Chapter 666 - Out-of-State Banks

(1) “Branch” means a domestic branch as defined in 12 USC Section 1813, as from time to time amended, except that “branch” includes any branch bank, branch office, branch agency, additional office, or any branch place of business at which fiduciary or trust powers are exercised;

(2) “Commercial activities” has the same meaning as provided in subsection (a) of section 36a-145;

(3) “Connecticut holding company” means any holding company whose home state is this state;

(4) “De novo branch” means a branch of a bank or an out-of-state bank other than a foreign bank, which:

(A) Is originally established by such bank or out-of-state bank; and

(B) Does not become a branch of such bank or out-of-state bank as the result of (i) the acquisition by the bank or out-of-state bank of an insured depository institution or a branch of an insured depository institution; or (ii) the conversion, merger or consolidation of any such institution or branch;

(5) “Home state” means: (A) With respect to a federally-chartered bank, the state in which the main office of the bank is located; (B) with respect to a foreign bank, the state which is the home state of the foreign bank under the International Bank Act of 1978, 12 USC Section 3101 et seq., as from time to time amended, if any, or the foreign country by which such bank is chartered; (C) with respect to a state-chartered bank, the state by which such bank is chartered; (D) with respect to a bank holding company, the state in which the total deposits of all banking subsidiaries of such company are the largest on the later of July 1, 1966, or the date on which the company became a bank holding company under the federal Bank Holding Company Act of 1956, 12 USC Section 1841 et seq., as from time to time amended, and in the case of any such company that holds a banking subsidiary that functions solely in a trust or fiduciary capacity, the state in which the total of such trust or fiduciary assets of such subsidiaries were the largest on the date such company became a bank holding company; and (E) with respect to a savings and loan holding company, the state in which the total deposits of all savings and loan association subsidiaries of such company were the largest on the date on which the company became a savings and loan holding company and, in the case of any such company that holds a savings and loan association subsidiary that functions solely in a trust or fiduciary capacity, the state in which the total of such trust or fiduciary assets of such subsidiaries were the largest on the date on which such company became a savings and loan holding company;

(6) “Out-of-state holding company” means any holding company whose home state is a state other than this state or whose home state is a foreign country.

(P.A. 83-411, S. 1, 20; P.A. 84-329, S. 1, 6; P.A. 87-9, S. 2, 3; 87-205, S. 3, 6; 87-589, S. 80, 87; P.A. 88-174, S. 1; P.A. 90-2, S. 1, 20; P.A. 91-357, S. 59, 78; P.A. 92-12, S. 100; P.A. 94-122, S. 185, 340; P.A. 95-155, S. 25, 29; P.A. 97-160, S. 3, 7; P.A. 05-39, S. 8; P.A. 07-14, S. 2.)

History: P.A. 84-329 amended Subsecs. (a), (b), (h) and (n) to give the defined terms the meanings in effect under 12 U.S.C. 1841(a) on June 8, 1983; (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 87-205 made technical changes in introductory language; P.A. 87-589 extended application of definitions to Sec. 42-133c; P.A. 88-174 amended the definitions of “Connecticut bank”, “Connecticut savings bank”, “Connecticut savings and loan association”, “New England bank”, “New England savings bank” and “New England savings and loan association” to include references to savings and loan holding companies; added a new Subsec. (h) defining “Connecticut savings loan holding company”; added a new Subsec. (n) defining “New England savings and loan holding company”; and added a new Subsec. (o) defining “savings and loan holding company”, relettering prior definitions as necessary; P.A. 90-2 added definitions of “Foreign bank”, “Foreign country”, “Out-of-state bank”, “Out-of-state bank holding company”, “Out-of-state savings bank”, “Out-of-state savings and loan association” and “Out-of-state savings and loan holding company”, deleted definitions of “New England bank”, “New England bank holding company”, “New England savings bank”, “New England savings and loan association” and “New England savings and loan holding company”, amended definitions of “Connecticut bank”, “Connecticut bank holding company”, “Connecticut savings bank”, “Connecticut savings and loan association” and “Connecticut savings and loan holding company” to eliminate provisions re ownership or control by Connecticut or other New England financial institutions, and made technical changes to the definitions of “Bank”, “Bank holding company”, “Control”, “Savings and loan holding company” and “Subsidiary”; P.A. 91-357 deleted reference to Sec. 42-133c as section to which definitions apply; P.A. 92-12 redesignated Subsecs. and made technical changes; P.A. 94-122 deleted definitions included in Sec. 36a-2 and added “Connecticut holding company” and “out-of-state holding company”, effective January 1, 1995; Sec. 36-552 transferred to Sec. 36a-410 in 1995; P.A. 95-155 added definitions of “branch”, “de novo branch”, and “home state”, changed reference from principal place of business to home state in definition of “Connecticut holding company”, and added reference re home state and deleted exceptions from any holding company in definition of “out-of-state holding company”, effective June 27, 1995; P.A. 97-160 redefined “branch” in Subdiv. (1) to include any branch bank, branch office, branch agency, additional office, or any branch place of business at which fiduciary or trust powers are exercised, effective June 24, 1997; P.A. 05-39 amended Subdiv. (4)(E) to provide that with respect to savings and loan holding company that holds savings and loan association subsidiaries that function solely in trust or fiduciary capacity, its home state shall be the state in which the total of trust or fiduciary assets of such subsidiaries were the largest on date such company became a savings and loan holding company, effective May 17, 2005; P.A. 07-14 added new Subdiv. (2) defining “commercial activities” and redesignated existing Subdivs. (2) to (5) as Subdivs. (3) to (6), effective May 2, 2007.

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Sec. 36a-410a. Mergers between Connecticut and out-of-state banks authorized. Interstate branching. It is the purpose of public act 95-155* to permit interstate merger transactions between banks in Connecticut and out-of-state banks prior to June 1, 1997, and to permit de novo interstate branching, in response to the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, P.L. No. 103-328, 108 Stat. 2338.

(P.A. 95-155, S. 1, 29.)

*Note: Public act 95-155 is entitled “An Act Concerning Interstate Banking and Branching”. (See Reference Table captioned “Public Acts of 1995” in Volume 16 which lists the sections amended, created or repealed by the act.)

History: P.A. 95-155 effective June 27, 1995.

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Sec. 36a-411. (Formerly Sec. 36-553). Out-of-state holding companies: Powers re interstate acquisitions and establishment of banks and Connecticut holding companies. Any out-of-state holding company may, with the approval of the commissioner, acquire and retain direct or indirect ownership or control of ten per cent or more of the voting stock of any bank, provided such bank has been in existence and continuously operating for at least five years, unless the commissioner waives this requirement, or Connecticut holding company, provided the subsidiary banks of such holding company have been in existence and continuously operating for at least five years, unless the commissioner waives this requirement or establish a bank. The commissioner may approve such acquisition or establishment only if the laws of the home state of such out-of-state holding company authorize, under conditions no more restrictive than those imposed by the laws of this state, as determined by the commissioner, a Connecticut holding company to establish or acquire and retain direct or indirect ownership or control of ten per cent or more of the voting stock of out-of-state banks or out-of-state holding companies whose home state is such state. The acquisition or establishment shall not take place if such out-of-state holding company, including all insured depository institutions which are affiliates of the out-of-state holding company, upon consummation of the acquisition or establishment, 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. Before approving any such establishment or acquisition, the commissioner shall consider whether such establishment or acquisition can reasonably be expected to produce benefits to the public and whether such benefits clearly outweigh possible adverse effects, including, but not limited to, an undue concentration of resources and decreased or unfair competition. The commissioner shall not approve such acquisition or establishment unless the commissioner considers whether: (1) The investment and lending policies of the bank to be acquired, or the proposed investment and lending policies of the bank to be established, are consistent with safe and sound banking practices and will benefit the economy of this state; (2) the services or proposed services of the bank to be acquired or established are consistent with safe and sound banking practices and will benefit the economy of this state; (3) the acquisition or establishment will not substantially lessen competition in the banking industry of this state; and (4) in the case of such establishment or an acquisition and retention of ownership or control of twenty-five per cent or more of such voting stock, the out-of-state holding company (A) has sufficient capital to ensure, and agrees to ensure, that the bank to be acquired or established will comply with applicable minimum capital requirements, and (B) has sufficient managerial resources to operate the bank to be acquired or established in a safe and sound manner. The commissioner shall not approve such acquisition or establishment unless the commissioner makes the findings required by section 36a-34. Any such establishment or acquisition by an out-of-state holding company shall be effected in accordance with the laws of this state applicable to such activities when conducted by Connecticut holding companies.

(P.A. 83-411, S. 2, 20; P.A. 88-174, S. 2; 88-224, S. 1; P.A. 89-132, S. 2, 6; P.A. 90-2, S. 2, 20; P.A. 91-189, S. 8, 13; P.A. 92-17, S. 6, 7; P.A. 93-24, S. 5, 9; 93-59, S. 7, 8; P.A. 94-122, S. 186, 340; P.A. 95-155, S. 26, 29; P.A. 96-191, S. 2, 6.)

History: P.A. 88-174 added Subsec. (b) concerning New England savings and loan holding companies; P.A. 88-224 required the commissioner to use a balancing test before approving any establishment or acquisition and to adopt regulations; P.A. 89-132 amended Subsecs. (a) and (b) to allow rather than require the commissioner to order divestiture prior to March 30, 1990, and to require the commissioner to order divestiture after March 30, 1990; P.A. 90-2 changed New England bank holding company and New England savings and loan holding company to out-of-state bank holding company and out-of-state savings and loan holding company, provided for the establishment of new Connecticut financial institutions by out-of-state bank holding companies and savings and loan holding companies on and after February 1, 1992, added certain criteria for the commissioner of banking to consider prior to approving any acquisition or establishment, added certain findings to be made by the commissioner prior to granting such approval, provided that the regulations required under Subsec. (a) apply only to establishment or acquisition by a New England bank holding company, and deleted provisions re divestiture; P.A. 91-189 required the commissioner to consider whether the proposed acquisition or establishment will not substantially lessen competition in the banking industry, added provisions re considerations to be made by the commissioner in the case of purchase and retention of ownership or control of 25% or more of the voting stock of the Connecticut institution, added provisions re regulations concerning the commissioner's findings of records of compliance with community reinvestment and consumer protection requirements and made technical changes; P.A. 92-17 added Subsec. (c); P.A. 93-24 amended Subsec. (a) by deleting provision re adoption of regulations setting specific standards for the approval of any establishment or acquisition by a New England banking holding company for out-of-state banking holding companies, effective May 4, 1993; P.A. 93-59 made technical corrections to Subsec. (c), effective May 10, 1993; P.A. 94-122 deleted the community reinvestment provisions in Subsec. (a), deleted Subsec. (b) re out-of-state savings and loan holding companies, deleted Subsec. (c) as obsolete, made interstate banking law apply to acquisitions of 10% or more of a Connecticut bank's stock by an out-of-state holding company, specified that for foreign country banks that have already entered the U.S., reciprocity applies to the bank's home state under the federal International Banking Act, deleted the requirement that reciprocity laws of other states or foreign countries be “express”, deleted the reciprocity provision for de novo establishments of in-state banks by out-of-state holding companies, and made technical changes, effective January 1, 1995; Sec. 36-553 transferred to Sec. 36a-411 in 1995; P.A. 95-155 added provisos re five-year requirement, changed references from principal place of business and place of operations to home states, added restriction re controlling deposits, changed “institution” to “bank” and made technical changes, effective June 27, 1995; P.A. 96-191 made change re commissioner approval, and made clear that five-year existence requirement did not apply to establishment of a bank, effective June 3, 1996.

