___________________ moved that HB 1123 be amended as follows:
"
Section 6. That
§
51A-1-1
be amended to read as follows:
51A-1-1.
Any bank, branch bank, drive-in facility, bank service corporation,
limited liability
company
, or other entity by its term subject to this title, is subject to this title, except that the legality
of their organization under prior law is not affected by this title. Banks may retain their capital
structure. However
,
the director may order any bank to comply with the capitalization requirements
of this title or such additional amounts as he deems necessary upon a finding by him that the sound
conduct of banking will be jeopardized by the retention of such prior capital structure.
Section 7. That
§
51A-1-2
be amended to read as follows:
51A-1-2.
Terms used in this title mean:
51A-1-4.
Any officer, employee,
or
director
, manager, or owner
of a bank who is convicted of
violating any of the provisions of this title is disqualified from thereafter acting as an officer,
employee
,
or
director
, manager, or owner
of any bank and is liable in a civil action to such bank or
any of its stockholders
, members, or owners
for all losses sustained by reason of such violations.
Section 9. That
§
51A-2-20
be amended to read as follows:
51A-2-20.
The director shall examine any bank upon a formal application made by its board of
directors
or board of managers
, in which event, in addition to the regular fees prescribed, such bank
shall pay all actual expenses incurred in connection therewith.
Section 10. That
§
51A-2-21
be amended to read as follows:
51A-2-21. The director may order the prohibition of specific action at any stockholders' , members', or owners' meeting of any bank pending timely application for judicial determination on
any matter if
he
the director
believes that such order is necessary to protect the bank against
improper, incompetent, or careless management practices to safeguard the funds of depositors or to
prevent willful violation of this title or any
regulation
rule
adopted hereunder.
Section 11. That
§
51A-2-33
be amended to read as follows:
51A-2-33.
Before entering upon the discharge of
his
duties, each member of the commission, the
director, and all officers and employees of the division shall take an oath to keep secret all facts and
information obtained in the discharge of his official duties, except:
Section 12. That
§
51A-3-1
be amended to read as follows:
51A-3-1.
All provisions of law applicable to corporations
or limited liability companies
generally
shall be applicable to banks, except where inconsistent with this title, in which case this title shall
govern.
Section 13. That
§
51A-3-2
be amended to read as follows:
51A-3-2.
The articles of incorporation
or the articles of organization
of a bank corporation
or the
articles of organization of a bank limited liability company
shall state:
Section 14. That
§
51A-3-6
be amended to read as follows:
51A-3-6.
One-tenth of the net profit for any dividend
or distribution
period shall be carried to
the surplus fund until such fund shall amount to twenty percent of the capital stock. Any losses
sustained in excess of undivided profits may be charged to the surplus account, but no dividends
or
distributions
shall thereafter be declared or paid until the surplus fund shall amount to twenty percent
of the capital stock.
Section 15. That
§
51A-3-7
be amended to read as follows:
51A-3-7.
Any application filed pursuant to
§
51A-2-16 shall be delivered to the director together
with the original and two executed copies of the articles of incorporation
or articles of organization
.
The application shall contain such information as the director may require. The application shall be
accompanied by a deposit in an amount set by the commission. If the costs of processing the
application are less than the deposit, the excess of the deposit shall be returned to the applicant. The
director may assess the applicants for actual costs of processing the application if the actual costs
exceed the initial fee.
Section 16. That
§
51A-3-9
be amended to read as follows:
51A-3-9.
Within ninety days of the receipt of the application required in
§
51A-3-7, unless the
commission orders that a longer time is necessary, the director shall investigate and make a report
of the following:
Section 17. That
§
51A-3-12
be amended to read as follows:
51A-3-12.
If the commission approves the application, its approval shall be endorsed on the
articles of incorporation
or articles of organization
. The original shall be filed and recorded in the
Office of the Secretary of State, and a certified copy thereof shall be forthwith filed in the office of
the director. The remaining copy shall be returned to the incorporators
or managers or owners
within
twenty days of the action of the commission. If the commission disapproves an application, the
director shall so notify the incorporators
or managers or owners
within twenty days of such
disapproval, in writing, stating the reasons for such disapproval and shall return all copies of the
articles of incorporation
or articles of organization
to them.
Section 18. That
§
51A-3-14
be amended to read as follows:
51A-3-14.
