House Bill No. 6670
House Bill No. 6670
PUBLIC ACT NO. 97-223
AN ACT CONCERNING THE FORMATION OF MUTUAL HOLDING
COMPANIES AND THE ENFORCEMENT POWER OF THE
COMMISSIONER OF BANKING WITH RESPECT TO BRANCHES
OF OUT-OF-STATE BANKS.
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statutes is repealed and the following is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deposited to be withdrawn by the owner or repaid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 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
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 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;
(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 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 [in accordance with] OR
ANY NONSTOCK CORPORATION FORMED IN CONNECTION WITH
A REORGANIZATION PURSUANT TO sections 36a-192 to
36a-199, inclusive, AS AMENDED BY THIS ACT, 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) "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;
(44) "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;
(45) "Reorganized savings bank" means any
savings bank incorporated and organized in
accordance with [subsection (a) of] section
36a-192, AS AMENDED BY SECTION 3 OF THIS ACT, AND
SECTION 36a-193, AS AMENDED BY SECTION 4 OF THIS
ACT, a majority of the ordinary voting shares of
which is owned by a mutual holding company;
(46) "Reorganized savings and loan
association" means any savings and loan
association incorporated and organized in
accordance with [subsection (b) of] section
36a-192, AS AMENDED BY SECTION 3 OF THIS ACT, AND
SECTION 36a-193, AS AMENDED BY SECTION 4 OF THIS
ACT, a majority of the ordinary voting shares of
which is owned by a mutual holding company;
(47) "Reorganized savings institution" means
any reorganized savings bank or reorganized
savings and loan association;
(48) "Representative office" has the meaning
given to that term in 12 USC Section 3101, as from
time to time amended;
(49) "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;
(50) "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;
(51) "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;
(52) "Savings and loan association" means an
institution chartered or organized under the laws
of this state as a savings and loan association;
(53) "Savings bank" means an institution
chartered or organized under the laws of this
state as a savings bank;
(54) "Savings deposit" means any deposit
other than a demand deposit or time deposit on
which interest or a dividend is paid periodically;
(55) "Savings and loan holding company" has
the meaning given to that term in 12 USC Section
1467a, as from time to time amended;
(56) "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;
(57) "State agency" has the meaning given to
that term in 12 USC Section 3101, as from time to
time amended;
(58) "State branch" has the meaning given to
that term in 12 USC Section 3101, as from time to
time amended;
(59) "Subsidiary" has the meaning given to
that term in 12 USC Section 1841(d), as from time
to time amended;
(60) "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;
(61) "Time account" means an account into
which time deposits may be made; and
(62) "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. Section 36a-190 of the general
statutes is repealed and the following is
substituted in lieu thereof:
The provisions of sections 36a-183 to
36a-187, inclusive, shall not apply to: [(a)] (1)
A transaction subject to the provisions of section
36a-105 or 36a-106, section 36a-125 or 36a-181, or
the provisions of the laws of the United States
relating to the merger or consolidation of federal
banks, [(b)] (2) the acquisition of shares
acquired in good faith in a fiduciary capacity,
[(c)] (3) the acquisition or transfer of shares of
a federal bank to the extent that the acquisition
or transfer of such shares is subject to approval
or disapproval under the laws of the United
States, [(d)] (4) the acquisition by a person who
has previously filed an acquisition statement of
less than one per cent of the voting securities of
a bank or holding company during any six-month
period, [(e)] (5) an acquisition or transfer by
operation of law or by gift, will or intestacy,
[(f)] (6) a transaction involving the acquisition
of securities if the commissioner certifies in
writing that the protection of depositors and
creditors of the bank, the securities of which are
being acquired or which is a subsidiary of the
holding company the securities of which are being
acquired, requires that the transaction proceed
without delay, or [(g)] (7) (A) the formation of a
mutual holding company or a reorganized savings
institution of such mutual holding company under
sections 36a-192, AS AMENDED BY SECTION 3 OF THIS
ACT, and 36a-193, AS AMENDED BY SECTION 4 OF THIS
ACT, INCLUDING THE ACQUISITION OF VOTING SHARES OF
A REORGANIZED SAVINGS INSTITUTION BY A NONSTOCK
CORPORATION PURSUANT TO SUBSECTION (b) OF SECTION
36a-192, AS AMENDED BY SECTION 3 OF THIS ACT, or
[to] (B) the issuance of capital stock by such
reorganized savings institution under sections
36a-195 and 36a-196, AS AMENDED BY SECTION 6 OF
THIS ACT.
