Murphy files bill to standardize enforcement, confidentiality for Division of Banks licensees

Representative James M. Murphy filed legislation Jan. 16, 2025, in the Massachusetts House of Representatives that would amend multiple chapters of the General Laws to establish uniform enforcement and confidentiality provisions for licensees under the jurisdiction of the Division of Banks. The bill is entered as House Docket No. 2684 and assigned House No. 1273.

The measure would expand the Division of Banks’ authority to summon licensees, registrants, their agents and witnesses for examination and to require production of books and papers. It would also add or codify confidentiality protections for examination records and workpapers, make those records privileged and not subject to subpoena, and allow the commissioner to share information with federal, other-state or foreign regulators and law enforcement at the commissioner’s discretion.

The proposed changes span multiple existing statutes. They would: authorize civil penalties up to $5,000 per violation (with a cap of $100,000 per violation plus investigation costs); preserve or add criminal penalties (including fines up to $1,000 and imprisonment up to 6 months or 1 year in specified sections); permit temporary cease-and-desist orders when the commissioner finds imminent public harm; and allow the commissioner to issue written notices of intention to prohibit an individual from acting as a principal employee, to bar them from applying for a license for up to 36 months, or to otherwise prohibit participation in a licensed business.

The bill adds identical enforcement and confidentiality language to several statutory regimes, including provisions governing debt collectors and third-party loan servicers (chapter 93), small-loan lenders (chapter 140), sellers of checks and money orders (chapter 167F), remittance or money-transmission businesses (chapter 169 and related sections), sales finance companies and related chapters (255B, 255C, 255D), premium finance agencies (255C), and other licensing chapters referenced throughout the text. In several places the draft clarifies that records of investigations and reports of examinations—“including workpapers”—are confidential, privileged, not subject to subpoena, and not public records under the state open-records provision named in chapter 4, section 7.

Procedural details written into the bill include hearing windows and timelines: a person served with a notice of intention is given an opportunity for a hearing (the draft fixes hearings at dates no more than 30 days after a request), and in some temporary-order circumstances the commissioner may set an expedited hearing schedule (the text sets response and hearing-request windows such as 20 days or 2–30 days depending on the chapter). The bill also makes orders subject to judicial review under chapter 30A where the statute references that remedy.

The provisions carve out certain institutional exceptions already recognized in statute: nationally chartered banks, federally chartered credit unions and similar federally regulated institutions are identified in several sections as not subject to some parts of the chapters while remaining subject to limits on rates or penalties described in existing law.

Why it matters: the bill would centralize and standardize enforcement powers and record-confidentiality rules across numerous consumer-finance regulatory statutes in Massachusetts, affecting a range of businesses regulated by the Division of Banks and the consumers they serve. If enacted, it would change the enforcement tools, civil and criminal penalties, and confidentiality practices available to the commissioner and could affect how regulated entities respond to examinations and investigations.

The filing identifies Representative James M. Murphy of Weymouth as the sponsor; the draft cites a similar matter filed in the prior legislative session (House No. 1105 of 2023–2024). The bill text itself does not record committee referral, votes, or any floor action; those procedural steps are not specified in the filed draft.