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Sec. 36a-412. (Formerly Sec. 36-555). Out-of-state banks: Merger, consolidation and acquisition. De novo branches. Powers of branches. Loan production offices. Applicability of Connecticut law. Commissioner approval. (a)(1) Any out-of-state bank, whether or not owned or controlled by an out-of-state holding company, may, with the approval of the commissioner, merge or consolidate with or acquire a branch or significant part of the assets or ten per cent or more of the stock of a bank provided such bank has been in existence and continuously operating for at least five years, unless the commissioner waives this requirement, where the institution resulting from any such merger or consolidation is an out-of-state bank, provided the laws of the home state of such out-of-state bank authorize, under conditions no more restrictive than those imposed by the laws of this state as determined by the commissioner, a bank to merge or consolidate with or purchase a branch or significant part of the assets or ten per cent or more of the stock of an out-of-state bank whose home state is such state. Such merger, consolidation or acquisition shall not take place if the out-of-state bank, including all insured depository institutions which are affiliates of the out-of-state bank, upon consummation of the merger, consolidation or acquisition, 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. Any such merger, consolidation or acquisition of assets or stock shall be effected in accordance with and subject to the filing requirements and any limitations imposed by the laws of this state with respect to mergers, consolidations and acquisitions between banks. Any such out-of-state bank that engages in business in this state shall comply with the requirements of section 33-920 or subsection (a) of section 33-1210. Before approving any such merger, consolidation or acquisition, the commissioner shall make such considerations, determinations and findings as required by the laws of this state with respect to mergers, consolidations and acquisitions between banks and, in addition, shall consider whether such merger, consolidation or acquisition can reasonably be expected to produce benefits to the public and whether such benefits clearly outweigh possible adverse effects, including, but not limited to, an undue concentration of resources and decreased or unfair competition. The commissioner shall not approve such merger, consolidation or acquisition unless the commissioner considers whether: (A) The investment and lending policies of the out-of-state bank, in the case of a merger or acquisition of assets, or the proposed investment and lending policies of the bank, in the case of an acquisition of stock, or of the institution that will result from a consolidation, are consistent with safe and sound banking practices and will benefit the economy of this state; (B) the services of the bank or branch to be acquired, or of the institution that will result from a merger, or the proposed services of the institution that will result from a consolidation, are consistent with safe and sound banking practices and will benefit the economy of this state; (C) the merger, consolidation or acquisition will not substantially lessen competition in the banking industry of this state; (D) in the case of a merger or consolidation or the acquisition of twenty-five per cent or more of such stock, the out-of-state bank (i) has sufficient capital to ensure, and agrees to ensure, that the bank to be acquired or the institution that will result from the merger or consolidation will comply with applicable minimum capital requirements, and (ii) has sufficient managerial resources to operate the bank to be acquired or the institution that will result from the merger or consolidation in a safe and sound manner; and (E) the out-of-state bank is in compliance with applicable minimum capital requirements. The commissioner shall not approve such merger, consolidation or acquisition unless the commissioner makes the findings required by section 36a-34. Any out-of-state bank that merges or consolidates with or acquires a branch pursuant to this subdivision may establish additional branches in this state.

(2) Any out-of-state bank, other than a foreign bank, may, with the approval of the commissioner, and in accordance with the provisions of this subdivision, establish a de novo branch in this state. Any such establishment shall be effected in accordance with and subject to the filing requirements and any limitations imposed by section 36a-145. Any such out-of-state bank that engages in business in this state shall comply with the requirements of section 33-920 or subsection (a) of section 33-1210. Before approving any such establishment, the commissioner shall make such considerations, determinations and findings as required by section 36a-145 and, in addition, shall consider whether such establishment can reasonably be expected to produce benefits to the public and whether such benefits clearly outweigh possible adverse effects, including, but not limited to, an undue concentration of resources and decreased or unfair competition. The commissioner shall not approve such establishment unless the commissioner considers whether: (A) The investment and lending policies of the out-of-state bank are consistent with safe and sound banking practices and will benefit the economy of this state; (B) the proposed services of the branch are consistent with safe and sound banking practices and will benefit the economy of this state; (C) the establishment will not substantially lessen competition in this state; (D) the out-of-state bank is adequately managed and will continue to be adequately managed upon establishment of such branch; and (E) the out-of-state bank is in compliance with applicable minimum capital requirements. The commissioner shall not approve such establishment unless the commissioner makes the findings required by section 36a-34. An out-of-state bank which has established a de novo branch in this state in accordance with this subdivision may establish additional branches in this state.

(3) Any out-of-state bank, regardless of whether it has a branch in this state, may merge or consolidate with or acquire a branch in this state of an out-of-state bank that has a branch in this state.

(4) (A) The laws of this state, including laws regarding (i) community reinvestment pursuant to sections 36a-30 to 36a-33, inclusive; (ii) consumer protection pursuant to sections 36a-41 to 36a-45, inclusive, 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-719l, inclusive, 36a-725, 36a-726, 36a-755 to 36a-759, inclusive, 36a-770 to 36a-788, inclusive, and 36a-800 to 36a-812, inclusive; (iii) fair lending pursuant to sections 36a-737, 36a-740 and 36a-741; and (iv) establishment of interstate branches pursuant to section 36a-145 shall apply to any branch in this state of an out-of-state bank, other than a federally chartered out-of-state bank, to the same extent as such laws apply to a branch in this state of an out-of-state national banking association.

(B) An out-of-state bank, other than a federally chartered out-of-state bank, that establishes a branch in this state may conduct any activity at such branch that is permissible under the laws of the home state of such out-of-state bank, to the extent such activity is permissible either for a Connecticut bank or for a branch in this state of an out-of-state national banking association. If the commissioner determines that a branch in this state of an out-of-state bank, other than a federally chartered 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. For purposes of this subparagraph, “activity” includes acquiring or retaining any investment.

(5) Any out-of-state bank that merges or consolidates with or acquires the assets of a bank or establishes in this state a de novo branch shall be subject to the supervision and examination of the commissioner and shall make reports to the commissioner as required by the laws of this state. The commissioner may examine and supervise the Connecticut branches of any such out-of-state bank and may enter into agreements with other state or federal banking regulators or similar regulators in a foreign country concerning such examinations or supervision. Any such agreement may include provisions concerning the assessment or sharing of fees for such examination or supervision. Unless waived by the commissioner, the provisions of this section shall apply to the acquisition of the assets of any bank from the receiver of such bank by any out-of-state bank.

(6) No out-of-state bank may establish or maintain a branch in this state on the premises or property of an affiliate of such bank if the affiliate engages in commercial activities.

(b) A bank may merge or consolidate with an out-of-state bank where the resulting institution is a bank, or acquire a branch or a significant part of the assets or ten per cent or more of the stock of an out-of-state bank, in accordance with applicable law. Any such merger, consolidation or acquisition of assets or stock shall be effected in accordance with and subject to the limitations imposed by the laws of this state with respect to mergers, consolidations and acquisitions between banks. Any such bank may continue to operate as a branch the business of the out-of-state bank with which it has merged or consolidated or the assets of which it has acquired to the extent of the powers otherwise possessed by such bank. The commissioner may examine and supervise the out-of-state branches of any such Connecticut bank, and may enter into agreements with other state or federal banking regulators or similar regulators in a foreign country concerning such examinations or supervision. Any such agreement may include provisions concerning the assessment or sharing of fees for such examination or supervision.

(c) Any acquisition by a Connecticut bank of ten per cent or more of the stock of another bank or an out-of-state bank pursuant to the authority of subsection (b) of this section is not subject to any provisions of this title limiting the ownership of stock in such institutions.

(d) With the approval of the commissioner, any out-of-state bank, other than a foreign bank, may establish a loan production office in this state. The commissioner shall not approve the establishment of a loan production office under this subsection unless the commissioner has considered the out-of-state bank's record of compliance with the requirements of the Community Reinvestment Act of 1977, 12 USC 2901 et seq., as amended from time to time, and overall Community Reinvestment Act rating.

(P.A. 83-411, S. 4, 20; 83-587, S. 84, 96; P.A. 84-546, S. 92, 173; P.A. 88-224, S. 3; P.A. 90-2, S. 4, 20; P.A. 91-189, S. 10, 13; P.A. 92-12, S. 101; P.A. 93-24, S. 7, 9; P.A. 94-122, S. 187, 340; P.A. 95-155, S. 27, 29; P.A. 96-191, S. 3, 6; 96-256, S. 196, 209; P.A. 97-223, S. 7, 8; P.A. 98-58, S. 1, 3; 98-177, S. 3; P.A. 99-33, S. 1, 3; 99-158, S. 7; P.A. 01-76, S. 4, 5; P.A. 03-196, S. 7; P.A. 04-136, S. 37; P.A. 07-14, S. 3; P.A. 09-100, S. 9; P.A. 12-96, S. 30, 31; P.A. 14-89, S. 20; 14-187, S. 47; P.A. 15-235, S. 32; P.A. 22-94, S. 13.)