Sec. 3. Section 36a-192 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) Notwithstanding any other provision of
the general statutes, any mutual savings bank OR
MUTUAL SAVINGS AND LOAN ASSOCIATION may reorganize
so as to become a mutual holding company by: (1)
[Causing] (A) IN THE CASE OF A MUTUAL SAVINGS
BANK, CAUSING a reorganized savings [bank]
INSTITUTION to be incorporated and organized as a
capital stock savings bank in accordance with
section 36a-193, AS AMENDED BY SECTION 4 OF THIS
ACT, OR (B) IN THE CASE OF A MUTUAL SAVINGS AND
LOAN ASSOCIATION, CAUSING A REORGANIZED SAVINGS
INSTITUTION TO BE INCORPORATED AND ORGANIZED AS A
CAPITAL STOCK SAVINGS AND LOAN ASSOCIATION IN
ACCORDANCE WITH SECTION 36a-193, AS AMENDED BY
SECTION 4 OF THIS ACT; and (2) transferring to the
reorganized savings [bank] INSTITUTION a
substantial part of the assets of such mutual
savings bank OR MUTUAL SAVINGS AND LOAN
ASSOCIATION and causing the reorganized savings
[bank] INSTITUTION to assume a substantial part of
the liabilities of such mutual savings bank OR
MUTUAL SAVINGS AND LOAN ASSOCIATION, including all
of its depository liabilities. Upon such transfer
and assumption, [(A)] persons who prior thereto
held depository rights with respect to or other
rights as creditors of such mutual savings bank OR
MUTUAL SAVINGS AND LOAN ASSOCIATION shall have
such rights solely with respect to the reorganized
savings [bank] INSTITUTION, and [(B)] the
corresponding liability or obligation of the
mutual savings bank OR MUTUAL SAVINGS AND LOAN
ASSOCIATION to such persons shall be assumed by
the reorganized savings [bank] INSTITUTION.
Persons who had ownership, liquidation or voting
rights with respect to the mutual savings bank OR
MUTUAL SAVINGS AND LOAN ASSOCIATION shall continue
to have such rights solely with respect to the
mutual savings bank OR MUTUAL SAVINGS AND LOAN
ASSOCIATION in its reorganized form as a mutual
holding company.
[(b) Notwithstanding any other provision of
the general statutes, any mutual savings and loan
association may reorganize so as to become a
mutual holding company by: (1) Causing a
reorganized savings and loan association to be
incorporated and organized as a capital stock
savings and loan association under section
36a-193; and (2) transferring to the reorganized
savings and loan association a substantial part of
the assets of such mutual savings and loan
association and causing the reorganized savings
and loan association to assume a substantial part
of the liabilities of such mutual savings and loan
association, including all of its depository
liabilities. Upon such transfer and assumption,
(A) persons who prior thereto held depository
rights with respect to or other rights as
creditors of such mutual savings and loan
association shall have such rights solely with
respect to the reorganized savings and loan
association and (B) the corresponding liability or
obligation of the mutual savings and loan
association to such persons shall be assumed by
the reorganized savings and loan association.
Persons who had ownership, liquidation or voting
rights with respect to the mutual savings and loan
association shall continue to have such rights
solely with respect to the mutual savings and loan
association in its reorganized form as a mutual
holding company.]
(b) (1) NOTWITHSTANDING ANY OTHER PROVISION
OF THE GENERAL STATUTES, ANY MUTUAL SAVINGS BANK
OR MUTUAL SAVINGS AND LOAN ASSOCIATION MAY
REORGANIZE SO AS TO FORM A MUTUAL HOLDING COMPANY
BY: (A) CAUSING A NONSTOCK CORPORATION TO BE
ORGANIZED UNDER THE LAWS OF THIS STATE; (B) (i) IN
THE CASE OF A MUTUAL SAVINGS BANK, CAUSING SUCH
NONSTOCK CORPORATION TO FORM A REORGANIZED SAVINGS
INSTITUTION BY ORGANIZING A CAPITAL STOCK SAVINGS
BANK IN ACCORDANCE WITH SECTION 36a-193, AS
AMENDED BY SECTION 4 OF THIS ACT, OR (ii) IN THE
CASE OF A MUTUAL SAVINGS AND LOAN ASSOCIATION,
CAUSING SUCH NONSTOCK CORPORATION TO FORM A
REORGANIZED SAVINGS INSTITUTION BY ORGANIZING A
CAPITAL STOCK SAVINGS AND LOAN ASSOCIATION IN
ACCORDANCE WITH SECTION 36a-193, AS AMENDED BY
SECTION 4 OF THIS ACT; (C) CAUSING SUCH NONSTOCK
CORPORATION TO ACQUIRE A MAJORITY OF THE ORDINARY
VOTING SHARES OF SUCH REORGANIZED SAVINGS
INSTITUTION; AND (D) MERGING THE MUTUAL SAVINGS
BANK OR MUTUAL SAVINGS AND LOAN ASSOCIATION WITH
AND INTO SUCH REORGANIZED SAVINGS INSTITUTION IN
ACCORDANCE WITH THE PROVISIONS OF SUBDIVISION (2)
OF THIS SUBSECTION AND SECTION 36a-125, EXCEPT
THAT SUBSECTIONS (e), (f) AND (i) OF SECTION
36a-125 SHALL NOT APPLY.
