What is “dedicated funding?”
“Dedicated funding” is a term used to describe the new way that the Division of Banking within the New Jersey Department of Banking and Insurance is funded. As of July 1, 2006, a new state law changed the way the Division of Banking is funded. Under the dedicated funding system, the Division's funds are segregated from the State General Fund, and regulated depositories and licensees will be assessed for actual expenses incurred by the Division. Each individual assessment is predicated on the annual business volume of each licensee in proportion to the total annual business volume of all licensees.
Explanation of the new law
In August 2005, the Legislature and Governor enacted a new law to fund the Division of Banking on a dedicated basis, the same way that the Division of Insurance, Real Estate Commission, and Bureau of Securities are funded. Rather than paying fees to the State for general purposes, the Division of Banking will recoup its actual expenses by billing all regulated depositories and licensees after the expenses have been incurred and placing the receipts in a segregated account. However, the
Division's billings are still limited by the budgeted amount allotted to it by the Treasurer, Legislature, and Governor through the State's annual budget process.
When did the new law take effect?
The new law took effect on July 1, 2006.
Who is affected?
All state-chartered depositories (banks, savings banks, savings and loan associations, and credit unions) and all licensees (residential mortgage brokers, residential mortgage lenders, correspondent residential mortgage lenders, consumer lenders, sales finance companies, debt adjusters, high cost home loan credit counselors, home repair contractors, home repair finance agencies, insurance premium finance companies, money transmitters, foreign money transmitters, motor vehicle installment sellers, check cashers and pawn brokers.)
What is changing?
Under the new law, several things will change:
- Regulated depositories and licensees will no longer pay multiple “nuisance” fees, branching fees and exam fees over the course of a year. Instead, you will receive only one bill (assessment) per year.
- All regulated licensees and depositories will now file annual reports. Previously, some licensees did not file annual reports, while others are already fulfilling this requirement. Insured depositories already fulfill this requirement through filing call reports with the
Federal Financial Institutions Examination Council (FFIEC) and limited purpose trust companies file call reports directly with the Division of Banking.
Why is the new “dedicated funding” structure good for depositories and licensees regulated by the Department?
The new dedicated funding structure means depositories and licensees will enjoy a less complicated, more predictable, and more uniform billing system. There will no longer be multiple checks written to the Division of Banking for multiple fees. Instead, one bill (an assessment) will be paid annually.
More assessment, annual report information for Depositories
More assessment, annual report information for Licensees
Electronic Annual Reports Available for All Licensees
|May 1, 2014
All Annual Reports Due
Annual Assessment Bills to be Mailed
Annual Assessments Due