History: P.A. 83-587 made technical changes; P.A. 84-546 made technical changes; P.A. 88-224 required the commissioner to use a balancing test before approving any merger consolidation or acquisition and to adopt regulations; P.A. 90-2 changed New England savings bank to out-of-state savings bank, added certain criteria for the commissioner of banking to consider prior to approving any merger or consolidation with or acquisition by an out-of-state savings bank, added certain findings to be made by the commissioner prior to granting such approval, provided that the regulations required under Subsec. (a) apply only to mergers or consolidations with and acquisitions by a New England savings bank, and made certain technical changes; P.A. 91-189 required the commissioner to consider whether the proposed merger, consolidation or acquisition will not substantially lessen competition in the banking industry, added provisions re considerations to be made by the commissioner in the case of a merger or consolidation or the acquisition of 25% or more of the stock of the Connecticut institution and added provisions re regulations concerning the commissioner's findings of records of compliance with community technical changes; P.A. 92-12 made a technical change in Subsec. (d); P.A. 93-24 amended Subsec. (a) to delete provision requiring adoption of regulations setting specific standards for the approval of mergers or consolidations with acquisitions by a New England savings bank, effective May 4, 1993; P.A. 94-122 allowed out-of-state commercial banks to merge with or acquire the assets of Connecticut institutions, applied the interstate banking law to 10% acquisitions, foreign country banks, home states, express reciprocal laws, de novo establishments, deleted the community reinvestment provisions in Subsec. (a), gave the commissioner authority to examine and supervise Connecticut branches of out-of-state banks and enter agreements with other regulators re such oversight, specified that interstate banking requirements apply to an out-of-state bank's acquisition of assets of any bank from a receiver, effective January 1, 1995; Sec. 36-555 transferred to Sec. 36a-412 in 1995; P.A. 95-155 amended Subsec. (a)(1) and (b) by adding the acquisition of a branch and adding “significant part of” to the assets that may be acquired, amended Subsec. (a)(1) by adding the five-year requirement, the reference to “ten per cent or more” and provisions re controlling deposits, re Secs. 33-396 and 33-505, and re considerations, determinations and findings by the commissioner, by deleting reference to the principal place of business and certain provisions re the merger, consolidation or acquisition by an out-of-state bank, and by changing “state or foreign country” to “home state” and making technical changes re the required considerations by the commissioner, added Subsec. (a)(2) re de novo branches, added Subsec. (a)(3) re the powers of and applicability of state laws on branches, amended Subsec. (b) by deleting “in the same location” and the approval requirement re an out-of-state bank's state or country, adding authority re the commissioner's examination and supervision, deleted former Subsec. (c) re acquisition of stock of a bank, and made technical changes, effective June 27, 1995; P.A. 96-191 amended Subpara. (a)(1)(E) and added Subdiv. (a)(3) re merger, consolidation or acquisition of a branch in this state by an out-of-state bank, renumbering former Subdivs. (3) and (4) accordingly, effective June 3, 1996; P.A. 96-256 amended Subsec. (a) to replace references to Sec. 33-505 with Sec. 33-1210(a), effective January 1, 1997; P.A. 97-223 amended Subdiv. (4)(A) of Subsec. (a) by adding provisions re enforcement action taken by commissioner; P.A. 98-58 amended Subsec. (a)(2) by adding reciprocity waiver and activity restrictions applicable to branches limited to the exercise of fiduciary or trust powers, effective May 18, 1998; P.A. 98-177 made technical changes in Subsec. (a); P.A. 99-33 amended Subsec. (a)(2) by adding provisions re commissioner's finding of net new benefits, effective May 27, 1999; P.A. 99-158 amended Subsec. (a)(4) by deleting the provisions of former Subpara. (A), designating former Subpara. (B) as Subpara. (A) and making technical changes therein, and adding new Subpara. (B); P.A. 01-76 deleted Subsec. (a)(3)(A) and provisions re the commissioner's approval of a merger or consolidation of an out-of-state bank, added reference to Secs. 36a-41 to 36a-45 in Subsec. (a)(4)(A)(ii) and made a technical change in Subsec. (b), effective July 1, 2001; P.A. 03-196 amended Subsecs. (a)(5) and (b) to allow agreements entered into by commissioner to include provisions re assessment or sharing of fees for examination or supervision and, in Subsec. (a)(5), replace “The provisions of this section apply” with “Unless waived by the commissioner, the provisions of this section shall apply”, effective July 1, 2003; P.A. 04-136 amended Subsec. (a)(1) and (2) to eliminate provisions re establishment of additional branches in accordance with Sec. 36a-145, effective May 12, 2004; P.A. 07-14 added Subsec. (a)(6) prohibiting an out-of-state bank from establishing or maintaining a branch in this state on premises or property of its affiliate if affiliate engages in commercial activities, effective May 7, 2007; P.A. 09-100 amended Subsec. (a)(4)(A) by repositioning Subparas. (A)(i) to (A)(iv), substituting “interstate branches” for “branching laws” in Subpara. (A)(iv), adding federally-chartered out-of-state bank exception and replacing provision re application to branch of federal bank with provision re application to branch of out-of-state national banking association, and amended Subsec. (a)(4)(B) by making technical changes, replacing “federally-chartered out-of-state bank” with “out-of-state national banking association” re permissible activity, and providing that “activity” includes acquiring or retaining any investment, effective June 3, 2009; P.A. 12-96 amended Subsec. (a)(2) by deleting provisions re reciprocity requirement and waiver of such requirement and deleting definition of “new net benefits” and added Subsec. (d) re establishment of loan production office, effective June 8, 2012; P.A. 14-89 amended Subsec. (a)(4)(A)(ii) to add reference to Secs. 36a-719 to 36a-719l; P.A. 14-187 amended Subsec. (a)(5) to delete reference to regulations adopted by commissioner, effective June 11, 2014; P.A. 15-235 amended Subsec. (a)(4)(A)(ii) to change “36a-810” to “36a-812”, effective July 7, 2015; P.A. 22-94 amended Subsec. (d) by adding provision re the commissioner not approving the establishment of a loan production office unless the commissioner has considered the out-of-state bank's record of compliance with the Community Reinvestment Act.

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Sec. 36a-413. (Formerly Sec. 36-558). Severability. If any section contained in sections 36a-410 to 36a-412, inclusive, or any part thereof, is declared to be invalid or unenforceable by any court of competent jurisdiction, such judgment shall affect only that section or part thereof and shall not impair the validity, application or enforcement of the remaining part of the section and the other sections.

(P.A. 90-2, S. 18, 20.)

History: Sec. 36-558 transferred to Sec. 36a-413 in 1995.

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Secs. 36a-414 to 36a-424. Reserved for future use.

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PART II

FOREIGN BANKS

(A)

LIMITATIONS ON FOREIGN BANKING CORPORATIONS

Sec. 36a-425. (Formerly Sec. 36-5a). Foreign banking corporations not to do business in this state. Excepted activities. (a) Except as otherwise provided in this title, no foreign banking corporation shall transact in this state the business authorized by its certificate of incorporation or by the laws of the state under which it was organized, unless empowered to do so by any provision of the general statutes or any special act of this state; provided, without excluding other activities which may not constitute transacting business in this state, no such foreign banking corporation shall be deemed to be doing or transacting business in this state for purposes of this section by reason of its acting as an investment adviser to the State Treasurer or by reason of its making loans whether secured or unsecured. For purposes of this section, “foreign banking corporation” means a banking corporation which is organized under the laws of or has its principal office in any state other than Connecticut or any foreign country. Notwithstanding the provisions of this subsection, a foreign banking corporation which transacts business in this state for the purposes of section 33-920 or section 33-1210 shall comply with the requirements of subsection (a) of section 33-920 or subsection (a) of section 33-1210.

(b) Except as otherwise provided in this title, no foreign banking corporation, holding company, subsidiary of a holding company, or subsidiary or affiliate of a banking corporation may establish or maintain an office in this state if such office will be used to enable such corporation, holding company or subsidiary or affiliate to engage in banking business in Connecticut. If the commissioner determines that an office is being used to enable the corporation, holding company or subsidiary or affiliate to engage in banking business in Connecticut, the commissioner shall order that such office be closed or take action against such entities in accordance with section 36a-50. The establishment or maintenance of an office in this state which will not enable a foreign banking corporation, holding company, subsidiary of a holding company, or subsidiary or affiliate of a banking corporation to engage in banking business in Connecticut does not violate the provisions of subsection (a) of this section. For the purpose of this subsection, the term “banking business” shall include, but shall not be limited to, receiving deposits, paying checks, lending money and any activity which is determined by the commissioner to be so closely related to banking as to be a proper incident thereto.

(c) The provisions of subsection (b) of this section shall not apply to: (1) An office of a bank; (2) an office established or maintained for the purpose of managing or controlling a bank; (3) an office of a subsidiary of a bank, which subsidiary is limited to carrying on one or more of the functions which such bank may carry on directly in the exercise of its express or implied powers; (4) an office of a holding company or subsidiary of a holding company or banking corporation which required and which had received all requisite state and federal authorization and was open for business prior to June 1, 1984, provided such office may not engage in any activities other than those for which it had authorization and in which it was actually engaged on June 1, 1984; (5) an office established or maintained pursuant to subsection (d) of this section; (6) an office of a foreign bank that is a federal branch or a federal agency; or (7) an office of a subsidiary of a foreign bank that has a federal branch or a state branch in this state, which subsidiary is limited to carrying on one or more of the functions which such branch of such foreign bank may carry on directly.

(d) Any holding company may establish or maintain, either directly or through any subsidiary of such holding company that is not a banking corporation, and any banking corporation that is not a subsidiary of a holding company may establish or maintain, through any of its subsidiaries that are not banking corporations, one or more offices for the purpose of engaging in banking business other than to provide deposit services in this state. No office established or maintained under this subsection may be converted into an office that engages in banking business which includes providing deposit services. For purposes of this subsection, “deposit services” includes but is not limited to, deposits, withdrawals, advances, payments and transfers of funds to or from a deposit account.

(e) Any person who establishes or maintains an office or transacts business in this state in violation of this section shall be subject to the penalties imposed by subsection (d) of section 33-921.

(f) Any person may bring an action in any court of competent jurisdiction to enjoin any person from violating the provisions of this section.

(1961, P.A. 423, S. 1; 1963, P.A. 265; P.A. 77-134; P.A. 78-8, S. 2, 3; P.A. 81-124, S. 1, 2; P.A. 82-95, S. 2, 4; P.A. 83-60; 83-411, S. 9, 20; 83-587, S. 87, 96; P.A. 84-329, S. 2, 6; 84-384; P.A. 87-9, S. 2, 3; 87-205, S. 2, 5, 6; 87-589, S. 79, 87; P.A. 88-65, S. 8; P.A. 90-2, S. 6, 20; P.A. 91-189, S. 1, 13; P.A. 92-12, S. 4; P.A. 94-122, S. 188, 340; Oct. Sp. Sess. P.A. 94-1, S. 15, 21; P.A. 96-191, S. 4, 6; 96-256, S. 197, 209; 96-271, S. 205, 207, 254; P.A. 97-160, S. 4, 7; P.A. 98-177, S. 4; P.A. 01-183, S. 8, 11; P.A. 02-89, S. 78.)