(2) UPON APPLICATION BY THE CONSTITUENT
BANKS, AND UPON RECEIPT OF A COPY OF THE AGREEMENT
OF MERGER, CERTIFIED BY THE SECRETARIES OF THE
CONSTITUENT BANKS AS HAVING BEEN DULY APPROVED IN
ACCORDANCE WITH SUBSECTIONS (b) AND (d) OF SECTION
36a-125, AND OF NOTIFICATION FROM THE CONSTITUENT
BANKS THAT ALL APPROVALS NEEDED FOR INSURANCE BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ITS
SUCCESSOR AGENCY HAVE BEEN OBTAINED AND THAT ANY
WAITING PERIOD PRESCRIBED BY FEDERAL LAW HAS
EXPIRED, THE COMMISSIONER SHALL DETERMINE WHETHER
THE TERMS OF THE MERGER ARE REASONABLE AND IN
ACCORDANCE WITH LAW AND SOUND PUBLIC POLICY. THE
COMMISSIONER, IF THE COMMISSIONER SO DETERMINES,
SHALL APPROVE THE MERGER. THE COMMISSIONER SHALL
NOT APPROVE THE MERGER OF THE MUTUAL SAVINGS BANK
OR MUTUAL SAVINGS AND LOAN ASSOCIATION WITH AND
INTO THE REORGANIZED SAVINGS INSTITUTION IF: (A)
THE MERGER WOULD BE UNFAIR OR PREJUDICIAL TO THE
DEPOSITORS OF THE MUTUAL SAVINGS BANK OR MUTUAL
SAVINGS AND LOAN ASSOCIATION; (B) THE INTEREST OF
THE PUBLIC WILL NOT BE SERVED BY THE MERGER; (C)
DISAPPROVAL IS NECESSARY TO PREVENT UNSAFE AND
UNSOUND BANKING PRACTICES; OR (D) THE FINANCIAL OR
MANAGERIAL RESOURCES OF THE CONSTITUENT BANKS DO
NOT WARRANT APPROVAL OF THE MERGER. AFTER APPROVAL
OF THE MERGER BY THE COMMISSIONER, A COPY OF THE
AGREEMENT AND A COPY OF THE COMMISSIONER'S
APPROVAL SHALL BE FILED IN THE OFFICE OF THE
SECRETARY OF THE STATE. UPON COMPLETION OF THE
MERGER, THE NONSTOCK CORPORATION SHALL BE A MUTUAL
HOLDING COMPANY AND PERSONS WHO HAD OWNERSHIP,
LIQUIDATION OR VOTING RIGHTS WITH RESPECT TO THE
MUTUAL SAVINGS BANK OR MUTUAL SAVINGS AND LOAN
ASSOCIATION SHALL CONTINUE TO HAVE SUCH RIGHTS
SOLELY WITH RESPECT TO SUCH MUTUAL HOLDING
COMPANY.
(c) A reorganization of a mutual savings bank
or mutual savings and loan association pursuant to
sections 36a-192 to 36a-199, inclusive, AS AMENDED
BY THIS ACT, shall be approved by two-thirds of
the governing board of the MUTUAL SAVINGS bank or
MUTUAL SAVINGS AND LOAN association. No such
approval shall be required of creditors of, or
persons having ownership, liquidation or voting
rights with respect to, a mutual savings bank. The
reorganization of a mutual savings and loan
association shall also be approved by a majority
of the depositors present and voting at a meeting
called for the purpose of considering such a
reorganization.
