HB417 Summary

• Establishes the Examination of Bank Service Providers Act authorizing the Alabama Superintendent of Banks to examine third-party service providers that serve state-regulated banks.

• Defines "service providers" as entities providing covered services (data processing, financial activities support, internet/web services, software development, security monitoring) to "serviced banks" (banks and bank holding companies under the superintendent's supervision).

• Grants the superintendent regulatory and examination authority over service providers to the same extent as if services were performed internally, when necessary to ensure safe and sound bank operations or respond to public welfare dangers.

• Allows the superintendent to accept examination results from other state or federal agencies or the Federal Financial Institution Examinations Council (FFIEC) from the preceding 24 months to promote regulatory efficiency.

• Authorizes the superintendent to enter into corrective agreements or orders with service providers, engage examiners from other agencies at reasonable compensation rates, and conduct joint examinations with other bank supervisory agencies having concurrent jurisdiction.