Feeney files bill to standardize enforcement powers and confidentiality for Division of Banks licensees

Sen. Paul R. Feeney filed legislation on Jan. 17, 2025, that would create uniform enforcement and confidentiality provisions for licensees under the jurisdiction of the Division of Banks, including new civil penalties, prohibition orders and limits on disclosure of examination records. The bill is Senate No. 750 and was filed with the Senate Docket No. 2518.

The proposal would give the Massachusetts commissioner of banks authority to impose penalties of up to $5,000 per violation, with a maximum penalty of $100,000 plus costs of investigation, for covered violations; authorize prohibition orders that can bar individuals from serving as principal employees or from applying for a license for up to 36 months; and declare certain commissioner examination records — including workpapers and investigation reports — confidential and privileged.

Why it matters: if enacted, the bill would centralize and standardize enforcement tools and confidentiality rules across several consumer-finance and licensing statutes, affecting debt collectors, third-party loan servicers, small-loan lenders, sales finance companies, premium finance agencies and entities that cash checks or money orders. The measure also clarifies when the commissioner may seek temporary cease-and-desist orders and how the courts may review commissioner findings under chapter 30A of the General Laws.

Key provisions: the bill amends multiple chapters of the General Laws to apply similar enforcement and confidentiality language across regulated activities. It inserts or revises sections to allow the commissioner to: impose civil penalties up to $5,000 per violation (capped at $100,000) and recover investigation costs; issue written notices of intention and, after notice or hearing, enter orders prohibiting persons from acting as principal employees or from obtaining licenses for up to 36 months; and issue temporary or permanent cease-and-desist orders when the public interest requires immediate action. The bill also repeatedly makes records of investigations, examination reports and workpapers "confidential and privileged communications," not subject to subpoena and not public records under the cited public-record clause.

Criminal and administrative sanctions: several sections add or preserve criminal penalties for refusal to testify or obstructing examinations — penalties range from fines up to $1,000 to imprisonment of up to 6 months or 1 year depending on the statutory context. The bill preserves existing rights of injured parties to sue for damages or restitution in court and provides that many commissioner orders are reviewable under chapter 30A.

Scope and exemptions: the bill clarifies that certain banks and federally chartered institutions remain exempt from some chapters' licensing provisions but must still comply with statutory limits on charges (for example, a subsection preserves limits on interest and fees under the referenced section 100). Comparable language and enforcement tools are added or harmonized across chapters covering debt collection and third-party loan servicing (chapter 93), small loans and related licensing (chapter 140), cashing checks or money orders (chapter 169A), sales finance (chapters 255B and 255D), premium finance agencies (chapter 255C) and related statutes (chapter 255E).

Procedure and review: the bill requires written notices setting out facts supporting proposed prohibitions, affords opportunities for hearings (with specified time frames for scheduling), and makes explicit that consent or default can result in issuance of orders. It repeats that orders and findings are subject to court review under chapter 30A and gives the commissioner discretion to share confidential examination materials with other regulators or law-enforcement agencies.

Next steps: the bill was filed with the Senate on Jan. 17, 2025. It must proceed through committee referral, hearings and votes before either chamber for any change to become law. The text does not indicate committee action, legislative debate or adoption at the time of filing.