Senate Bill No. 1064

Public Act No. 01-183

AN ACT CONCERNING BANK TRANSACTIONS.

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

Section 1. Subsection (d) of section 36a-65 of the general statutes is repealed and the following is substituted in lieu thereof:

(d) (1) The fee for investigating and processing each application is as follows:

[(A) Establishment of a branch, sale of a branch or relocation of a main office of a Connecticut bank, two thousand dollars, except in the case of a conversion from a branch to a limited branch and a limited branch to a branch, a reasonable fee not to exceed two thousand dollars.

(B) Establishment of a mobile branch, establishment of a limited branch under subdivision (1) of subsection (c) of section 36a-145, or relocation of a branch or limited branch, one thousand five hundred dollars.

(C) Establishment of a special need limited branch under subdivision (2) of subsection (c) of section 36a-145, five hundred dollars.

(D) Merger, consolidation or organization of a holding company under section 36a-125 or 36a-181, or purchase of assets or assumption of liabilities, other than by a Connecticut credit union or federal credit union, under section 36a-210, two thousand five hundred dollars if two institutions are involved and five thousand dollars if three or more institutions are involved.

(E) Organization of any Connecticut bank, fifteen thousand dollars, except no fee shall be required for the organization of an interim Connecticut bank.

(F) Reorganization of a mutual savings bank or mutual savings and loan association into a mutual holding company, five thousand dollars.

(G) Conversions under sections 36a-135 to 36a-138, inclusive, five thousand dollars, and conversions under section 36a-469a, two thousand five hundred dollars.

(2) The fee for investigating and processing each acquisition statement filed under section 36a-184 is two thousand five hundred dollars.

(3) Any fee for processing a notice of closing of a branch, limited branch or special need limited branch, if charged, shall not exceed two thousand dollars.

(4) The fee for processing an application for the sale of a limited branch, special need limited branch or mobile branch shall not exceed one thousand five hundred dollars.

(5) The fee for miscellaneous investigations is one hundred fifty dollars per day.]

(A) Establishment of (i) a branch under subdivision (1) of subsection (b) of section 36a-145, as amended by this act, two thousand dollars; (ii) a mobile branch under subsection (d) of section 36a-145, as amended by this act, one thousand five hundred dollars; (iii) a limited branch under subdivision (1) of subsection (c) of section 36a-145, as amended by this act, one thousand five hundred dollars; (iv) a special need limited branch under subdivision (2) of subsection (c) of section 36a-145, as amended by this act, five hundred dollars; (v) an out-of-state branch under subsection (i) of section 36a-145, as amended by this act, a reasonable fee not to exceed two thousand dollars from which any fees paid to a state other than this state or to a foreign country in connection with the establishment shall be deducted; and (vi) an out-of-state limited or mobile branch under subsection (i) of section 36a-145, as amended by this act, a reasonable fee not to exceed one thousand five hundred dollars from which any fees paid to a state other than this state or to a foreign country in connection with the establishment shall be deducted.

(B) Sale of (i) a branch under subsection (h) of section 36a-145, as amended by this act, two thousand dollars, except there shall be no fee for the sale of a branch of a Connecticut bank to another Connecticut bank or to a Connecticut credit union; and (ii) a limited branch, including a special need limited branch or mobile branch under subsection (h) of section 36a-145, as amended by this act, a fee not to exceed one thousand five hundred dollars.

(C) Relocation of (i) a main office of a Connecticut bank under subsection (a) of section 36a-81, two thousand dollars; and (ii) a branch or a limited branch under subsection (g) of section 36a-145, as amended by this act, five hundred dollars.

(D) Conversions from (i) a branch to a limited branch under subdivision (1) of subsection (c) of section 36a-145, as amended by this act; and (ii) a limited branch to a branch under subdivision (1) of subsection (b) of section 36a-145, as amended by this act, five hundred dollars.

(E) Merger or consolidation of a Connecticut bank under section 36a-125 or subsection (a) of section 36a-126, two thousand five hundred dollars if two institutions are involved and five thousand dollars if three or more institutions are involved.

(F) Purchase of assets or assumption of liabilities, other than by a Connecticut credit union or federal credit union, under section 36a-210, two thousand five hundred dollars.