The incorporators
or managers or owners
may call for the payment of subscriptions
in full upon receipt of the notice that the articles of incorporation
or articles of organization
have
been approved. The director shall issue a certificate of authority whenever it shall appear to
him
the
director
that the capital stock of such bank has been fully subscribed and paid in in money and such
bank is lawfully entitled to commence business. No bank
shall
may
transact any business, except
such as is incidental or necessarily preliminary to its organization, until such certificate of authority
has been regularly issued by the director. Such certificate of authority
shall be
is
void if the bank
named therein fails to commence business within one year from the date thereof.
Section 19. That
§
51A-3-16
be amended to read as follows:
51A-3-16. The director may approve the issuance of preferred stock, capital notes, debentures,
or other bank securities after approval of the majority of the stockholders
, members, or owners
. The
terms of issue shall set forth the voting rights available thereon and the rank or priority, if any, of
depositor or other creditor with reference to such issue in case of insolvency of the issuing bank. No
such stock, notes, debentures, or other bank securities may be issued prior to approval by the
director. Before any such issue is retired or paid, the bank shall obtain the written approval of the
director.
Section 20. That
§
51A-3-17
be amended to read as follows:
51A-3-17.
No dividends
or distributions
may be declared or paid on the capital stock of any bank
which has outstanding capital notes or debentures, or if preferred stock has been issued without prior
written approval of the director unless:
51A-3-17.1.
For the purposes of this chapter, dividends
or distributions
are any distribution of
funds made by the bank to a shareholder
, member, or owner
from current or accumulated earnings
except for fees or salaries.
Section 22. That
§
51A-3-18
be amended to read as follows:
51A-3-18.
Dividends to stockholders
, or distributions to members or owners,
may be declared
from net profits by the board of directors
or board of managers
of a bank not more than once in each
calendar quarter
provided that
if
all provisions of this title relating to the maintenance of capital
accounts have been complied with. The minutes of such a meeting shall reflect that a determination
has been made that the reserve for loan and lease losses has been adequately funded, the amount
carried to surplus, if any, the amount of dividend
or distribution
declared, the amount of net
undivided profits, if any, remaining
,
and the amount of total equity capital remaining.
Section 23. That
§
51A-3-19
be amended to read as follows:
51A-3-19.
The approval of the director is required before a dividend
or distribution
is declared
if the total of all dividends
or distributions
, including the proposed dividend
or distribution
, declared
by the directors of a bank in any calendar year exceeds the total of its net profits of that year to date
combined with its retained net profits of the preceding two years, less any required transfers to
surplus or a fund for the retirement of any preferred stock.
Section 24. That
§
51A-3-20
be amended to read as follows:
Section 25. That
§
51A-3-22
be amended to read as follows:
51A-3-22.
A bank may amend its articles of incorporation in the manner provided under chapter
47-2,
or amend its articles of organization in the manner provided under chapter 47-34
upon
amendment certified by its president, except that prior approval of the director shall be required for
a bank to: change its name or location; acquire or abandon trust powers; change the number or par
value of its shares of stock; change the amount of capital; or, extend its
corporate
existence. Such
approval must be based upon a finding that the security of existing creditors will not be impaired by
the proposed action. All such amendments shall be filed in the same manner as provided for original
articles of incorporation
or articles of organization
.
Section 26. That
§
51A-3-23
be amended to read as follows:
51A-3-23.
Within one year prior to the expiration of the period for which it was incorporated
or
organized
a bank may, with the approval of at least a majority of the capital stock of such corporation
or a majority of such limited liability company
, extend its
corporate
existence for an additional
period, not to exceed twenty years, by amending its articles of incorporation
or articles of
organization
as provided in
§
51A-3-22.
Section 27. That
§
51A-3-26
be amended to read as follows:
51A-3-26.
Any bank has a lien upon the shares of any stockholder
, member, or owner
of the bank
or any stockholder
, member, or owner
of the parent bank holding company who is indebted to it, and
for such purpose, in addition to stock duly recorded, the bank may enforce its lien against stock
actually owned by the debtor but not recorded on the transfer books. All certificates for such stock
shall have printed or stamped thereon the words: "Subject to lien for any indebtedness of holder to
bank," and such lien is not enforceable against a purchaser in good faith unless such words are
printed or stamped on such certificate.
Section 28. That
§
51A-3-30
be amended to read as follows:
51A-3-30. Every bank shall adopt a code of bylaws or organizational agreement before being authorized to commence business. Bylaws or organizational agreements , as well as all amendments or additions thereto, so adopted shall be effective only after they have been approved by the director. After their adoption and approval they shall be spread at length upon the minute book of the bank and be subject to such rights of inspection as exist for other corporate or books and records.
