New law looks to shore up protections for Pennsylvania banking industry

(The Center Square) – Legislation authored by Rep. Sheryl Delozier, R-Cumberland, aiming to strengthen the dual banking system in Pennsylvania was signed into law by the governor recently.

Act 39 of 2021 amends the Department of Banking and Securities Code to change the banking fund to a trust fund for the benefit of banking institutions and credit unions.

The change includes examination and regulation of institutions, and a reserve to be maintained to cover any emergencies such as loss of revenue or adverse economic conditions.

The legislation will also change the Institution Resolution Account into a trust fund for the benefit of banks, trust companies, credit unions, savings banks, and their customers.

The bill is the product of lengthy negotiation between banking groups and the Department of Banking and Securities.

“This clarifies that the secretary of Banking builds up a reserve in the institution resolution account to pay the costs and protect the consumers if a bank or credit union would fail and not impair the ability of the department to perform its duties,” Delozier said.

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