(G) Organization of a holding company under section 36a-181, two thousand five hundred dollars.

(H) Organization of any Connecticut bank under section 36a-70, as amended by this act, fifteen thousand dollars, except no fee shall be required for the organization of an interim Connecticut bank.

(I) Reorganization of a mutual savings bank or mutual savings and loan association into a mutual holding company under section 36a-192, five thousand dollars.

(J) Conversions under (i) sections 36a-135 to 36a-138, inclusive, as amended by this act, five thousand dollars; (ii) sections 36a-469a, 36a-252 and 36a-252a, as amended by this act, two thousand five hundred dollars; and (iii) section 10 of this act, fifteen thousand dollars.

(K) Acquiring, altering or improving real estate for present or future use of the bank or purchasing real estate adjoining any parcel of real estate owned by the bank under subdivision (33) of subsection (a) of section 36a-250, five hundred dollars.

(2) The fee for investigating and processing each acquisition statement filed under section 36a-184 is two thousand five hundred dollars, except if the acquisition statement is filed in connection with a transaction that requires one or more applications, a reasonable fee not to exceed two thousand five hundred dollars.

(3) Any fee for processing a notice of closing of a branch, limited branch or special need limited branch under subdivision (1) of subsection (f) of section 36a-145, as amended by this act, if charged, shall not exceed two thousand dollars. There shall be no fee for processing a notice of closing of any mobile branch.

(4) The fee for miscellaneous investigations shall be the actual cost of the investigation, as such cost is determined by the commissioner.

Sec. 2. Subdivision (2) of subsection (r) of section 36a-70 of the general statutes is repealed and the following is substituted in lieu thereof:

(2) One or more persons may organize a community bank in accordance with the provisions of this section, except that subsection (g) of this section shall not apply. Any such community bank shall commence business with a minimum equity capital of at least three million dollars. [In the case of a capital stock community bank, no person, whether acting individually or in concert with others, shall subscribe for, purchase or otherwise acquire, by merger, acquisition or otherwise, in excess of nine and nine-tenths per cent of the capital stock of the bank.] The approving authority for a community bank shall be the commissioner acting alone. In addition to the considerations and determinations required by subsection (h) of this section, before granting a temporary certificate of authority to organize a community bank, the approving authority shall determine that (A) each of the proposed directors and proposed executive officers, as defined in subparagraph (D) of subdivision (3) of this subsection, possesses capacity and fitness for the duties and responsibilities with which such director or officer will be charged and (B) there is satisfactory community support for the proposed community bank based on evidence of such support provided by the organizers to the approving authority. If the approving authority cannot make such determination with respect to any such proposed director or proposed executive officer, the approving authority may refuse to allow such proposed director or proposed executive officer to serve in such capacity in the proposed community bank.

Sec. 3. Section 36a-86 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) The governing board of each Connecticut bank shall [,] annually [, have] procure an audit or examination by certified public accountants or holders of certificates of authority as public accountants selected by vote of the governing board or a duly authorized committee thereof, and such accountants shall agree to provide related working papers, policies and procedures to the commissioner, if requested. The accountants shall thoroughly examine the books, records, accounts and affairs of such bank and submit a signed report of the audit or examination showing the condition of the bank to the governing board of such bank within [ninety days of the start of the audit or examination showing the condition of the bank. One] a reasonable period of time following the conclusion of the audit or examination. The signed report shall be kept on file in such bank and [one transmitted to] a copy shall be filed with the commissioner. [The directors] Members of the governing board of such Connecticut bank shall not be personally liable for any loss suffered by such bank through the wrongdoing or negligence of any officer or employee, which wrongdoing or negligence should have been discovered by the accountants in the performance of their duties, provided such [directors] members shall have exercised due care to procure thorough and substantial audits by the accountants.