History: 1963 act clarified meaning of ownership of voting capital stock for purposes of the section; P.A. 77-134 specified that corporation acting as investment advisor to state treasurer is not deemed to be doing business in state; P.A. 78-8 added Subsecs. (b) to (d) incorporating penalty provision previously in existence in Subsec. (c); P.A. 81-124 added Subsec. (e) which allows out-of-state banking corporations to make residential mortgage loans and residential construction loans in Connecticut; P.A. 82-95 amended Subsec. (b) by redefining “bank holding company” and defining “subsidiary” and “banking business”; P.A. 83-60 amended Subsec. (e) to require banks located in other states which make mortgage loans on residential real estate located in this state to conduct the closing transactions on such loans in this state; P.A. 83-411 added excepted activities from the provisions of Subsec. (b), authority for the annual establishment of two offices which do not provide deposit services and allowed any person to bring an action in court to enjoin any person from violating provisions of this section; P.A. 83-587 made technical change in Subsec. (b); P.A. 84-329 included out-of-state capital stock savings and loan associations, their holding companies, subsidiaries and affiliates in the existing prohibition against foreign corporations transacting banking business in the state and included them in the exception granting two non-deposit-taking offices per year, applied the general prohibition against foreign banking corporations, bank holding companies and their subsidiaries transacting banking business in the state to affiliates of these corporations, included mutual savings banks and mutual savings and loan associations and their subsidiaries in existing exemptions from the general prohibition, applied the two non-deposit-taking office per year exception to foreign banking corporations which are not subsidiaries of holding companies, changed the “grandfathering” date for existing offices from March 1, 1983, to June 1, 1984, clarified that foreign banking corporations making residential mortgage loans in this state will not be deemed to be transacting business in this state solely by virtue of that activity, and deleted the requirement that all such loans be closed in this state; P.A. 84-384 amended Subsec. (g) to delete the requirement that all closing transactions on residential mortgage loans secured by mortgage on residential real estate located in this state be conducted in this state; (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 87-205 added Subsec. (d)(2) re compliance with Sec. 42-133c required of holding companies and in Subsec. (g) redefined “transacting business in this state” to exclude the making of commercial mortgage loans in this state secured by real estate located in this state; P.A. 87-589 deleted Subsec. (d)(2) added by earlier act; P.A. 88-65 redefined “bank” to delete a reference to industrial bank in Subsec. (b); P.A. 90-2 amended Subsec. (a) to define the term “foreign banking corporation”, added industrial bank to the definition of the term “bank” and made a technical amendment in Subsec. (b), and expressly prohibited conversion of offices established under Subsec. (d) into offices that provide deposit services; P.A. 91-189 amended Subsec. (e) by designating the existing language as Subdiv. (1) and adding Subdiv. (2) re exceptions to certain provisions of Sec. 33-412; P.A. 92-12 made technical changes in Subsecs. (b) and (c); P.A. 94-122 allowed foreign banks to make secured or unsecured loans in Connecticut and required that they comply with laws governing foreign corporations doing business in Connecticut in Subsec. (a), deleted the requirement that foreign banks obtain commissioner's approval before opening nonbank office in Connecticut in Subsec. (b), eliminated the two-offices-per-year limit on foreign bank offices that engage in banking business other than taking deposits in Subsec. (d), deleted Subsec. (g) re mortgage loans secured by real estate in Connecticut, and made technical changes, effective January 1, 1995; Oct. Sp. Sess. P.A. 94-1 made technical changes in Subsecs. (a) and (b) and added Subsec. (c)(6) excluding from the prohibitions in Subsec. (b) an office of a subsidiary of a foreign bank that has elected this state as its home state under the International Banking Act of 1978, and has a federal branch or state branch in this state, “which subsidiary is limited to carrying on one or more of the functions which such branch of such foreign bank may carry on directly”, effective January 1, 1995; Sec. 36-5a transferred to Sec. 36a-425 in 1995; P.A. 96-191 substituted “establish or maintain” for “establish and maintain” re offices, and inserted new Subdiv. (c)(6) re foreign banks, renumbering former Subdiv. as Subdiv. (7), effective June 3, 1996; P.A. 96-256 amended Subsec. (a) to replace reference to Sec. 33-505 with Sec. 33-1210(a), effective January 1, 1997; P.A. 96-271 amended Subsec. (a) to replace reference to Sec. 33-396 with Sec. 33-920 and amended Subsec. (e)(1) to replace reference to “subsections (c) and (e) of section 33-412” with “subsection (d) of section 33-921” and (e)(2) to replace reference to “subsections (a) and (d) of section 33-412” with “subsections (a), (b) and (c) of section 33-921”, effective January 1, 1997; P.A. 97-160 amended Subsec. (c)(6) and (7) by deleting requirement for home state election under the International Banking Act of 1978, effective June 24, 1997; P.A. 98-177 made technical changes in Subsec. (a); P.A. 01-183 amended Subsec. (d) by deleting provisions re application to and approval of the commissioner, effective July 6, 2001; P.A. 02-89 deleted Subsec. (e)(2) re applicability of Subsecs. (a), (b) and (c) of Sec. 33-921 to any foreign banking corporation maintaining an office or transacting business in this state prior to May 31, 1991, and re effect of said Subdiv. on any action pending on said date.

Annotations to former section 36-5a:

Question whether foreign corporation is transacting business so as to require a certificate of authority determined by complete factual picture: Situs of the contract, presence of offices, officers and agents and extent of business activities in Connecticut. 176 C. 185.

Transacting business “within the state” within the meaning of statute discussed. 2 CA 81.

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Sec. 36a-426. (Formerly Sec. 36-5g). Foreign banking corporations authorized to bring certain actions in the courts of this state. A foreign banking corporation, as defined in subsection (a) of section 36a-425, which has made or makes any loan or has granted or grants an extension of credit to one or more persons or entities located in Connecticut shall be deemed to be a person having a usual place of business in this state for purposes of subsection (c) of section 33-411 in any action brought by such foreign banking corporation against a debtor or other person or entity arising out of such loan or extension of credit provided at least one party against whom the action is brought is otherwise subject to the jurisdiction of the courts of this state.

(June 29 Sp. Sess. P.A. 92-1, S. 1, 2; P.A. 93-31, S. 1, 2; P.A. 94-122, S. 189, 340.)

History: P.A. 93-31 deleted the reference to April 15, 1993, as cut off date for loans to which section applies, effective April 15, 1993; P.A. 94-122 deleted “before, on or after July 14, 1992”, effective January 1, 1995; Sec. 36-5g transferred to Sec. 36a-426 in 1995.

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Sec. 36a-427. Reserved for future use.

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(B)*

STATE BRANCHES, STATE AGENCIES AND
REPRESENTATIVE OFFICES OF FOREIGN BANKS

*See Sec. 12-217u re tax credit for financial institutions constructing new facilities and creating new jobs.

See Sec. 32-462 re limitation on the amount of financial assistance which may be awarded without specific approval by the General Assembly and the exception for awards funded or to be funded by bonds authorized to be issued before July 1, 1994.

Sec. 36a-428. Foreign banks authorized to establish and maintain state branches and state agencies, subject to the regulations and orders of the commissioner. License requirements. A foreign bank may establish and maintain in this state one or more state branches upon receipt of a license for each such branch from the commissioner at the location specified in such license. A foreign bank may establish and maintain in this state one or more state agencies upon receipt of a license for each such agency from the commissioner at the location specified in such license. Such licensed foreign bank shall be deemed to transact business or conduct affairs in this state for the purposes of section 33-920 or subsection (a) of section 33-1210 and shall comply with the requirements of said sections. In establishing and maintaining a state branch or state agency, a foreign bank shall be subject to such regulations and orders as the commissioner considers appropriate to carry out the purposes of sections 36a-428 to 36a-428l, inclusive.

(Oct. Sp. Sess. P.A. 94-1, S. 1, 21; P.A. 96-109, S. 5; 96-256, S. 198, 209; 96-271, S. 208, 254; P.A. 97-160, S. 5, 7.)

History: Oct. Sp. Sess. P.A. 94-1, S. 1, effective January 1, 1995; P.A. 96-109 deleted reference to Secs. 36a-2, 36a-145 and 36a-425; P.A. 96-256 replaced reference to Sec. 33-505 with 33-1210(a), effective January 1, 1997; P.A. 96-271 replaced reference to Sec. 33-396 with Sec. 33-920, effective January 1, 1997; P.A. 97-160 deleted requirement for home state election under the International Banking Act of 1978, effective June 24, 1997.

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Sec. 36a-428a. Application for license to establish and maintain state branch or state agency. Application form, supporting documents, fee. Investigation by commissioner and issuance of license. Display of license. License may not be transferred or assigned. (a) Application for a license to establish and maintain a state branch or state agency in this state shall be made on forms prescribed by the commissioner and shall be duly executed in duplicate by the foreign bank by one or more of its principal officers. Such application shall state the value of the assets of such bank as of the end of its most recent fiscal quarter, which shall be at least one million dollars in excess of its liabilities. Such application shall be accompanied by a copy of the charter or articles of incorporation of the foreign bank, and the bylaws, or their equivalents, and all amendments thereto, duly authenticated by the proper officer of such foreign bank. Each applicant for a license to establish and maintain a state branch or state agency in this state shall pay to the commissioner, at the time of application, a nonrefundable license fee of two thousand dollars.

(b) Upon the filing of the required application and license fee, the commissioner shall investigate the facts and may issue a license after the commissioner considers the effects of the proposed state branch or state agency on competition, the financial and managerial resources and future prospects of the applicant foreign bank and the proposed state branch or state agency, the public convenience and advantage that will be promoted, and the net new benefits to this state. As used in this subsection, “net new benefits” means (1) initial capital investments, including any new construction, (2) job creation plans, including, but not limited to, the number of jobs to be created and the average wage rates for each category of such jobs, (3) the potential for increasing state and municipal tax revenues from increased economic activity and increased employment, (4) consumer and business services and other benefits to the state, local community and citizens, and (5) such other matters as the commissioner may deem necessary or advisable.

(c) Any license issued pursuant to this section shall be conspicuously displayed in the place of business specified therein. Such license shall not be transferable or assignable.

(Oct. Sp. Sess. P.A. 94-1, S. 2, 21; P.A. 99-33, S. 2, 3.)

History: Oct. Sp. Sess. P.A. 94-1, S. 2, effective January 1, 1995; P.A. 99-33 redefined “net new benefits”, effective May 27, 1999.

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Sec. 36a-428b. Operation of foreign bank at state branch or state agency, rights, privileges, duties, restrictions, etc., exceptions. Deposit insurance from FDIC not required. Not subject to certain statutory provisions, when. Assessment for expenses of commissioner's office. (a) Except as otherwise specifically provided in sections 36a-428 to 36a-428l, inclusive, or in regulations or orders adopted by the commissioner under said sections, operations of a foreign bank at a state branch or state agency in this state shall be conducted with the same rights and privileges as a Connecticut bank at the same location and shall be subject to all the same duties, restrictions, penalties, liabilities, conditions and limitations that would apply under the laws of this state to the operations of a Connecticut bank doing business at the same location.

(b) Nothing in this section shall subject either of the following to the duties, restrictions, penalties, liabilities or limitations that apply to a Connecticut bank: (1) A foreign bank's director or officer interlocks with affiliates or with out-of-state financial institutions or (2) a foreign bank's operations and activities that are conducted outside this state and that do not involve the assets or the employees of a state branch or state agency in this state or of a Connecticut bank. For purposes of this section, “operations and activities that are conducted outside this state” includes decisions and activities of the foreign bank relating to matters of general corporate governance, including: (1) Issuance of stock; (2) shareholder rights; (3) declaration of dividends; (4) appointment or removal of directors and officers; (5) extensions of credit to directors, officers, principal shareholders or their related interests as provided in 12 CFR Part 215 as from time to time amended; (6) investment decisions on behalf of the foreign bank; and (7) mergers, consolidations, acquisitions, tender offers and sales of assets.

(c) No state branch or state agency in this state shall be required to obtain deposit insurance from the Federal Deposit Insurance Corporation.

(d) A state branch or state agency that does not hold insured deposits or does not otherwise engage in domestic retail deposit activities requiring deposit insurance protection, as determined by the Federal Deposit Insurance Corporation in accordance with 12 USC 3104 as amended from time to time, or the business of consumer lending in this state shall not be subject to the provisions of sections 36a-30 to 36a-34, inclusive, 36a-304 and 36a-316 to 36a-323, inclusive.

(e) For purposes of section 36a-65 the commissioner shall annually, on or after July first for the fiscal year commencing on said July first, assess each foreign bank that has established a state branch or state agency in this state, taking into consideration (1) the assets of such foreign bank relative to the assets of other foreign banks with a state branch or state agency in this state provided only the assets of the state branches or state agencies located in this state shall be considered, (2) the cost of any examination under section 36a-428l, (3) the amount allocated to each Connecticut bank and each Connecticut credit union under section 36a-65, and (4) any other factor the commissioner deems appropriate to the administration of sections 36a-428 to 36a-428n, inclusive, as amended.

(Oct. Sp. Sess. P.A. 94-1, S. 3, 21; P.A. 96-109, S. 6; P.A. 00-61, S. 1, 9.)

