# Financial Institutions (GFI)

## Title 12. Miscellaneous Institutions and Activities

### Subtitle 7. Supervision and Examination of Tax Exempt Financial Institutions

#### Section 12-701

(a) A financial institution may apply to the Commissioner to be supervised and examined by the Commissioner to the same extent that a banking institution is supervised and examined under Title 5, Subtitle 2 of this article, other than Sec. 5-203, if:

  (1) The financial institution is a nonstock corporation under Title 5, Subtitle 2 of the Corporations and Associations Article which is recognized by the Internal Revenue Service as exempt from tax under Sec. 501(c)(3) of the Internal Revenue Code, as amended;

  (2) A majority and all controlling members of the financial institution are persons designated and approved by any banking institutions or national banking associations; and

  (3) The financial institution is engaged solely in the extension of credit, making of loans and arranging of financing for socially or economically disadvantaged businesses for the purpose of:

    (i) Encouraging and supporting the business and commercial development of such businesses; and

    (ii) Participating in and supporting special State, federal, local or private industry programs intended to make available, offer, encourage, guarantee, or otherwise facilitate loan and other financing programs for socially or economically disadvantaged businesses.

(b) The Commissioner shall supervise and examine a financial institution that has applied to the Commissioner and has met the requirements set forth under subsection (a) of this section.

#### Section 12-702

To qualify for supervision and examination, the applicant shall satisfy the Commissioner that the applicant:

(1) Is trustworthy and reputable;

(2) Has a good business reputation; and

(3) Has sufficient business experience, moral character, financial responsibility, and genuine fitness to:

  (i) Command the confidence of the public; and

  (ii) Warrant the belief that the business will be operated lawfully, honestly, fairly and efficiently.

#### Section 12-703

(a)

  (1) To apply for supervision and examination under this subtitle, an applicant shall sign and submit to the Commissioner a verified application on the form that the Commissioner requires.

  (2) The applicant shall comply with all conditions and provisions within the application.

  (3) The applicant shall submit any other information that the Commissioner may require.

(b) With the application, the applicant shall pay to the Commissioner an investigation fee of $100.00.

#### Section 12-704

Any financial institution supervised and examined under this subtitle shall be subject to the same reporting requirements as a banking institution under Title 5, Subtitle 2 of this article, other than Sec. 5-208.

#### Section 12-705

(a) If the Commissioner believes that a financial institution supervised and examined under this subtitle has engaged in an unsafe or unsound banking practice, or has failed to comply with the law, the Commissioner shall send a warning to the financial institution.

(b) If the Commissioner finds that the financial institution has continued to engage in the unsafe or unsound practice, or that the failure to comply with the law has continued, subject to the hearing provisions of Sec. 12-706 of this subtitle, the Commissioner may suspend or terminate its supervision and examination of the financial institution.

#### Section 12-706

(a) If the Commissioner takes any action under Sec. 12-705(b) of this subtitle, the Commissioner shall give the financial institution the opportunity for a hearing.

(b) Notice of the hearing shall be given and a hearing shall be held in accordance with the Administrative Procedure Act.

#### Section 12-707

Any person who is aggrieved by any decision or finding of the Commissioner under this subtitle may appeal to the circuit court for the county in which the aggrieved person resides or has a principal place of business, or, if the aggrieved person resides or has a principal place of business in Baltimore City, to the Circuit Court for Baltimore City.

#### Section 12-708

(a) The Commissioner, not more often than once per year, may impose annual assessments on each financial institution supervised and examined by the Commissioner under this subtitle, to cover the expense of supervising and examining that financial institution.

(b)

  (1) The Commissioner may assess each financial institution the sum of:

    (i) $1,000; plus

    (ii) 8 cents for each $1,000 of the assets of the financial institution over $1,000,000.

  (2) The assessments shall be based on assets stated in the financial institution's most recent financial report.

(c) The financial institution shall pay any assessment imposed under this section to the Commissioner on or before the February 1 after it is imposed.

#### Section 12-709

The Commissioner may adopt regulations to carry out the provisions of this subtitle.

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Md. Code Ann., Fin. Inst. (as displayed at mgaleg.maryland.gov, October 16, 2026)