(b) Notwithstanding the provisions of subsection (a) of this section, the governing board of a Connecticut bank that is a subsidiary of a holding company may procure and file annually with the commissioner a signed consolidated report of the audit or examination of the holding company in lieu of that of the Connecticut bank, provided (1) prior to the engagement of an accountant, the governing board of such Connecticut bank has voted to allow and accept as adequate, a consolidated report of the audit or examination of the holding company; the accountants selected to provide such consolidated report have agreed to provide related working papers, policies and procedures to the commissioner, if requested; and the commissioner has approved, conditionally or unconditionally, the substitution of such consolidated report; (2) the accountants shall thoroughly examine the books, records, accounts and affairs of the Connecticut bank and shall submit a signed consolidated report to the governing board of such Connecticut bank within a reasonable period of time following the conclusion of the audit or examination; and (3) the signed consolidated report shall be kept on file in such Connecticut bank and a copy shall be filed with the commissioner.

Sec. 4. Section 36a-137 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) (1) Any capital stock Connecticut bank or capital stock federal bank may convert into any other capital stock Connecticut bank or capital stock federal bank upon the approval of the conversion by the commissioner, provided this section does not apply to the conversion of a capital stock federal bank to another capital stock federal bank. The requirements of the commissioner's approval and subdivisions (3) to (5), inclusive, of this subsection do not apply to the conversion of a capital stock Connecticut bank into a national banking association.

(2) Any conversion pursuant to this section involving the conversion of or to a capital stock federal bank shall be authorized only if permitted by federal law and shall be subject to all requirements prescribed by federal law.

(3) The converting bank shall file with the commissioner a proposed plan of conversion, a copy of the proposed certificate of incorporation and a certificate by the secretary of the converting bank that the proposed plan of conversion and proposed certificate of incorporation have been approved in accordance with subdivision (4) of this subsection by the governing board and the shareholders.

(4) The plan of conversion and proposed certificate of incorporation shall require the approval of a majority of the governing board of the converting bank and, in the case of a converting Connecticut bank, the favorable vote of not less than two-thirds of the holders of each class of the bank's capital stock cast at a meeting called to consider such conversion. In the case of a converting federal bank, the plan of conversion shall require any vote of shareholders prescribed by federal law.

(5) Any shareholder of a converting Connecticut bank who, on or before the date of the shareholders' meeting to vote on such conversion, objects to the conversion by filing a written objection with the secretary of the bank may, within ten days after the effective date of such conversion, make written demand upon the converted bank for payment of such shareholder's stock; and thereafter such shareholder's rights shall be the same as those of a shareholder who dissents from the merger of two or more capital stock Connecticut banks.

(b) In any conversion under this section of a [Connecticut] capital stock Connecticut bank to a capital stock federal bank other than a national banking association:

(1) The commissioner shall approve a conversion under this subsection if the commissioner determines that the converting bank has complied with all applicable provisions of law.

(2) After receipt of the commissioner's approval, the converting bank shall promptly file the approval with the Secretary of the State and with the town clerk of the town in which its principal office is located. Upon filing, and upon the receipt of all necessary approvals required under federal law, the converting bank ceases to be a capital stock Connecticut bank and becomes a capital stock federal bank. The converted bank shall not commence business unless its insurable accounts and deposits are insured by the Federal Deposit Insurance Corporation or its successor agency.

(c) In any conversion under this section of a capital stock Connecticut bank to a national banking association, the converting bank shall: (1) File a notice of its intent to convert with the commissioner at the time it submits an application to convert with the Office of the Comptroller of the Currency; and (2) submit its charter, or a copy thereof, to the commissioner upon consummation of the conversion.

[(c)] (d) In any conversion under this section involving the conversion to a capital stock Connecticut bank:

(1) The commissioner shall approve a conversion under this subsection if the commissioner determines that: (A) The converting bank has complied with all applicable provisions of law; (B) the converting bank has equity capital at least equal to the minimum equity capital for the organization of a Connecticut bank; and (C) the proposed conversion will serve public necessity and convenience.

