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Arkansas Bank Commissioner Takes on Dual Role as Securities CommissionerLock Icon

4 min read

Susannah Marshall wasn’t surprised when her role as Arkansas bank commissioner was expanded to encompass another state agency back in August. Act 475 of 2023 created the possibility of her also serving as Arkansas securities commissioner.

“Certainly when the act was passed, I felt like that was an option due to the language of the statute,” said Marshall, on the law that allowed the dual commissioner format. “I was prepared and happy to serve if the governor chose me to lead that agency as well.”

Her new duties were bestowed a month after her reappointment as bank commissioner, overseeing the regulation, supervision and examination of 73 state-chartered banks with current total assets of more than $158 billion. She was first appointed in 2020.

The Arkansas State Bank Department also supervises the bank holding companies of Arkansas state-chartered banks, state-chartered trust companies, regional and county industrial development corporations, industrial loan institutions and capital development companies.

In addition to the 80 Bank Department staffers on the third floor of the state-owned Commerce Building, Marshall also manages a Securities Department team of 30 on the fourth floor of the former Alltel/Verizon office project at 1 Commerce Way.

“Five months have flown by, and I enjoy it,” Marshall said of her new administrative charge leading the Arkansas Securities Department.

The sheer number of companies and individuals buying and selling stocks, bonds and other investments on behalf of Arkansas customers underscores the Securities Department name.

A total of 1,305 broker-dealer firms do business in the state, with 11 of those companies headquartered here. The census of licensed broker-dealer agents with Arkansas clientele numbers 156,560. “Securities is way more than securities regulation,” Marshall said of the department’s operational territory.

Also under the department’s regulatory umbrella are investment adviser firms, which deploy 3,939 representatives serving Arkansas customers. Of the 1,269 investment adviser firms conducting business in the state, 94 are based in Arkansas.

Non-depository mortgage companies fall under the oversight of the Securities Department, too.

The tally of non-bank companies that originate loans secured by Arkansas real estate stands at 583 with 32 headquartered in the state. Those mortgage lenders operate 1,803 branch offices, of which 156 are located in Arkansas.

The number of licensed loan officers making mortgages happen in the state for those companies: 6,823.

A final portion of the financial services arena regulated by the Securities Department is the expanding sector of money service firms such as Venmo, PayPal and Western Union.

Of the 197 money services ventures doing business in Arkansas only one is headquartered in the state: Tech Friends Inc. The Jonesboro enterprise provides services for a niche, captive market: commissary and bail transactions for jail and prison inmates. The company’s menu of electronic services includes handling prisoner cash deposits and debit phone calling.

All told, state financial regulators license and supervise more than 33,000 non-bank financial services companies through the Nationwide Multistate Licensing System. That roster is dominated by nondepository mortgage companies and money services businesses.

“Money services, that’s where we are going to see growth in the future, with the advantages of technology and customer demand,” Marshall said. “We want to be prepared and remain diligent of the potential risks and fraud possibilities.”

Consumer Protection

Whether unintended or criminal, mistakes on the digital landscape can have a sweeping impact through the computerized power of keystrokes.

Arkansas’ Securities Department, along with regulators in Connecticut, Maryland and Texas, led a multistate enforcement action that resulted in a $10 million fine against ACI Payments Inc., a subsidiary of ACI Worldwide of Miami.

That payout was part of a settlement announced in October regarding $2.3 billion in erroneous electronic withdrawals from the accounts of 480,000 mortgage-holders.

Those loans were serviced by Mr. Cooper, formerly known as Nationstar Mortgage LLC, whose customers used ACI’s Speedpay product to schedule payments.

The mistake, blamed on using live customer data in a test of its Speedpay platform, generated unexpected and sometimes multiple mortgage payments from customer accounts. Some of those transactions triggered overdraft or insufficient funds fees for consumers.

Looking out for financial services consumers is among the public protection responsibilities of the bank and securities departments.

On the fraud front, Marshall entered a cease-and-desist order in November to stop an ongoing international scheme threatening financial harm to Arkansans.

The order against GS Partners Global, Swiss Valorem Bank and Josip Heit, CEO, chairman of the board and control person of GS Partners, was related to the offer and sale of unregistered, fraudulent securities in the form of “MetaCertificates” tied to digital assets.

“Bad actors are beginning to develop fraudulent schemes that appear sophisticated and legitimate in light of recent technological advances,” Marshall said in a December release associated with the Securities Department action. “We are seeing an uptick in fraudulent schemes focused on recent technology trends such as the metaverse, cryptocurrencies, and digital assets.”

Full Circle

Regulating banks and securities together is a common organizational approach nationally, and the agencies in Arkansas have come full circle in their bureaucratic relationship. “We have history,” Marshall said.

In 1959, the Securities Department was established as a division of the State Bank Department. In 1971, both agencies were placed under the Department of Commerce.

In 1973, the Securities Department became autonomous from the Bank Department. In 1983, the Department of Commerce was abolished. In 2019, the Securities and Bank departments were placed under a reformed Department of Commerce. In 2023, securities was once again administratively joined with banking.

“It’s important to have that singular focus on financial services,” Marshall said. “Financial service is such an important part of any economy. We want a healthy and robust financial services industry.”

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