51A-3-32.
The board of directors
or board of managers
of every bank shall consist of not less
than five nor more than twenty-five members. At all times, at least three-fourths of the directors shall
be citizens of the United States. With the exception of the president or the chief executive officer,
the directors shall be elected by the shareholders
or members or owners
.
Section 30. That
§
51A-3-33
be amended to read as follows:
51A-3-33.
Any director may be removed by the stockholders
, members, or owners
at any regular
or special meeting, except that no director may be removed unless the votes cast against a motion
for
his
removal are less than the total number of shares
or
outstanding, divided by the number
of authorized directors, but all of the directors may be removed if a majority of the outstanding
shares approves a motion for the removal of all.
Section 31. That
§
51A-3-34
be amended to read as follows:
51A-3-34.
The board of directors
or board of managers
shall hold regular meetings at such times
as the bylaws
or organizational agreement
of the bank may prescribe. At no time may the bylaws
or
organizational agreement
provide for fewer meetings than the minimum number permitted by rule
promulgated by the commission pursuant to chapter 1-26. Any director of the bank or the director
of the Division of Banking may call a special meeting. The board of directors
, board of managers,
or an executive committee of not less than one-third of the board shall review at least monthly the
transactions occurring since the last review.
Section 32. That
§
51A-3-35
be amended to read as follows:
51A-3-35.
The officers of every bank shall be elected by the board of directors
or board of
managers
at the board meeting held in January of each year. The president or chief executive officer
shall be appointed by the elected board members to the board of directors
or board of managers
. The
officers shall hold office for one year and until their successors are elected and qualified, subject to
removal by the board at any time. Vacancies may be filled by appointment of successors by the board
of directors
or board of managers
at any regular or special meeting, to hold office until the next
regular election and until successors qualify.
Section 33. That
§
51A-3-36
be amended to read as follows:
51A-3-36.
Within ten days after the election or appointment of any officer, the board of directors
or board of managers
shall cause to be forwarded to the director the name or names of such officer
or officers together with such other information as may be required by the commission. If the
director shall refuse to confirm the election or appointment of any such officer, such office shall
immediately become vacant.
Section 34. That
§
51A-3-39
be amended to read as follows:
Section 35. That
§
51A-4-11
be amended to read as follows:
51A-4-11.
All conveyances and other instruments affecting the title to real property shall be
executed by any executive officer of the bank, or employee so designated by the board of directors
or board of managers
under the corporate seal of the bank.
Section 36. That
§
51A-5-1
be amended to read as follows:
51A-5-1.
No person may assume or use the word
,
"
trust
"
,
in such person's name in any manner
which infers or suggests that such person has authority to transact such business unless such person
is authorized to transact trust business pursuant to this title. A violation of this paragraph is a Class
2 misdemeanor.
Section 37. That
§
51A-5-4
be amended to read as follows:
51A-5-4.
Any bank empowered by its articles of incorporation
or articles of organization
to do
trust business or any trust company authorized by this title, shall, before transacting any such
business, deposit and keep on deposit with the division evidences of indebtedness acceptable to the
director which are payable to bearer or recorded in the name of the division and which constitute
readily marketable legal investments for funds held by a bank as fiduciary in the amount of one
hundred thousand dollars. Such deposit shall be for the security of the trust creditors of such bank
or trust company, and shall be in bonds or notes and mortgages on real property within this state
worth double the amount secured thereby, or insured by the Federal Housing Administration, or
bonds of the United States, or any state of the United States that has not defaulted on its principal
or interest within ten years, or any organized county or township or first or second class municipality
or school district in this state or some other state, and upon which there has been no default in
payment of interest or principal. Income from such securities shall belong to and be paid the bank
or trust company as long as it continues to conduct its business in the ordinary course and so long
as authorized by the director.
51A-5-25.
No bank
shall
may
accept or voluntarily relinquish a fiduciary account without the
approval or ratification of the board of directors
or board of managers
, or a committee of officers or
directors designated by the board for that purpose, but the board or the committee may prescribe
general rules governing acceptance or relinquishment of fiduciary accounts, and action taken by an
officer in accordance with these rules is sufficient approval.
Section 39. That
§
51A-5-26
be amended to read as follows:
51A-5-26.
