Bill description: HB 473 amends and adds to Chapter 21, Title 26, Idaho Code, known as the Idaho Credit Union Act.
Does it create, expand, or enlarge any agency, board, program, function, or activity of government? Conversely, does it eliminate or curtail the size or scope of government?
HB 473 significantly expands the regulatory power of the Idaho Department of Finance (IDF), giving its director broad authority to “make an examination and investigation into the affairs of … a person or business providing any of the following services to a credit union or to a credit union service organization:
(i) Data processing services;
(ii) Activities that support financial services, including but not limited to lending funds transfer, fiduciary activities, trading activities, and deposit taking;
(iii) Internet related services, including but not limited to web services and electronic bill payments, mobile applications, system and software development and maintenance, and security monitoring; and
(iv) Activities related to the business of a credit union.”
This broad regulatory authority is extended to include private vendors, offering a wide range of services, who are not traditionally under the purview of the IDF.
HB 473 also allows the director to “administer oaths and examine under oath any person concerning the affairs of any credit union.” The director would have this authority over all of the vendors and others mentioned above.
Compounding this overreach, HB 473 goes on to say that the director may “issue subpoenas to and require the attendance and testimony of any person at any place within this state and require witnesses to produce books, papers, files, records, and other sources of information.” [Emphasis added] Without limitation, this section appears to include customers of credit unions and anyone else the IDF director chooses.
Does it directly or indirectly create or increase penalties for victimless crimes or non-restorative penalties for nonviolent crimes? Conversely, does it eliminate or decrease penalties for victimless crimes or non-restorative penalties for non-violent crimes?
HB 473 adds language to Idaho code that allows the director of the Idaho Department of Finance to take punitive actions against a credit union or any person who is “about to engage in an unsafe or unsound practice” or “about to violate any provision of this chapter.” Such preemptive enforcement is based on the director’s perception rather than an actual act. This runs counter to justice. It should also be noted that “unsafe and unsound” is not defined in HB 473 nor anywhere else that we can find, which further compounds the troubling nature of this expansive and preemptive authority.
HB 473 adds language to Idaho code that allows civil penalties of up to $1,000 per day to be assessed against any “director, officer, supervisory committee member, employee, agent, or other person participating in the conduct of the affairs” of a credit union. This penalty can be assessed for violating “any of the provisions of this chapter, any rule promulgated pursuant to this chapter, or any lawful order of the director issued pursuant to this chapter.” Based on the earlier section that defined external vendors as being under the authority of the IDF, they too may be subject to this onerous penalty.
Does it violate the principle of equal protection under the law? Examples include laws which discriminate or differentiate based on age, gender, or religion or which apply laws, regulations, rules, or penalties differently based on such characteristics. Conversely, does it restore or protect the principle of equal protection under the law?
HB 473 places a significant regulatory burden on credit unions that is not imposed on banks and other for-profit financial institutions. Much of the new language being created to allow these regulations of credit unions is unique and does not apply to banks. The reasons for this disparity are unclear, especially since credit unions are already more responsive to their members based on their cooperative nonprofit structure.