History: Oct. Sp. Sess. P.A. 94-1, S. 3, effective January 1, 1995 (Revisor's note: References in Subsec. (d) to repealed sections 36-129 and 36-180 were deleted editorially by the Revisors); P.A. 96-109 deleted reference to Secs. 36a-2, 36a-145 and 36a-425 in Subsec. (a); P.A. 00-61 amended Subsec. (e) by adding provisions re assessment of foreign bank that has established state branch or state agency, effective July 1, 2000.

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Sec. 36a-428c. Deposit of assets by foreign bank. Holding of currency or other assets in relation to liabilities. Unusual and extraordinary circumstances; deposit of assets with banks designated by commissioner. (a) Upon and after establishing a state branch or state agency in this state, a foreign bank licensed pursuant to section 36a-428a shall keep on deposit, in accordance with regulations adopted by the commissioner, with such banks as such foreign bank may designate and the commissioner may approve, dollar deposits or such other assets, including securities, as the commissioner shall by regulation permit. The commissioner may from time to time require that the assets deposited pursuant to this subsection be maintained by the foreign bank in such amount, and in such form and subject to such conditions as the commissioner deems necessary or desirable for the maintenance of a sound financial condition, the protection of depositors and the public interest, and to maintain confidence in the business of each such branch or agency.

(b) Such foreign bank shall hold in this state currency, or such assets as the commissioner shall by regulation permit, in an amount which shall bear such relationship as the commissioner shall by regulation prescribe to liabilities of such foreign bank. As used in this subsection, “liabilities” means liabilities appearing in the books, accounts or records of a foreign bank's state agencies and state branches in this state as liabilities of such agencies and branches, including acceptances and such other liabilities as the commissioner shall determine but excluding amounts due and other liabilities to other offices, agencies or branches of, and affiliates of such foreign bank. For purposes of this subsection, the commissioner (1) shall value marketable securities at principal amount or market value, whichever is lower, (2) may determine the value of any nonmarketable bond, note, debenture, draft, bill of exchange, other evidence of indebtedness, or of any other asset or obligation held by or owed to the foreign bank or its agency, agencies, branch or branches within this state, and (3) in determining the ratio of assets to liabilities, may exclude in whole or in part any particular asset. If, by reason of the existence or potential occurrence of unusual and extraordinary circumstances, the commissioner deems it necessary or desirable for the maintenance of a sound financial condition, the protection of depositors, creditors and the public interest, and to maintain public confidence in the business of any state agency or state branch of a foreign bank in this state, the commissioner may, subject to such terms and conditions as the commissioner may prescribe, require such foreign bank to deposit the assets required to be held in this state pursuant to this subsection with such banks as the commissioner may designate.

(Oct. Sp. Sess. P.A. 94-1, S. 4, 21; P.A. 96-191, S. 5, 6.)

History: Oct. Sp. Sess. P.A. 94-1, S. 4, effective January 1, 1995; P.A. 96-191 amended Subsec. (b) to substitute “state agencies and state branches” for “state agencies or state branches”, effective June 3, 1996.

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Sec. 36a-428d. Certification of paid-in capital stock, surplus fund and undivided profits; limitation or restriction. (a) Before establishing a state branch or state agency in this state, and annually thereafter, a foreign bank licensed under section 36a-428a shall certify to the commissioner the amount of its paid-in capital stock, its surplus fund and its undivided profits, each expressed in the currency of the country of its incorporation. The dollar equivalent of such amount, as determined by the commissioner, shall be deemed to be the amount of its capital stock, surplus fund and undivided profits.

(b) Any limitation or restriction based on the capital stock or surplus of a Connecticut bank shall be deemed to refer, as applied to a state branch or state agency in this state, to the dollar equivalent of the capital stock and surplus of the foreign bank, and if the foreign bank has more than one such branch or agency, the business transacted by all such branches and agencies shall be aggregated in determining compliance with the limitation or restriction.

(Oct. Sp. Sess. P.A. 94-1, S. 5, 21.)

History: Oct. Sp. Sess. P.A. 94-1, S. 5, effective January 1, 1995.

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Sec. 36a-428e. Conversion of state agency to state branch, state branch to state agency, and federal branch or federal agency to state branch or state agency. The commissioner may, subject to such regulations as the commissioner may adopt, authorize (1) the conversion of a state agency in this state to a state branch in this state or the conversion of a state branch in this state to a state agency in this state, and (2) the conversion of a federal branch or a federal agency in this state to a state branch or state agency in this state.

(Oct. Sp. Sess. P.A. 94-1, S. 6, 21.)

History: Oct. Sp. Sess. P.A. 94-1, S. 6, effective January 1, 1995.

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Sec. 36a-428f. Prior notice by foreign bank of change in its place of business, its corporate name and the business it proposes to do in this state. Any foreign bank licensed to establish and maintain a state branch or state agency in this state shall file prior notice with the commissioner of any change to (1) its place of business from the place designated in its license to another place in this state; (2) its corporate name if such change has been effected under the laws of the jurisdiction of its incorporation; and (3) the business which it proposes to do in this state.

(Oct. Sp. Sess. P.A. 94-1, S. 7, 21; P.A. 05-39, S. 9.)

History: Oct. Sp. Sess. P.A. 94-1, S. 7, effective January 1, 1995; P.A. 05-39 substituted requirement that foreign banks file prior notice with the commissioner of any change to its place of business, its corporate name and the business it proposes to do in this state, in lieu of applying to commissioner for approval for any such change, eliminated $400 investigation fee and made technical changes, effective May 17, 2005.

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Sec. 36a-428g. Representative office; licensing requirements; application; fee; renewal; content of license; investigation of facts by commissioner. Foreign bank subject to regulations and orders of commissioner. (a) No person shall establish or maintain a representative office in this state on behalf of one or more foreign banks unless the foreign bank to be represented has first obtained a license from the commissioner. The application for such license shall be in writing under oath and shall contain the information required by and be in the form prescribed by the commissioner. Each applicant for a license shall pay to the commissioner at the time of application a nonrefundable fee of four hundred dollars. Each license issued pursuant to this section shall expire at the close of business on June thirtieth of each year, unless such license is renewed. Each licensee shall, on or before June twentieth of each year, pay to the commissioner a license fee of four hundred dollars for the succeeding year, commencing July first. No abatement of the license fee shall be made if the license is surrendered, cancelled, revoked or suspended prior to the expiration of the period for which it was issued. The license shall not be transferable or assignable. Each license issued under this section shall state the address or addresses at which a representative office is to be located and shall state fully the name of the licensee. In the event the location of the representative office is changed, the licensee shall immediately notify the commissioner who shall thereupon without charge attach to the license an amendment certificate setting forth such changed location.

(b) Upon the filing of the required application and license fee, the commissioner shall investigate the facts and may issue a license if the commissioner finds (1) the foreign bank is of good character and sound financial standing; (2) the management of the foreign bank and the proposed management of the representative office are adequate; and (3) the convenience and needs of persons to be served by the proposed representative office will be promoted.

(c) In establishing and maintaining a representative office, a foreign bank shall be subject to such regulations and orders as the commissioner considers appropriate to carry out the purposes of sections 36a-428 to 36a-428l, inclusive. Such foreign bank shall be deemed to transact business or conduct affairs in this state for the purposes of section 33-920 or subsection (a) of section 33-1210 and shall comply with the requirements of said sections.

(Oct. Sp. Sess. P.A. 94-1, S. 8, 21; P.A. 96-109, S. 7; 96-256, S. 199, 209; 96-271, S. 209, 254.)

History: Oct. Sp. Sess. P.A. 94-1, S. 8, effective January 1, 1995; P.A. 96-109 deleted reference to Secs. 36a-2, 36a-145 and 36a-425 in Subsec. (c); P.A. 96-256 amended Subsec. (c) to replace reference to Sec. 33-505 with Sec. 33-1210(a), effective January 1, 1997; P.A. 96-271 amended Subsec. (c) to replace reference to Sec. 33-396 with Sec. 33-920, effective January 1, 1997.

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Sec. 36a-428h. Books, accounts and records to be maintained and available at state branch, state agency or representative office. Reports to commissioner. (a) Each foreign bank licensed to maintain a state branch, state agency or representative office in this state shall maintain or make available at such branch, agency or representative office appropriate books, accounts and records (1) reflecting all transactions effected by or on behalf of the branch, agency or representative office, (2) reflecting all actions taken in this state by employees of the foreign bank located in this state to effect transactions on behalf of any office of such foreign bank located outside this state and (3) relating to any other matters concerning the branch, agency or representative office that the commissioner may require.

(b) The commissioner may require such regular or special reports as the commissioner deems necessary for the proper supervision of licensees. Such additional reports shall be in the form prescribed by the commissioner and shall be subscribed and affirmed as true under the penalties of perjury.

(Oct. Sp. Sess. P.A. 94-1, S. 9, 21.)

History: Oct. Sp. Sess. P.A. 94-1, S. 9, effective January 1, 1995.

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Sec. 36a-428i. Notice of acquisition of control or merger of foreign bank. (a) A foreign bank licensed to maintain a state branch, state agency or representative office in this state shall file with the commissioner a notice, in such form and containing such information as the commissioner may prescribe, no later than fourteen calendar days after such foreign bank becomes aware of any acquisition of control of such bank or merges with another foreign bank.

(b) For purposes of this section, “control” means that any person or entity, or group of persons or entities acting in concert, directly or indirectly, owns, controls or holds with power to vote, twenty-five per cent or more of any class of voting stock of such foreign bank, or has the ability in any manner to elect a majority of the directors of such foreign bank, or otherwise exercises a controlling influence, as determined by the commissioner, over the management and policies of such foreign bank.

(Oct. Sp. Sess. P.A. 94-1, S. 10, 21.)

History: Oct. Sp. Sess. P.A. 94-1, S. 10, effective January 1, 1995.

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Sec. 36a-428j. Revocation, suspension or refusal to renew license to maintain state branch, state agency or representative office. A license issued to a foreign bank to maintain a state branch, state agency or representative office in this state shall be revoked when voluntarily surrendered by such licensee or when such foreign bank is dissolved or its authority or existence is otherwise terminated or cancelled in the country of its organization. The commissioner may suspend, revoke or refuse to renew any license issued to a foreign bank in accordance with the provisions of section 36a-51 for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-428 to 36a-428l, inclusive, or if the commissioner finds that the licensee or any director, officer, partner, controlling shareholder, trustee, employee, agent or representative of such foreign bank has: (1) Made any material misstatement in the application or (2) violated or failed to comply with any of the provisions of this title applicable to such licensee or any of the regulations or orders of the commissioner made pursuant to said sections.

(Oct. Sp. Sess. P.A. 94-1, S. 11, 21; P.A. 96-109, S. 8.)

History: Oct. Sp. Sess. P.A. 94-1, S. 11, effective January 1, 1995; P.A. 96-109 deleted reference to Secs. 36a-2, 36a-145 and 36a-425.

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Sec. 36a-428k. Voluntary liquidation of business and property of state branches and state agencies. (a) Any foreign bank which (1) has been licensed to establish and maintain a state branch or state agency in this state the assets of which in this state exceed the liabilities of its state branches or state agencies in this state, including any such foreign bank whose license has expired or been surrendered or revoked, and (2) intends to cease transacting the business of any of its state branches or state agencies in this state, shall commence proceedings for the voluntary liquidation of the business and property in this state of such state branches or state agencies, provided, no such proceedings shall be commenced while the commissioner is in possession of such business and property in this state unless such foreign bank shall have first received the written approval of the commissioner. In any such liquidation, the claims of creditors of such foreign bank arising out of transactions entered into by such creditors with the foreign bank's state branches or state agencies in this state shall be accorded the same preference accorded to similar claims in a liquidation under section 36a-428n.