(d) (1) A mutual savings bank or mutual
savings and loan association proposing to
reorganize [as a mutual holding company] pursuant
to sections 36a-192 to 36a-199, inclusive, AS
AMENDED BY THIS ACT, shall provide the
commissioner with prior written notice of the
proposed reorganization. The notice shall contain
such relevant information as the commissioner may
require.
(2) Unless the commissioner disapproves the
formation of the proposed mutual holding company
within sixty days after the commissioner's receipt
of notice of the proposed reorganization or, by
written notice issued within such sixty-day period
to the mutual savings bank or mutual savings and
loan association proposing to reorganize, extends
for another thirty days the period during which
such disapproval may be issued, [such institution]
THE MUTUAL SAVINGS BANK OR MUTUAL SAVINGS AND LOAN
ASSOCIATION may proceed with such reorganization.
If the commissioner extends the period during
which such disapproval may be issued but within
such extension period does not disapprove the
proposed reorganization, [of such institution into
a mutual holding company, such institution] THE
MUTUAL SAVINGS BANK OR MUTUAL SAVINGS AND LOAN
ASSOCIATION may proceed with [the] SUCH
reorganization.
(3) The commissioner may disapprove any
proposed mutual holding company formation only if:
(A) The formation of the proposed mutual holding
company would be unfair or prejudicial to the
depositors of the [institution] MUTUAL SAVINGS
BANK OR MUTUAL SAVINGS AND LOAN ASSOCIATION
proposing to reorganize; [as a mutual holding
company;] (B) the interest of the public will not
be served by the formation of the proposed mutual
holding company; (C) such disapproval is necessary
to prevent unsafe or unsound banking practices;
(D) the financial or [management] MANAGERIAL
resources of the [institution] MUTUAL SAVINGS BANK
OR MUTUAL SAVINGS AND LOAN ASSOCIATION proposing
to reorganize [as a mutual holding company] do not
warrant approval of such proposal; or (E) the
[institution] MUTUAL SAVINGS BANK OR MUTUAL
SAVINGS AND LOAN ASSOCIATION proposing to
reorganize [as a mutual holding company] fails to
furnish any information required under subdivision
(1) of this subsection.
(4) In connection with the reorganization of
a mutual savings bank or mutual savings and loan
association into a mutual holding company UNDER
SUBSECTION (a) OF THIS SECTION, the mutual holding
company may retain assets to the extent that such
assets are not then required to be transferred to
the reorganized savings institution in order to
satisfy capital or reserve requirements of any
applicable state or federal law.
(5) Investment of the assets of [the] A
mutual holding company shall be subject to [(1)]
(A) all of the limitations not inconsistent with
sections 36a-192 to 36a-199, inclusive, AS AMENDED
BY THIS ACT, and applicable to a mutual savings
bank or mutual savings and loan association, as
the case may be, under the laws of this state; and
[(2)] (B) any limitations of federal law, in
effect from time to time, which expressly apply to
such investments when made by [(A)] (i) a mutual
savings bank or mutual savings and loan
association, or [(B)] (ii) a holding company of a
capital stock savings bank or capital stock
savings and loan association, as the case may be.
Sec. 4. Section 36a-193 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) Any reorganized savings institution,
except one organized to function solely in a
fiduciary capacity, shall commence business with a
minimum equity capital of at least five million
dollars. Any reorganized savings institution
organized to function solely in a fiduciary
capacity shall commence business with a minimum
equity capital of at least two million dollars.
Such equity capital shall be paid for in cash
before any reorganized savings institution
commences business.
(b) The mutual savings bank, [or] mutual
savings and loan association OR NONSTOCK
CORPORATION proposing to form a reorganized
savings institution shall submit an application to
the commissioner containing such information as
the commissioner shall require and shall execute,
acknowledge and file with the commissioner a
certificate of incorporation stating: (1) The name
of the reorganized savings institution; (2) the
town in which the main office is to be located and
the town's population; (3) the amount, authorized
number and par value, if any, of shares of its
capital stock; (4) the minimum amount of equity
capital with which such reorganized savings
institution shall commence business, which amount
may be less than its authorized capital but shall
not be less than that required by subsection (a)
of this section; and (5) the name, occupation, and
residence, post office or business address of each
organizer and prospective initial director of the
reorganized savings institution. The organizers
shall separately file with the commissioner a
notice of the residence of each organizer and
prospective initial director whose residence
address is not included in the proposed
certificate of incorporation.
