Arizona Department of Financial Institutions
Authority
Created in 2004, the Arizona Department of Financial Institutions assumed the responsibilities of the State Banking Department (Laws 2004, Chapter 188). Current statutory authority is found at A.R.S. § 6-101et seq.Note: the Department of Finance is different from the Arizona Department of Financial Institutions. The Department of Finance traces back to the State Auditor, the State Department of Finance and finally to the Finance Division of the Department of Administration.Function:The Arizona Department of Financial Institutions (AZDFI) formerly known as the State Banking Department, was originally codified in 1922 and enacted into law in 2004. The purpose of the Department is to safeguard the public welfare by protecting the financial assets of the citizens of Arizona.
AZDFI is statutorily charged with licensing, supervision and regulation of state-chartered financial institutions and enterprises. The Department’s responsibility is twofold: 1) ensuring the safety and soundness of the financial services industry in Arizona, as well as compliance with state and applicable federal laws; and 2) investigating complaints filed by consumers against licensed entities and taking appropriate remedial action if the violations are substantiated.The Department is a self-supporting branch of state government and is routinely a net contributor to the State’s General Fund. Revenues are derived solely from supervision, examinations and licensing fees assessed against those financial institutions and enterprises regulated by the Department.
History
The Arizona Department of Financial Institutions (formerly known as the State Banking Department – 1922 to 2004; and before that the State Auditor – 1912 to 1968) traces back to territorial days and was established in the Howell Code, Chapter 20, Section 1, in 1864 as the Board of Territorial Auditors. The Office of the Territorial Auditor was established in 1866 and for a time included banking responsibilities.In 1912, the name of the Office of the Territorial Auditor changed to Office of the State Auditor (Article 5 of the State Constitution). The auditor operated as “the general accountant of the State, a keeper of all public account books, vouchers, documents and all papers relating to the accounts and contracts of the State and its revenue, debt and fiscal affairs.” (Annual Report, 1912, AUD 1.1)
The Bank Comptroller also worked out of the Office of the State Auditor and until 1922, the same individual often occupied both positions. The Bank Comptroller licensed building and loan societies and associations, savings banks, and bank and banking companies. In 1922, the duties of the Bank Comptroller were transferred to the newly established State Banking Department.
Laws 1968, Chapter 89 transferred powers and duties of the State Auditor relating to audit and general accounting to the Commissioner of Finance and repealed A.R.S. Title 41, Chapter 1 Article 3, relating to the State Auditor; and amended Title 35, Chapter 1, by adding Article 2.3 related to accounting for state funds. That law included an effective date of January 2, 1969 with a conditional enactment that required voter approval in order to abolish the office of the State Auditor. The statutory historical note indicates the Constitutional changes, (deleting references to the State Auditor), became effective on December 4, 1968.
Sources:
- A.R.S. § 6-101et seq.
- Session Laws – See Laws 1922, Chapter 31; Laws 1973, Chapter 32; and Laws 2004, Chapter 188
- Annual Report, 1912, AUD 1.1