(b) To effect such a voluntary liquidation, a foreign bank shall file with the commissioner a written notice of its intention to liquidate together with a plan of liquidation. The notice shall specify the date of commencement of the liquidation, and on or before such date such foreign bank shall cease to transact business at such state branches or agencies.

(c) The commissioner may approve the plan and issue an order prescribing the notice to be given to (1) creditors whose claims arise out of transactions with such branches or agencies, and (2) owners of personal property in the custody or possession of such branches or agencies, to present their claims for payment.

(d) When such foreign bank has given the notice prescribed by the commissioner under subsection (c) of this section, it shall proceed with the liquidation in accordance with the plan. Upon completion of the liquidation, such foreign bank shall make a verified statement from its books of the names of all creditors and owners of personal property described in subsection (c) of this section who have not claimed or have not received the amounts due them, and shall file such statement with the commissioner together with all identifying information, including, in the case of unclaimed proceeds of any sale of personal property, a list of the articles sold, the prices obtained therefor and the amount deducted and retained from the proceeds. Such foreign bank shall thereupon pay such unclaimed amounts to the commissioner as trustee for the persons entitled to receive them.

(e) If the commissioner shall at any time find that any of the reasons enumerated in section 36a-428n for taking possession of the business and property in this state of a foreign bank exists, the commissioner may take possession of the business and property in this state of such foreign bank in accordance with section 36a-428n, notwithstanding that such foreign bank may have previously commenced proceedings for voluntary liquidation under this section. As used in this section, “business and property in this state” has the same meaning as provided in subsection (a) of section 36a-428n.

(P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; Oct. Sp. Sess. P.A. 94-1, S. 12, 21; P.A. 95-220, S. 4–6; P.A. 97-160, S. 6, 7; P.A. 14-122, S. 159.)

History: Oct. Sp. Sess. P.A. 94-1, S. 12, effective January 1, 1995. (Revisor's note: P.A. 88-230, P.A. 90-98 and P.A. 93-142 authorized substitution of “judicial district of Hartford” for “judicial district of Hartford-New Britain” in the public and special acts of 1994 regular and special sessions, effective September 1, 1996); P.A. 95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 97-160 amended Subsec. (a) to require written approval of commissioner for liquidation proceeding when commissioner is in possession of business and property and to add provisions re preferences for claims of creditors, amended Subsec. (e) to authorize the commissioner to take possession of business and property in accordance with Sec. 36a-428n for any reasons enumerated in Sec. 36a-428n, to redefine “business and property in this state”, and to delete former provisions re taking possession of business and property, and deleted former Subsec. (f) re application for show cause order, effective June 24, 1997; P.A. 14-122 made a technical change in Subsec. (e).

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Sec. 36a-428l. Investigation and examination concerning foreign bank licensed to maintain state branch, state agency or representative office. Commissioner's powers; duties of foreign bank; cost of examination; penalties. (a) The commissioner may make such public or private investigations or examinations within or outside this state, concerning any foreign bank licensed to maintain a state branch, state agency or representative office in this state, as the commissioner deems necessary to carry out the duties of the commissioner relating to such branch, agency or representative office.

(b) For the purpose of any investigation, examination or proceeding under sections 36a-428 to 36a-428l, inclusive, the commissioner may administer oaths and affirmations, subpoena witnesses, compel attendance of witnesses, take evidence, require written statements and require the production of any records relating to the activities of such branch, agency or representative office as the commissioner deems relevant or material. The commissioner may require that certified copies of any such records be provided to the commissioner at the commissioner's office.

(c) The foreign bank which is the subject of any such investigation, examination or proceeding shall (1) make its records relating to the activities of such branch, agency or representative office available to the commissioner in readable form; (2) provide necessary personnel and equipment, including, but not limited to, assistance in the analysis of computer-generated records; (3) provide copies or computer printouts of records when so requested; (4) furnish unrestricted access to all areas of its principal place of business in Connecticut or wherever the applicable records may be located; and (5) otherwise cooperate with the commissioner.

(d) The superior court for the judicial district of Hartford, upon application of the commissioner, may issue to any person refusing to obey a subpoena issued pursuant to subsection (b) of this section an order requiring that person to appear before the commissioner or any officer designated by the commissioner to produce records so ordered or to give evidence concerning the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt of court.

(e) A foreign bank licensed to maintain a state branch, state agency or representative office in this state shall pay to the commissioner the actual cost of any examination of the licensee, as such cost is determined by the commissioner. Failure by the licensee to pay such cost within thirty days of receipt of demand from the commissioner shall automatically suspend the license until the costs are paid.

(f) As used in this section, “records” includes, but is not limited to, books, papers, correspondence, memoranda, agreements, diaries, logs, notes, ledgers, journals, visual, audio, magnetic or electronic recordings, computer printouts and software, and any other documents.

(g) The provisions of section 36a-17 shall not apply to a foreign bank licensed to maintain a state branch, state agency or representative office in this state.

(P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; Oct. Sp. Sess. P.A. 94-1, S. 13, 21; P.A. 95-220, S. 4–6; P.A. 96-109, S. 9.)

History: Oct. Sp. Sess. P.A. 94-1, S. 13, effective January 1, 1995. (Revisor's note: P.A. 88-230, P.A. 90-98 and P.A. 93-142 authorized substitution of “judicial district of Hartford” for “judicial district of Hartford-New Britain” in the public and special acts of the 1994 regular and special sessions, effective September 1, 1996); P.A. 95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 96-109 deleted reference to Secs. 36a-2, 36a-145 and 36a-425 in Subsec. (b).

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Sec. 36a-428m. Certain public officials and state employees barred from employment with Swiss Bank prior to January 1, 1996. Section 36a-428m is repealed, effective October 1, 2002.

(Oct. Sp. Sess. P.A. 94-1, S. 20, 21; S.A. 02-12, S. 1.)

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Sec. 36a-428n. Involuntary liquidation of business and property of foreign banks having a state branch or state agency. (a) As used in this section:

(1) “Branch or agency net payment entitlement” means, with respect to a qualified financial contract, the amount, if any, that would have been owed by a party to a foreign bank after netting only those transactions entered into by the branch or agency of the foreign bank in this state and such party under such qualified financial contract.

(2) “Branch or agency net payment obligation” means, with respect to a qualified financial contract, the amount, if any, that would have been owed by the foreign bank to a party after netting only those transactions entered into by the branch or agency of the foreign bank in this state and such party under such qualified financial contract.

(3) “Business and property in this state” includes, but is not limited to, all property of the foreign bank, real, personal or mixed, whether tangible or intangible, (A) wherever situated, constituting part of the business of the state agency or state branch of the foreign bank in this state and appearing on its books as such, and (B) situated within this state whether or not constituting part of the business of such state agency or state branch in this state or so appearing on its books.

(4) “Global net payment entitlement” means the amount, if any, owed by a party or that would be owed if the relevant agreements provided for payments to either party, upon termination thereof under any and all circumstances, to the foreign bank as a whole after giving effect to the netting provisions of a qualified financial contract with respect to all transactions subject to netting under such qualified financial contract.

(5) “Global net payment obligation” means the amount, if any, owed by the foreign bank as a whole to a party after giving effect to the netting provisions of a qualified financial contract with respect to all transactions subject to netting under such qualified financial contract.

(6) “Qualified financial contract” means any securities contract, commodity contract, forward contract including any spot and forward foreign exchange, repurchase agreement, swap agreement, and any similar agreement, any option to enter into any such agreement, including any combination of the foregoing, and any master agreement for such agreements. Such master agreement, together with all supplements thereto, shall be treated as one qualified financial contract, provided, such contract, option or agreement, or combination of contracts, options or agreements is reflected in the books, accounts or records of the foreign bank or a party provides documentary evidence of such agreement. The commissioner may by regulation or order determine any other agreement to be a qualified financial contract.

(b) The commissioner may, by order, immediately take possession of the business and property in this state of any foreign bank with a state branch or state agency in this state upon the commissioner's determination that such action is necessary for the protection of the interests of the creditors of such foreign bank's business in this state or for the protection of the public interest, and that such foreign bank: (1) Has violated any applicable law, regulation or order; (2) is conducting its business in an unauthorized or unsafe manner; (3) is in an unsafe or unsound condition to transact its business; (4) cannot with safety and expediency continue business; (5) has ceased to operate its state branch or state agency in this state; (6) has an impairment of its capital; (7) has suspended payment of its obligations, made an assignment for the benefit of its creditors, or admitted in writing its inability to pay its debts as they become due; (8) has neglected, refused or failed to take or continue proceedings for voluntary liquidation in accordance with section 36a-428k; (9) is insolvent in that it has ceased to pay its debts in the ordinary course of business, cannot pay its debts as they become due, or has liabilities exceeding its assets; (10) has applied for an adjudication of bankruptcy, reorganization, arrangement, or other relief under any bankruptcy, reorganization, insolvency or moratorium law, or, that any person has applied for any such relief under any such law against the foreign bank, and the foreign bank has by any affirmative act approved of or consented to such action or such relief has been granted; (11) is no longer in existence or its authority to transact banking business under the laws of the place where it is domiciled has been suspended or terminated; (12) is in liquidation, receivership or conservatorship at its domicile or elsewhere, or that any proceeding for appointment of a liquidator, receiver or conservator or any similar proceeding has been initiated against it, or there is reason to doubt its ability or willingness to pay in full the claims of creditors; (13) has otherwise had its license revoked, suspended, cancelled, terminated or otherwise not renewed pursuant to the provisions of section 36a-428j; or (14) is in a condition, or facts or circumstances relating to such foreign bank exist, which, if existing at the time such foreign bank applied for its license to establish a state branch or state agency in this state, would have been grounds for denying such application.

(c) Title to such business and property in this state of a foreign bank shall vest by operation of law in the commissioner and his successors upon taking possession, without the execution of any instruments of conveyance, assignment, transfer or endorsement. The commissioner shall promptly apply to the superior court for the judicial district of Hartford for appointment as receiver of such foreign bank with effect from the time of taking possession, and the superior court shall make such appointment. Thereafter, except as otherwise provided in this section, the commissioner shall liquidate or otherwise deal with such business and property in this state of a foreign bank in accordance with the provisions of sections 36a-221a and 36a-223 to 36a-239, inclusive, provided, (1) “debts”, “liabilities”, “deposits”, “claims” and other similar terms used in sections 36a-221a and 36a-223 to 36a-239, inclusive, refer to the claims that the commissioner shall accept pursuant to subsection (e) of this section; (2) “creditors” and “depositors”, as used in said sections, refer to the owners of such accepted claims; (3) except as the context otherwise requires, “Connecticut bank”, as used in said sections, refers to the state branches or state agencies in this state; and (4) “officer”, as used in said sections, includes any person in charge of or who is an officer of such state branches and the agent or other person in charge of such state agencies. Notwithstanding any contrary provision of law, including chapters 55a and 67, the commissioner may employ or contract with such legal counsel and expert assistants under such titles as the commissioner may assign to them and may retain such of the officers or employees of such foreign bank as the commissioner deems necessary in the liquidation and distribution of the assets of such foreign bank, without the prior approval of any other state agency or elective officers. The commissioner shall be entitled to the appointment of a single judge to supervise the liquidation upon request to the administrative judge of the superior court for the judicial district of Hartford. Said judge shall have the power to order expedited or simplified procedures whenever necessary to resolve a matter in such liquidation.

