Substitute House Bill No. 5016

Public Act No. 00-2

An Act Concerning Bank And Credit Union Acquisitions.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 36a-2 of the general statutes is repealed and the following is substituted in lieu thereof:

As used in this title, unless the context otherwise requires:

(1) "Affiliate" of a person means any person controlling, controlled by, or under common control with, that person;

(2) "Applicant" with respect to any license or approval provision pursuant to this title means a person who applies for that license or approval;

(3) "Automated teller machine" means a stationary or mobile unattended device, including a satellite device but excluding a point of sale terminal, at which banking transactions, including, but not limited to, deposits, withdrawals, advances, payments or transfers, may be conducted;

(4) "Bank" means a Connecticut bank or a federal bank;

(5) "Bank and trust company" means an institution chartered or organized under the laws of this state as a bank and trust company;

(6) "Bank holding company" has the meaning given to that term in 12 USC Section 1841(a), as from time to time amended, except that the term "bank", as used in 12 USC Section 1841(a) includes a bank or out-of-state bank that functions solely in a trust or fiduciary capacity;

(7) "Capital stock" when used in conjunction with any bank or out-of-state bank means a bank or out-of-state bank that is authorized to accumulate funds through the issuance of its capital stock;

(8) "Club deposit" means deposits to be received at regular intervals, the whole amount deposited to be withdrawn by the owner or repaid by the bank in not more than fifteen months from the date of the first deposit, and upon which no interest or dividends need to be paid;

(9) "Commissioner" means the Commissioner of Banking [. With] and, with respect to any function of the commissioner, ["commissioner"] includes any person authorized or designated by the commissioner to carry out that function;

(10) "Company" means any corporation, joint stock company, trust, association, partnership, limited partnership, unincorporated organization, limited liability company or similar organization, but does not include (A) any corporation the majority of the shares of which are owned by the United States or by any state, or (B) any trust which by its terms must terminate within twenty-five years or not later than twenty-one years and ten months after the death of beneficiaries living on the effective date of the trust;

(11) "Connecticut bank" means a bank and trust company, savings bank or savings and loan association chartered or organized under the laws of this state;

(12) "Connecticut credit union" means a cooperative, nonprofit association, the membership of which is limited as provided in section 36a-438, as amended, which is incorporated without capital stock under the laws of this state and licensed under chapter 667 for the purposes of encouraging thrift among its members, creating a source of credit at a fair and reasonable rate of interest and providing an opportunity for its members to use and control their own money to improve their economic and social condition;

(13) "Consolidation" means a combination of two or more institutions into a new institution; [. All] all institutions party to the consolidation, other than the new institution, are "constituent" institutions; the new institution is the "resulting" institution;

(14) "Control" has the meaning given to that term in 12 USC Section 1841(a), as from time to time amended;

(15) "Customer" means any person using a service offered by a financial institution;

(16) "Demand account" means an account into which demand deposits may be made;

(17) "Demand deposit" means a deposit that is payable on demand, a deposit issued with an original maturity or required notice period of less than seven days or a deposit representing funds for which the bank does not reserve the right to require at least seven days' written notice of the intended withdrawal, but does not include any time deposit;

(18) "Deposit" means funds deposited with a depository;

(19) "Deposit account" means an account into which deposits may be made;

(20) "Depositor" includes a member of a mutual savings and loan association;

(21) "Director" means a member of the governing board of a financial institution;

(22) "Equity capital" means the excess of a Connecticut bank's total assets over its total liabilities, as defined in the instructions of the federal Financial Institutions Examination Council for consolidated reports of condition and income;

(23) "Executive officer" means every officer of a Connecticut bank who participates or has authority to participate, otherwise than in the capacity of a director, in major policy-making functions of such bank, regardless of whether such officer has an official title or whether that title contains a designation of assistant and regardless of whether such officer is serving without salary or other compensation. The president, vice president, secretary and treasurer of such bank are deemed to be executive officers, unless, by resolution of the governing board or by such bank's bylaws, any such officer is excluded from participation in major policy-making functions, otherwise than in the capacity of a director of such bank, and such officer does not actually participate in such policy-making functions;

(24) "Federal agency" has the meaning given to that term in 12 USC Section 3101, as from time to time amended;

(25) "Federal bank" means a national banking association, federal savings bank or federal savings and loan association having its principal office in this state;

(26) "Federal branch" has the meaning given to that term in 12 USC Section 3101, as from time to time amended;

(27) "Federal credit union" means any institution chartered or organized as a federal credit union pursuant to the laws of the United States having its principal office in this state;

(28) "Fiduciary" means a person undertaking to act alone or jointly with others primarily for the benefit of another or others in all matters connected with its undertaking and includes a person acting in the capacity of trustee, executor, administrator, guardian, assignee, receiver, conservator, agent, custodian under the Connecticut Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, and acting in any other similar capacity;

(29) "Financial institution" means any Connecticut bank, Connecticut credit union, or other person whose activities in this state are subject to the supervision of the commissioner, but does not include a person whose activities are subject to the supervision of the commissioner solely pursuant to chapter 672a, 672b or 672c or any combination thereof;

(30) "Foreign bank" has the meaning given to that term in 12 USC Section 3101, as from time to time amended;

(31) "Foreign country" means any country other than the United States and includes any colony, dependency or possession of any such country;

(32) "Governing board" means the group of persons vested with the management of the affairs of a financial institution irrespective of the name by which such group is designated;

(33) "Holding company" means a bank holding company or a savings and loan holding company, except, as used in sections 36a-180 to 36a-191, inclusive, "holding company" means [a bank holding company or a savings and loan holding company that controls a bank] a company that controls a bank;

