Senate advances bill to prohibit state agencies from serving as receivers for TEFIs
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Summary
SB 300 would amend the TEFI (technology-enabled fiduciary financial institutions) act to bar the Office of the State Bank Commissioner and other state agencies from serving as receivers for TEFIs, a change supporters said would protect the state from protracted receiverships.
The Senate reported SB 300 favorably after the bill sponsor described the measure as a protective change to the TEFI (technology-enabled fiduciary financial institutions) law.
Senator Dietrich explained the bill as a recommendation from the joint committee on fiduciary financial institutions oversight. The bill would "prohibit the Office of the State Bank Commissioner and any other state agency from becoming a receiver for a TEFI that might become insolvent or declare bankruptcy," the sponsor said, noting the Office of the State Bank Commissioner brought the recommendation to the committee as a way to protect the state from being appointed receiver of an entity needing a protracted wind-down.
Dietrich cited a New Mexico example where a trust company that failed in 2017 remained in receivership years later; the sponsor said TEFIs do not accept deposits and are self-funded, but the prohibition aligns with the TEFI Act's underlying allocation of risk.
The committee recommended SB 300 for passage and the Senate adopted the committee report.