(d) At any time within ten days after the commissioner has taken possession of the business and property in this state of a foreign bank, such foreign bank may apply to the superior court for the judicial district of Hartford for an order requiring the commissioner to show cause why the commissioner should not be enjoined from continuing such possession. The court may, upon good cause shown, direct the commissioner to refrain from further proceedings and to surrender such possession.

(e) (1) The only claims that the commissioner shall accept for payment out of such business and property in this state of a foreign bank as provided in this section are claims of creditors of such foreign bank arising out of transactions entered into by such creditors with its state branches or state agencies in this state that still exist as liabilities of such state branches and state agencies as shown in the books and records of such state branches and state agencies at the time the commissioner takes possession of the business and property of the foreign bank. Acceptance or rejection of such claims by the commissioner shall not prejudice such creditors' rights to otherwise share in the assets of such foreign bank. The following claims shall not be accepted by the commissioner for payment out of such business and property in this state of a foreign bank: (A) Claims which would not represent an enforceable legal obligation against such state branch or state agency if such branch or agency were a separate and independent legal entity; and (B) amounts due and other liabilities to other offices, agencies, branches and affiliates of such foreign bank. All wages actually owing to the employees of a foreign bank in the possession of the commissioner for services rendered within three months prior to the date when possession was taken, not exceeding two thousand dollars to each employee, shall be paid prior to the payment of every other debt or claim, and in the discretion of the commissioner may be paid as soon as practicable after taking possession, except that at all times the commissioner shall reserve such funds as will in the commissioner's opinion be sufficient for the expenses of administration.

(2) Nothing in this section shall be construed to adversely affect a valid lien or perfected security interest of a federal reserve bank or the United States Department of the Treasury in the business and property in this state of a foreign bank.

(f) Whenever the accepted claims, together with interest thereon, and the expenses of the liquidation have been paid in full or properly provided for, the commissioner, upon the order of the superior court for the judicial district of Hartford, shall pay, from the remaining assets, other offices of the foreign bank that are being liquidated in the United States, upon the request of the liquidators of such offices, in amounts which the liquidators of such offices demonstrate to the commissioner are needed to pay the claims accepted by such liquidators and any expenses incurred by such liquidators in liquidating such offices of the foreign bank. After such payments, if any, have been made, the commissioner shall turn over any remaining assets of the foreign bank to the principal office of such foreign bank, or to the duly appointed domiciliary liquidator or receiver of such foreign bank.

(g) After taking possession of the business and property in this state of any foreign bank: (1) The commissioner shall immediately give notice of such fact to all persons known to the commissioner to hold any assets of such foreign bank. No person having notice or knowledge that the commissioner has taken possession of the business and property in this state of such foreign bank, shall have a lien or charge for any payment, advance or clearance thereafter made against any of the assets of such foreign bank for liability thereafter incurred. (2) Upon the written demand of the commissioner, any person holding assets of such foreign bank shall deliver such assets to the commissioner and shall thereupon be discharged from liability with respect to any claim upon such assets, provided, such demand shall not affect the right of a secured creditor with a perfected security interest, or other valid lien or security interest enforceable against third parties, to retain collateral, including any right of such secured creditor under any security arrangement related to a qualified financial contract to retain collateral and apply such collateral in accordance with this section. Nothing in this section shall affect any right of set-off permitted under applicable law, provided, no person may set off the business and property in this state of a foreign bank against liabilities of such foreign bank other than those that arise out of transactions entered into by such person with the state branch or state agency of the foreign bank in this state, which liabilities shall be deemed to include in the case of qualified financial contracts the lesser of the two amounts calculated with respect to any such qualified financial contract pursuant to subdivision (2) of subsection (i) of this section.

(h) (1) The commissioner shall, after taking possession of the business and property in this state of a foreign bank, cause to be mailed or sent to each person claiming to be, or appearing upon the books of such foreign bank to be (A) the owner of any personal property in the custody or possession of such foreign bank as bailee or depositary for hire or otherwise, including securities, whether held in custody directly or in book-entry form by such foreign bank, its nominee, subcustodian, clearing corporation or similar entity, and the contents of any safe, vault or box opened for nonpayment of rental in accordance with the provisions of this subsection, or (B) the lessee of any safe, vault or box, a notice in writing sent by registered mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, to such person at such person's last address as it appears on the books of such foreign bank or at such person's last-known address if no address appears on such books, notifying such person to remove all such property or the contents of any such safe, vault or box, within a period stated in such notice, which period shall be not less than sixty days from the date of such notice, and further notifying such person of the terms and provisions of this subsection and any regulations that may be adopted under this section by the commissioner pursuant to chapter 54. The contract of bailment or of deposit for hire, or the lease of such safe, vault or box, if any, between the person to whom such notice is mailed and such foreign bank shall terminate upon the date for removal fixed in such notice. Such person shall have a claim against such foreign bank for the amount of unearned rent or charges, if any, paid by such person from the date fixed in such notice if the property or contents are removed on or before such date, or from the date of actual removal if the property or contents are removed after such date.

(2) If such property or contents are not removed, and all accrued rental or storage and other charges, if any, are not paid, within the time fixed by such notice, the commissioner shall inventory and deal with such property and contents in accordance with any regulations that may be adopted under this section by the commissioner pursuant to chapter 54. The commissioner shall deal with such property and contents at the expense and risk of the person in whose name it stands. The commissioner shall be held harmless and shall not be liable to any subsequent claimant for any delivery or transfer made by the commissioner in good faith to the claimant appearing to be entitled to such property from the records available to the commissioner. If the commissioner is in doubt concerning the person entitled to property in the possession of the commissioner, or there are conflicting claims thereto, the commissioner may require of the claimant an order of the superior court of the judicial district of Hartford authorizing and directing the delivery of such property.

(3) After the expiration of one year from the date of mailing the notice required by subdivision (1) of this subsection, the commissioner may apply to the superior court for the judicial district of Hartford for an order authorizing the commissioner to sell, destroy or otherwise dispose of any personal property which had been in the custody or possession of such foreign bank as bailee or depositary for hire or otherwise and which remains in the possession of the commissioner. The court may require that the commissioner provide notice to the person in whose name such property stands and to any other person claiming or appearing to have an interest therein, by publication, mailing or in such other manner as the court may prescribe. Whenever the commissioner is given the power to sell such property, such power to sell shall be deemed a power to sell in satisfaction of a lien for nonpayment of accrued rental or storage charges and all other charges and expenses paid or incurred to the date of sale with respect to such property. Such power to sell, destroy or otherwise dispose of, when authorized pursuant to this subsection or any regulations that may be adopted under this section by the commissioner pursuant to chapter 54, shall be deemed to include the power to sell, destroy or otherwise dispose of any bonds, stock certificates, promissory notes, choses in action or other securities, and any other tangible or intangible property contained in any package, regardless of whether or not it shall appear from such securities or properties that the person in whose name the package stands possesses title to or interest in such securities or other properties or the power to transfer such title or interest, and any sale of such securities or properties pursuant to this subsection shall vest good title thereto in the purchaser thereof.

(4) The provisions of this subsection shall not (A) affect or preclude any other remedy, by civil action or otherwise, for the enforcement of the claims or rights of the commissioner or of such foreign bank against the person in whose name any property, or any safe, vault, box, package, parcel or receptacle stands, or (B) affect or bar the right of the commissioner or the foreign bank to recover, before sale, any debt or claim due the commissioner or such foreign bank, or, after sale, the portion of the debt or claim that was not paid by the proceeds of the sale.

(i) (1) Except as otherwise provided in this subsection, after taking possession of the business and property in this state of a foreign bank, the commissioner may assume or repudiate any contract, including an unexpired lease, of such foreign bank, relating to the business and property in this state of such foreign bank and to which such foreign bank is a party, the performance of which the commissioner determines to be burdensome and the repudiation of which the commissioner determines will promote the orderly administration of the foreign bank's affairs in this state. After the expiration of ninety days from the date that the commissioner takes possession, any party to a contract with the foreign bank relating to the business and property in this state of such foreign bank may demand in writing that the commissioner assume or repudiate such contract. If the commissioner has not assumed or repudiated the contract within fifteen days from the date of receipt of the demand, the affected party may bring an action in the superior court for the judicial district of Hartford to obtain an order requiring the commissioner to decide whether to assume or repudiate such contract. If the commissioner has not assumed or repudiated a contract not later than one month before the last date for filing claims against such foreign bank established pursuant to section 36a-225, such contract shall be deemed repudiated. Notwithstanding the provisions of this subdivision, with respect to an unexpired lease of the foreign bank for the rental of real property under which the foreign bank was a lessee, if the commissioner remains in possession of the leasehold, the commissioner shall not be required to assume or repudiate such lease and may continue in possession of such leasehold for the remainder of the term of the lease in accordance with the terms of the lease, provided, if the commissioner later repudiates the lease before the end of the lease term, any amounts that may be due the lessor as a result of such repudiation shall be calculated according to the provisions of subparagraph (A) of subdivision (3) of this subsection. Notwithstanding any contrary provision of this subsection, in liquidating a state branch or state agency of a foreign bank in this state, the commissioner shall not assume or repudiate any qualified financial contract that such state branch or state agency entered into which is subject to a multibranch netting agreement or arrangement that provides for netting present or future payment obligations or payment entitlements, including termination or closeout values relating to the obligations or entitlements, among the parties to the contract, agreement or arrangement, and the commissioner shall not be required to assume or repudiate any other qualified financial contract that such state branch or state agency entered into, provided, upon any repudiation of any qualified financial contract or the termination or liquidation of any qualified financial contract in accordance with its terms, the liability under such qualified financial contract shall be determined in accordance with subparagraph (B) of subdivision (2) of this subsection.

(2) (A) Except as otherwise provided in this subsection, upon the repudiation or termination of any contract pursuant to subdivision (1) of this subsection, liability shall be limited to the actual direct compensatory damages of the parties to the contract, determined as of the date the commissioner took possession. The commissioner shall not be liable for any future wages, other than reasonable severance payments, or for payments for future services, costs of cover, any consequential, punitive or exemplary damages, damages for lost profits or lost opportunity, or any other damages except as allowed by this subparagraph.

(B) Except as otherwise provided in this subsection, the liability of the commissioner upon the repudiation of any qualified financial contract, or in connection with the termination or liquidation of any qualified financial contract in accordance with the terms thereof, shall be limited as provided in subparagraph (A) of this subdivision, except that compensatory damages shall be deemed to include normal and reasonable costs of cover or other reasonable measures of damages utilized among participants in the market for qualified financial contract claims, calculated as of the date of repudiation or the date of the termination of such qualified financial contract in accordance with its terms. Upon the repudiation of any qualified financial contract or in connection with the termination or liquidation of any qualified financial contract in accordance with the terms thereof, if the commissioner is entitled to damages, such damages shall be paid by the party to the commissioner upon written demand pursuant to subdivision (2) of subsection (g) of this section, notwithstanding any provision in any such contract that purports to effect a forfeiture of such damages.