The board of directors
or board of managers
shall designate one or more committees
of not less than three qualified officers or directors to supervise the investment of fiduciary funds.
No investment
shall
may
be made, retained, or disposed of without the approval of a committee. At
least once each calendar year a committee shall review all assets of each fiduciary account and shall
determine their current value, safety, and suitability and whether the investments should be modified
or retained.
Section 40. That
§
51A-5-27
be amended to read as follows:
51A-5-27.
The committees provided for in
§
§
51A-5-25 and 51A-5-26 shall keep minutes of
their meetings, and shall fully report to the board of directors
or board of managers
at least once in
each calendar quarter all action taken since their previous report.
Section 41. That
§
51A-5-29
be amended to read as follows:
51A-5-29.
Any state bank or trust company exercising trust powers may, with the approval of
the director, or the comptroller of the currency, in the case of a national bank or trust company,
establish and maintain a trust service office at any office in this state of a state or national bank, if
the establishment thereof has been approved by the board of directors
or board of managers
of the
state or national bank at a meeting called for that purpose, and by the director or comptroller.
Section 42. That
§
51A-6-6
be amended to read as follows:
51A-6-6.
All provisions of law applicable to corporations and limited liability companies
generally shall be applicable to trust companies, except where inconsistent with this chapter and the
provisions of this title, in which case this chapter and the provisions of this title shall govern.
Section 43. That
§
51A-12-8
be amended to read as follows:
51A-12-8.
The issuing officer, the chief executive
,
or managing officer and the board of directors
or board of managers
of a bank shall be held personally liable for all excessive loans, until they are
in compliance, including overdrafts which could create excess. Such liability shall remain in effect
for so long as any such loans may be in excess of the amount limited by law.
Section 44. That § 51A-14-3 be amended to read as follows:
Section 45. That
§
51A-14-4
be amended to read as follows:
51A-14-4.
Any national bank, or any federal savings association, federal savings bank, or state
savings and loan association owned by or being acquired by a bank holding company which desires
to take the necessary steps to effect dissolution as a national bank, a federal savings association, or
a federal savings bank with the federal regulatory authority having jurisdiction, or as a state savings
and loan association with the Division of Banking may make application to the commission to
reorganize as a state bank. An application for conversion to a state bank shall consist of a letter of
intent signed by a majority of the institution's board of directors together with any additional
information required by the director. The stockholders
, members, or owners
of the national bank,
federal savings association, federal savings bank, or state savings and loan association shall make,
execute, and acknowledge articles of incorporation
or articles of organization
as required by this title.
Upon receipt of an application for approval of a conversion, the director shall conduct such
investigation as he may deem necessary to ascertain whether:
Section 46. That
§
51A-15-11
be amended to read as follows:
51A-15-11. After a hearing with three days' oral or written notice to a majority of the members of the board of directors or board of managers , the director may, with the consent of a majority of the members of the commission, suspend all activities and take possession of the business and
property of a bank whenever
he
the director
finds:
51A-15-15.
When the director has taken possession
he shall be
the director is
vested with the full
and exclusive power of management and control, including the power to assess outstanding capital
stock, continue or to discontinue the business, to stop or to limit the payment of its obligations, to
employ any necessary assistants, to execute any instrument in the name of the bank, to commence,
defend, and conduct in its name any action or proceeding in which it may be a party, to terminate
his
the director's
possession by restoring the bank to its board of directors
or board of managers
and to
reorganize or liquidate the bank in accordance with this chapter. As soon as practicable after taking
possession the director shall make an inventory of the assets and file a copy thereof with the circuit
court.
Section 48. That
§
51A-15-28
be amended to read as follows:
51A-15-28.
No plan of reorganization may be prescribed under this chapter unless, in the opinion
of the director or receiver:
51A-15-37.
Within twenty days after the filing of the schedule, pursuant to subdivision
51A-15-36(3) any creditor, depositor,
or
stockholder
, member, or owner
may file with the circuit
court an objection to any determination made. Any objections so filed shall be heard and determined
by the court, upon such notice to the director or receiver and interested claimants as the court may
prescribe. If the objection is sustained the court shall direct an appropriate modification of the
schedule.
Section 50. That
§
51A-15-42
be amended to read as follows:
51A-15-42.
When the director or receiver has liquidated a bank, any assets remaining after all
claims have been paid shall be distributed to the stockholders
, members, or owners
in accordance
with their respective interests.
".