Arkansas
State Bank Department
An Introduction
(updated August 9, 2007)
The State Bank Department was created by
Act 60 of 1913. The Department is charged with regulating the safety and
soundness of state chartered, bank holding companies, commercial banks,
industrial loan institutions, trust companies and Arkansas Capital Corporation,
for which it serves as primary regulator, in order to assure public confidence
in these institutions. These banks and other entities hold assets of over $33
billion.
The Department and the State Banking
Board have responsibility for the issuance of new charters, authorization of
branches, and other applications relating to ownership and structure of banks
and bank holding companies.
In order to maintain safety and
soundness of the banks and bank holding companies for which the State Bank
Department serves as primary regulator, the Department regularly conducts
examinations of these entities. These examinations include on-site evaluation
of the adequacy of capital and earnings, the quality of assets, the competency
of management (including adequacy of internal controls), the mix of
liabilities, the adequacy of liquidity, and the sensitivity to market risk of
the institution, as well as other evaluations performed by examiners. Similar
examinations are conducted of the trust companies and trust departments of
financial institutions for which the Department is primary regulator. On-site
examinations are also conducted to assess an institution's compliance with
federal consumer and community investment laws and regulations. In addition,
the Department conducts separate examinations of the information systems of
institutions under its jurisdiction to insure adequacy of the systems and
security of information.
In order to discharge their statutory
responsibilities, the State Banking Board, Bank Commissioner and bank examiners
periodically conduct investigations, hold hearings and perform allocations
necessary to discharge these responsibilities.
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