(C) In the case of the liquidation of a state branch or state agency of a foreign bank by the commissioner, with respect to qualified financial contracts subject to netting agreements or arrangements that provide for netting present or future payment obligations or payment entitlements, including termination or closeout values relating to the obligations or entitlements, among the parties to the contracts and agreements or arrangements, the liability of the commissioner to any party to any such qualified financial contract upon repudiation or in connection with the termination or liquidation of such qualified financial contract in accordance with the terms thereof, shall be calculated as of the date of repudiation or the date of the termination of such qualified financial contract in accordance with its terms and shall be limited to the lesser of (i) the global net payment obligation or (ii) the branch or agency net payment obligation. The liability of the commissioner under this subparagraph shall be reduced by any amount otherwise paid to or received by the party in respect of the global net payment obligation pursuant to such qualified financial contract which, if added to the liability of the commissioner under this subdivision, would exceed the global net payment obligation. The liability of the commissioner under this subparagraph to a party to a qualified financial contract also shall be reduced by the fair market value or the amount of any proceeds of collateral that secures and has been applied to satisfy the obligations of the foreign bank to the party pursuant to such qualified financial contract. In the event that netting under any applicable netting agreement or arrangement results in a branch or agency net payment entitlement, notwithstanding any provision in any such contract that purports to effect a forfeiture of such entitlement, the commissioner may make written demand upon the party to such contract under subdivision (2) of subsection (g) of this section for an amount not to exceed the lesser of the global net payment entitlement or the branch or agency net payment entitlement. The liability of the party under this subparagraph shall be reduced by any amount otherwise paid to or received by the commissioner or any other liquidator or receiver of the foreign bank with respect to the global net payment entitlement pursuant to such qualified financial contract which, if added to the liability of the party under this subparagraph, would exceed the global net payment entitlement. The liability of the party under this subparagraph to the commissioner pursuant to such qualified financial contract shall also be reduced by the fair market value or the amount of any proceeds of collateral that secures and has been applied to satisfy the obligations of the party to the foreign bank pursuant to such qualified financial contract.

(D) A party to a qualified financial contract with a foreign bank whose state branch or state agency the commissioner is liquidating, which party has a perfected security interest in collateral or other valid lien or security interest in collateral enforceable against third parties pursuant to a security arrangement related to such qualified financial contract, may retain all such collateral and upon repudiation of that qualified financial contract, or in connection with the termination or liquidation of that qualified financial contract in accordance with its terms, apply such collateral in satisfaction of any claims secured by the collateral, provided the total amount so applied to such claims shall not exceed the global net payment obligation, if any.

(3) (A) If the commissioner repudiates a lease of the foreign bank for the rental of real or personal property under which the foreign bank was a lessee, the lessor under such lease shall be entitled to file a claim with the commissioner for whichever is the least of: (i) The amount designated as liquidated damages contained in the agreement between the foreign bank and the lessor, (ii) an amount equal to one year's rent under the terms of the repudiated lease, or (iii) an amount equal to the rent for the remaining term of the lease.

(B) If the commissioner repudiates a lease of the foreign bank for the rental of real property under which the foreign bank was a lessor, and the lessee was not in default at the time of repudiation, the lessee under such repudiated lease may either (i) treat the lease as terminated by such repudiation and vacate the premises, or (ii) remain in possession of the leasehold interest for the balance of the term of the lease, and for any renewal or extension of such term that is enforceable by such lessee under applicable law other than any law relating to insolvency, unless the lessee defaults under the terms of the lease after the date of such repudiation. If the lessee remains in possession of the leasehold interest, the lessee shall continue to pay to the commissioner the contractual rent pursuant to the terms of the lease after the date of the repudiation of such lease and may offset against such rent payment any damages which may accrue due to the nonperformance of any obligation of the foreign bank under the lease after the date of repudiation. The commissioner shall not be liable to the lessee for any damages arising after such date as a result of the repudiation other than the amount of any offset allowed under this subdivision. Nothing in this subsection shall prohibit the commissioner from entering into a new contract with the lessee for the rental of the leasehold which was the subject of the repudiated lease.

(4) Except as otherwise provided in this subsection, notwithstanding any provision in an unexpired lease or other contract and notwithstanding any applicable law to the contrary, a contract or unexpired lease of the foreign bank that is subject to assumption or repudiation by the commissioner under this subsection may not be terminated or modified by any party other than the commissioner without the concurrence of the commissioner. Any right or obligation under such contract or lease may not be terminated or modified, at any time after the commissioner takes possession, solely pursuant to a provision in such contract or lease that is conditioned on (A) the commissioner taking possession, or (B) the insolvency, financial condition or liquidation of the foreign bank.

(5) Nothing in this subsection shall affect the right of a party to a contract of a foreign bank to seek performance of such contract or damages thereon in any other jurisdiction, provided, the commissioner shall not be liable for the performance of such contract or damages thereon in any other jurisdiction.

(6) The rights granted in this subsection are in addition to any other rights available to the commissioner under any other law.

(j) Where, by any agreement, a period of limitation is fixed for instituting an action upon any claim or for presenting or filing any claim, proof of claim, proof of loss, demand, notice or the like, or where, in any action or by statute or ordinance, a period of limitation is fixed for serving or filing any claim or pleading, taking any appeal or doing any other act, and where in any such case such period had not expired as of the date the commissioner took possession of the business and property in this state of the foreign bank, the commissioner may for the benefit of such foreign bank institute any such action, serve or file any such claim or pleading, take any such appeal, or do any such other act, required or permitted to such foreign bank within a period of one year subsequent to the date of taking possession, or within such further period as may be permitted by the agreement, or in the action, or by statute or ordinance, as the case may be.

(k) (1) Except as provided in this subsection, the commissioner's taking possession of the business and property in this state of a foreign bank shall operate as a stay of and as an injunction against the following, as of the date the commissioner takes possession: (A) The commencement or continuation, including the issuance or employment of process, of a judicial, administrative or other action or proceeding against the foreign bank that was or could have been commenced before the taking of possession, or to recover a claim against the foreign bank that arose before the taking of possession; (B) the enforcement against the foreign bank or its business and property in this state of a judgment obtained before the taking of possession; (C) any act to obtain possession of property of the foreign bank or of property from the foreign bank or to exercise control over property of the foreign bank; (D) any act to create, perfect, or enforce any lien against property of the foreign bank, including any lien that secures a claim that arose before the taking of possession; and (E) any act to collect, assess, or recover a claim against the foreign bank that arose before the taking of possession.

(2) The commissioner's taking possession of the business and property in this state of a foreign bank shall not operate as a stay of or as injunction against: (A) The filing of a claim pursuant to subsection (e) of this section in the liquidation of the foreign bank; the making of a demand upon the commissioner pursuant to subsection (i) of this section to decide whether to assume or repudiate a contract of the foreign bank; the exercise of any set-off otherwise permissible under applicable law except as limited by subdivision (2) of subsection (g) of this section; the right of any secured creditor with a perfected security interest or other valid lien or security interest enforceable against third parties to retain collateral, including any right of such secured creditor under any security arrangement related to a qualified financial contract, to retain collateral and to apply such collateral in accordance with subparagraph (D) of subdivision (2) of subsection (i) of this section; any automatic termination in accordance with the terms of any qualified financial contract or any right to cause the termination or liquidation of any qualified financial contract, in accordance with the terms thereof; any right to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with one or more such qualified financial contracts; or the commencement of an action under subsection (d) of this section or any other action relating to the liquidation before the Superior Court judge overseeing the liquidation of the foreign bank; (B) the commencement or continuation of a criminal action or proceeding against the foreign bank; (C) the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power; (D) the enforcement of a judgment, other than a money judgment, obtained in an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power; (E) the issuance to the foreign bank by a governmental unit of a notice of tax deficiency; and (F) the commencement or continuation of a judicial action or proceeding by a secured creditor with a perfected security interest, or other valid lien or security interest enforceable against third parties, including any right of such secured creditor under any security arrangement related to a qualified financial contract, to enforce such security interest or lien.

(3) Except as otherwise provided in this subsection: (A) The stay or enjoining of an act against property of the foreign bank under this subsection shall continue until such property is no longer the property of the commissioner in possession of the foreign bank; and (B) the stay or enjoining of any other act under this subsection shall continue until the commissioner has concluded the liquidation.

(4) For good cause shown, on request of a party in interest and after notice and a hearing, the Superior Court judge overseeing the liquidation may grant relief from the stay or injunction provided under this subsection by terminating, annulling, modifying or conditioning such stay or injunction.

(5) In the case of any wilful violation of a stay or injunction provided in this subsection by any person or entity who has knowledge of the commissioner taking possession of the business and property in this state of a foreign bank that is the subject of the stay or injunction, the commissioner shall recover actual damages, including costs and reasonable attorneys' fees and, in appropriate circumstances, may recover punitive damages.

(l) The commissioner shall not accept any claim based on an agreement with the foreign bank unless the agreement is either reflected on the accounts, books or records of the foreign bank or a creditor provides documentary evidence of such agreement.

(P.A. 88-230, S. 10, 12; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 7, 8; P.A. 95-220, S. 4–6; P.A. 97-160, S. 1, 7; P.A. 99-36, S. 3, 4; P.A. 01-48, S. 12; P.A. 03-153, S. 3; P.A. 04-8, S. 5; 04-136, S. 42.)

History: P.A. 97-160 effective June 24, 1997 (Revisor's note: P.A. 88-230, 90-98, 93-142 and 95-220 authorized substitution of “judicial district of Hartford” for “judicial district of Hartford-New Britain” in public and special acts of 1997, effective September 1, 1998); P.A. 99-36 made technical changes in Subsec. (a)(6) and in Subsec. (c); P.A. 01-48 amended Subsec. (h)(1) by adding references to return receipt requested and express delivery; P.A. 03-153 redefined “qualified financial contract” in Subsec. (a)(6) by replacing “forward foreign exchange contract” with “forward foreign exchange” and making technical changes, amended Subsec. (e) by designating existing provisions as Subdiv. (1) and amending same by limiting acceptance of claims of creditors to those existing at time commissioner takes possession of business and property of foreign bank, deleting provision allowing commissioner to dispose of claims of not more than $50,000 without court approval and making technical changes, and adding Subdiv. (2) re liens or security interests of federal reserve banks or U.S. Department of Treasury, amended Subsec. (f) to add provisions re payments by commissioner to other offices of foreign bank that are being liquidated in amounts needed for payment of claims, and amended Subsec. (i)(2)(D) by substituting “a foreign bank whose state branch or state agency the commissioner is liquidating” for “the state branch or state agency in this state of the foreign bank”, deleting “or termination”, inserting “or in connection with the termination or liquidation of that qualified financial contract” and making technical changes, effective June 26, 2003; P.A. 04-8 made technical changes in Subsec. (c)(2), (3) and (4), effective April 16, 2004; P.A. 04-136 amended Subsec. (c) to incorporate references to Secs. 36a-221a, 36a-226a, and 36a-237f to 36a-237h, inclusive, effective May 12, 2004.

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Secs. 36a-429 to 36a-434. Reserved for future use.

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