(c) The commissioner, before approving such
application and certificate of incorporation and
issuing a certificate of authority, shall consider
whether: (1) The formation of the reorganized
savings institution would be unfair or prejudicial
to the depositors of the mutual savings bank or
mutual savings and loan association proposing,
DIRECTLY OR THROUGH A NONSTOCK CORPORATION, to
form the proposed reorganized savings institution;
[and to reorganize as a mutual holding company;]
(2) the interest of the public will be served by
the formation of the proposed reorganized savings
institution; (3) the formation of such reorganized
savings institution accords with safe and sound
banking practices; and (4) the financial and
[management] MANAGERIAL resources of the
[institution] MUTUAL SAVINGS BANK OR MUTUAL
SAVINGS AND LOAN ASSOCIATION proposing to
reorganize [as a mutual holding company] warrant
approval of such proposal.
(d) If the commissioner approves such
application and certificate of incorporation, the
commissioner shall issue two copies of a
certificate of authority to such reorganized
savings institution to commence the business of a
capital stock savings bank or capital stock
savings and loan association, as the case may be.
Such reorganized savings institution shall file
one copy of such certificate with the Secretary of
the State and shall retain one copy.
(e) No reorganized savings institution shall
commence business until its insurable accounts or
deposits are insured by the Federal Deposit
Insurance Corporation or its successor agency and
until a certificate of authority has been issued
and filed with the Secretary of the State,
provided the acceptance of subscriptions for such
deposits as may be necessary to obtain such
insurance of deposits is not considered to be
commencing business.
Sec. 5. Subsection (a) of section 36a-194 of
the general statutes is repealed and the following
is substituted in lieu thereof:
(a) Upon the reorganization of a mutual
savings bank or mutual savings and loan
association [into a mutual holding company]
PURSUANT TO SECTIONS 36a-192 TO 36a-199,
INCLUSIVE, AS AMENDED BY THIS ACT, (1) the
resulting mutual holding company [continues to]
SHALL possess and may exercise all the rights,
powers and privileges, except deposit-taking
powers, and is subject to all the limitations not
inconsistent with sections 36a-192 to 36a-199,
inclusive, AS AMENDED BY THIS ACT, of a mutual
savings bank or mutual savings and loan
association, as the case may be, under the laws of
this state, (2) the resulting mutual holding
company is subject to the limitations and
restrictions imposed on bank holding companies by
the Bank Holding Company Act of 1956, as FROM TIME
TO TIME amended, or the limitations and
restrictions imposed on unitary savings and loan
holding companies, as defined for federal purposes
by the Home Owners' Loan Act of 1933, as FROM TIME
TO TIME amended, as the case may be, but is not
authorized to exercise any rights, powers or
privileges granted pursuant to such acts that are
not also granted pursuant to sections 36a-192 to
36a-199, inclusive, AS AMENDED BY THIS ACT, and
(3) notwithstanding any other provision of law,
the provisions of the general statutes prevail
over any inconsistent provision of the certificate
of incorporation of such resulting mutual holding
company.
Sec. 6. Subsection (a) of section 36a-196 of
the general statutes is repealed and the following
is substituted in lieu thereof:
(a) Following the reorganization of any
mutual savings bank or mutual savings and loan
association [into a mutual holding company]
PURSUANT TO SECTIONS 36a-192 TO 36a-199,
INCLUSIVE, AS AMENDED BY THIS ACT, the reorganized
savings institution of such mutual holding company
shall not sell or offer to sell its common stock
or securities convertible into common stock unless
each eligible account holder of the reorganized
savings institution receives, without payment,
nontransferable subscription rights to purchase
common stock or securities convertible into common
stock, as the case may be, of the reorganized
savings institution pursuant to a subscription
offering: (1) In which every eligible account
holder may receive the right, subject to
modification in the event of an over-subscription
to the subscription offering by all eligible
account holders, to purchase up to a maximum of
one-half of one per cent of the total number of
the shares of common stock or securities
convertible into common stock, as the case may be,
being offered by the reorganized savings
institution; (2) in which every eligible account
holder, regardless of such account holder's
relationship to the reorganized savings
institution, may participate at the same time as
every other eligible account holder; and (3) which
offering shall precede any offering of the
reorganized savings institution's common stock or
securities convertible into common stock, as the
case may be, to the members of the general public.
