisdiction (state-chartered banks and credit unions, mortgage lenders and brokers and regulated consumer lenders) would be forced to subsidize this new responsibility through higher assessments.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 15,000 15,000
Personal Services 0 10,000 10,000
Current Expenses 0 2,500 2,500
Repairs and Alterations 0 0 0
Assets 0 2,500 2,500
Other 0 0 0
2. Estimated Total Revenues 0 15,000 15,000


Explanation of above estimates (including long-range effect):


    These estimates are based upon a list of the entities that filed a notification with the Tax Division two years ago after first deducting for the entities that the proposed bill would exempt because they are already subject to licensing and regulation by the Division of Banking. After that deduction, approximately 100 entities would have to pay the $150 fee.
    
    The costs are based upon estimates of the amount of time that would be taken processing the registrations, maintaining the database, and handling consumer complaints regarding those entities that are registered. These costs would include a part-time clerical position and portions of the time for a supervisor and attorney along with other direct or indirect costs for rent, equipment and software, and other administrative overhead.
    



Memorandum


    Although the Division proposed this bill two years ago, just as we indicated in 2004, the Division of Banking no longer wishes to pursue it.
     Person submitting Fiscal Note: Bob Lamont
     Email Address: blamont@wvdob.org