(34) "Insured depository institution" has the meaning given to that term in 12 USC Section 1813, as from time to time amended;

(35) "Licensee" means any person who is licensed or required to be licensed pursuant to the applicable provisions of this title;

(36) "Loan" includes any line of credit or other extension of credit;

(37) "Merger" means the combination of one or more institutions with another which continues its corporate existence; [. All] all institutions party to the merger are "constituent" institutions; the merging institution which upon the merger continues its existence is the "resulting" institution;

(38) "Mutual" when used in conjunction with any institution that is a bank or out-of-state bank means any such institution without capital stock;

(39) "Mutual holding company" means any mutual savings bank or mutual savings and loan association reorganized or any nonstock corporation formed in connection with a reorganization pursuant to sections 36a-192 to 36a-199, inclusive, to hold a majority of the ordinary voting shares of a reorganized savings institution;

(40) "Out-of-state" includes any state other than Connecticut and any foreign country;

(41) "Out-of-state bank" means any institution that engages in the business of banking, but does not include a bank, Connecticut credit union, federal credit union or out-of-state credit union;

(42) "Out-of-state credit union" means any credit union other than a Connecticut credit union or a federal credit union;

(43) "Out-of-state trust company" means any company chartered to act as a fiduciary but does not include a company chartered under the laws of this state, a bank, an out-of-state bank, a Connecticut credit union, a federal credit union or an out-of-state credit union;

(44) "Person" means an individual, company, including a company described in subparagraphs (A) and (B) of subdivision (10) of this section, or any other legal entity, including a federal, state or municipal government or agency or any political subdivision thereof;

(45) "Point of sale terminal" means a device located in a commercial establishment at which sales transactions can be charged directly to the buyer's deposit, loan or credit account, but at which deposit transactions cannot be conducted;

(46) "Reorganized savings bank" means any savings bank incorporated and organized in accordance with sections 36a-192 and 36a-193 a majority of the ordinary voting shares of which is owned by a mutual holding company;

(47) "Reorganized savings and loan association" means any savings and loan association incorporated and organized in accordance with sections 36a-192 and 36a-193 a majority of the ordinary voting shares of which is owned by a mutual holding company;

(48) "Reorganized savings institution" means any reorganized savings bank or reorganized savings and loan association;

(49) "Representative office" has the meaning given to that term in 12 USC Section 3101, as from time to time amended;

(50) "Reserves for loan and lease losses" means the amounts reserved by a Connecticut bank against possible loan and lease losses as shown on the bank's consolidated reports of condition and income;

(51) "Satellite device" means an automated teller machine which is not part of an office of the bank, Connecticut credit union or federal credit union which has established such machine;

(52) "Savings account" means a deposit account, other than an escrow account established pursuant to section 49-2a, into which savings deposits may be made and which account must be evidenced by periodic statements delivered at least semiannually or by a passbook;

(53) "Savings and loan association" means an institution chartered or organized under the laws of this state as a savings and loan association;

(54) "Savings bank" means an institution chartered or organized under the laws of this state as a savings bank;

(55) "Savings deposit" means any deposit other than a demand deposit or time deposit on which interest or a dividend is paid periodically;

(56) "Savings and loan holding company" has the meaning given to that term in 12 USC Section 1467a, as from time to time amended;

(57) "State" means any state of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the trust territory of the Pacific Islands, the Virgin Islands and the Northern Mariana Islands;

(58) "State agency" has the meaning given to that term in 12 USC Section 3101, as from time to time amended;

(59) "State branch" has the meaning given to that term in 12 USC Section 3101, as from time to time amended;

(60) "Subsidiary" has the meaning given to that term in 12 USC Section 1841(d), as from time to time amended;

(61) "Supervisory agency" means: (A) The commissioner; (B) the Federal Deposit Insurance Corporation; (C) the Resolution Trust Corporation; (D) the Office of Thrift Supervision; (E) the National Credit Union Administration; (F) the Board of Governors of the Federal Reserve System; (G) the United States Comptroller of the Currency; and (H) any successor to any of the foregoing agencies or individuals;

(62) "Time account" means an account into which time deposits may be made; and

(63) "Time deposit" means a deposit that the depositor does not have a right and is not permitted to make withdrawals from within six days after the date of deposit, unless the deposit is subject to an early withdrawal penalty of at least seven days' simple interest on amounts withdrawn within the first six days after deposit, subject to those exceptions permissible under Title 12, Part 204 of the Code of Federal Regulations, as from time to time amended.

Sec. 2. Subsection (g) of section 36a-210 of the general statutes is repealed and the following is substituted in lieu thereof:

(g) No Connecticut bank may purchase all or a significant part of the assets and business of a federal bank, [or] a federal credit union or an out-of-state bank, and no Connecticut credit union may purchase all or a significant part of the assets and business of a federal credit union, without the approval of the commissioner. Such Connecticut bank or Connecticut credit union shall file with the commissioner an application that includes a copy of any notice, application and other information filed with any federal or state banking or credit union regulator in connection with such purchase and such additional information as may be required by the commissioner. The commissioner shall not approve such purchase if: (1) It involves the acquisition of a federal bank or out-of-state bank that has not been in existence and continuously operating for at least five years, unless the commissioner waives this requirement; or (2) the purchasing institution, including all insured depository institutions which are affiliates of such institution, upon consummation of the purchase, would control thirty per cent or more of the total amount of deposits of insured depository institutions in this state, unless the commissioner permits a greater percentage of such deposits.

Sec. 3. This act shall take effect from its passage.

Approved April 18, 2000