The terms of the subscription offering may provide
that any savings account with total balances of
less than five hundred dollars, or any lesser
amount as determined by the governing board of the
reorganized savings institution, shall not
constitute a qualifying deposit for participation
in the subscription offering. Not later than
fifteen days from the date of submission to the
commissioner of a plan outlining the terms of the
subscription offering, the reorganized savings
institution shall mail by first class mail a
notice to each eligible account holder as of the
eligibility record date indicating that: (1) The
governing board of the reorganized savings
institution has approved the sale of a certain
number of shares of common stock or securities
convertible into common stock, as the case may be;
(2) such eligible account holder shall have
nontransferable rights to subscribe for shares of
the common stock or securities convertible into
common stock, as the case may be, of the
reorganized savings institution; (3) the holders
of capital stock of the reorganized savings bank
shall have exclusive voting rights; (4) the right
to subscribe to shares of common stock or
securities convertible into common stock, as the
case may be, will expire unless such rights are
exercised by the eligible account holder within
the time period specified in such notice, which
date shall not be less than sixty days from the
date of the submission to the commissioner of the
plan outlining the terms of the subscription
offering; and (5) in order to obtain further
information with respect to the subscription
offering, the eligible account holder shall
indicate such eligible account holder's interest
to the reorganized savings institution by
returning a postage prepaid expression of interest
sent by the reorganized savings institution not
later than the date set forth in the notice, which
date shall be not less than thirty days from the
date of the submission to the commissioner of the
plan outlining the terms of the subscription
offering. In mailing such notice to eligible
account holders, the reorganized savings
institution may rely upon the last-known valid
address of such account holder in its possession.
The reorganized savings institution shall have no
further obligation to forward information
regarding the conversion offering to eligible
account holders who have not returned postage
prepaid expressions of interest or responded
otherwise in writing to such notice.
Sec. 7. Subdivision (4) of subsection (a) of
section 36a-412 of the general statutes is
repealed and the following is substituted in lieu
thereof:
(4) (A) Except as provided in this section,
any branch in this state of an out-of-state bank,
other than a federally-chartered out-of-state
bank, may exercise all the powers possessed by a
Connecticut bank and the laws of this state shall
apply to such branch to the same extent as such
laws apply to a branch of a Connecticut bank, and
such out-of-state bank may not conduct any
activity at such branch that is not permissible
for a Connecticut bank. The following laws shall
not apply to such branch: Sections 36a-65, 36a-98,
36a-261, 36a-262, 36a-285 unless, at the time of
the acquisition, the acquired bank exercised the
authority granted by such section, 36a-738 and
36a-739. IF THE COMMISSIONER DETERMINES THAT A
BRANCH IN THIS STATE OF SUCH OUT-OF-STATE BANK IS
BEING OPERATED IN VIOLATION OF ANY APPLICABLE LAW
OF THIS STATE OR IN AN UNSAFE AND UNSOUND MANNER,
THE COMMISSIONER MAY TAKE ANY ENFORCEMENT ACTION
AUTHORIZED UNDER THIS TITLE AGAINST SUCH
OUT-OF-STATE BANK TO THE SAME EXTENT AS IF SUCH
BRANCH WERE A CONNECTICUT BANK, PROVIDED, THE
COMMISSIONER SHALL PROMPTLY GIVE NOTICE OF SUCH
ACTION TO THE HOME STATE BANKING REGULATOR OF SUCH
OUT-OF-STATE BANK AND, TO THE EXTENT PRACTICABLE,
SHALL CONSULT AND COOPERATE WITH SUCH REGULATOR IN
PURSUING AND RESOLVING SUCH ACTION.
(B) The laws of this state shall apply to any
branch in this state of a federally-chartered
out-of-state bank to the same extent as such laws
would apply if the branch were a federal bank. The
following laws shall apply to any branch in this
state of a federally-chartered out-of-state bank
to the same extent as such laws apply to a branch
of a Connecticut bank: (i) Community reinvestment
laws including sections 36a-30 to 36a-33,
inclusive, (ii) consumer protection laws including
sections 36a-290 to 36a-304, inclusive, 36a-306,
36a-307, 36a-315 to 36a-323, inclusive, 36a-645 to
36a-647, inclusive, 36a-690, 36a-695 to 36a-700,
inclusive, 36a-705 to 36a-707, inclusive, 36a-715
to 36a-718, inclusive, 36a-725, 36a-726, 36a-755
to 36a-759, inclusive, 36a-770 to 36a-788,
inclusive, and 36a-800 to 36a-810, inclusive,
(iii) fair lending laws including sections 36a-16,
36a-737, 36a-740 and 36a-741, and (iv) branching
laws including sections 36a-23 and 36a-145.
Sec. 8. This act shall take effect from its
passage, except that section 7 shall take effect
October 1, 1997.
Approved June 24, 1997