(2) After receipt of the commissioner's approval, the converting bank shall promptly file such approval and its certificate of incorporation with the Secretary of the State and with the town clerk of the town in which its principal office is located. Upon such filing, the converting bank shall cease to be the type of bank from which it converted and shall become a bank and trust company, capital stock savings bank or capital stock savings and loan association, as the case may be. The converted Connecticut bank shall not commence business unless its insurable accounts and deposits are insured by the Federal Deposit Insurance Corporation or its successor agency. Upon such conversion, the converted Connecticut bank possesses all of the rights, privileges and powers granted to it by its certificate of incorporation and by the provisions of the general statutes applicable to the type of Connecticut bank into which it converted, and all of the assets, business and good will of the converting bank are transferred to and vested in it without any deed or instrument of conveyance, provided the converting bank may execute any deed or instrument of conveyance as is convenient to confirm such transfer. The converted Connecticut bank is subject to all of the duties, relations, obligations, trusts and liabilities of the converting bank, whether as debtor, depository, registrar, transfer agent, executor, administrator, trustee or otherwise, and is liable to pay and discharge all such debts and liabilities, to perform all such duties and to administer all such trusts in the same manner and to the same extent as if the converted Connecticut bank had itself incurred the obligation or liability or assumed the duty, relation or trust. All rights of creditors of the converting bank and all liens upon the property of such bank are preserved unimpaired and the converted Connecticut bank is entitled to receive, accept, collect, hold and enjoy any and all gifts, bequests, devises, conveyances, trusts and appointments in favor of or in the name of the converting bank and whether made or created to take effect prior to or after the conversion.

(3) The persons named as directors in the certificate of incorporation shall be the directors of the converted Connecticut bank until the first annual election of directors after the conversion or until the expiration of their terms as directors, and shall have the power to take all necessary actions and to adopt bylaws concerning the business and management of such Connecticut bank.

(4) No such converted Connecticut bank shall exercise any of the fiduciary powers granted to Connecticut banks by law until express authority therefor has been given by the commissioner, unless such powers were legally exercised by the bank at the time of conversion.

(5) The franchise tax required to be paid by capital stock Connecticut banks on an increase of capital stock shall be paid upon the capital stock of any such converted Connecticut bank converting from a capital stock federal bank, the amount subject to such tax to be determined by deducting from the entire amount of such stock, the amount of the capital stock of the capital stock federal bank upon which such tax was paid during its existence as a capital stock Connecticut bank, if such capital stock federal bank came into existence by virtue of conversion from a capital stock Connecticut bank or by virtue of merger or consolidation of a capital stock Connecticut bank with a capital stock federal bank.

[(d)] (e) Notwithstanding the provisions of subsection (a) of this section, no reorganized savings institution shall have the power to convert into a bank and trust company, capital stock savings bank or capital stock savings and loan association, as the case may be.

Sec. 5. Section 36a-145 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) As used in this section:

(1) "Branch" means any office at a fixed location of a Connecticut bank, other than the main office, at which deposits are received, checks paid and money lent and which maintains minimum banking hours from nine o'clock a.m. until three o'clock p.m., Monday through Friday.

(2) "Limited branch" means any office at a fixed location of a Connecticut bank at which banking business is conducted other than the main office, branch or mobile branch.

(3) "Mobile branch" means any office of a Connecticut bank at which banking business is conducted which is in fact moved or transported to one or more predetermined locations in accordance with a predetermined schedule.

(b) (1) With the approval of the commissioner, any Connecticut bank may establish a branch in this state.

(2) The commissioner shall not approve the establishment of a branch under this subsection unless the commissioner considers whether: (A) Establishment of the branch will result in an oversaturation of depository institutions in the town in which the branch is to be located or in the area surrounding the town; (B) establishment of the branch is consistent with safe and sound banking practices in the town or the surrounding area; (C) the Connecticut bank seeking approval of the branch intends to operate the branch on a long-term basis; and (D) the Connecticut bank maintains, and will continue to maintain, a reasonable ratio of loans made in the state to deposits received from residents of the state. In determining whether to approve the establishment of a branch under this subsection, the commissioner shall not consider the existence of any office established under subsection (d) of section 36a-425, as amended by this act, by the Connecticut bank, or by a holding company of which the Connecticut bank is a subsidiary, that is situated at or near the location of the branch.

(3) The commissioner shall not approve the establishment of any branch under this subsection unless the commissioner makes the findings required under section 36a-34.

(4) With the approval of the commissioner, any Connecticut bank may convert a limited branch in this state to a branch. The commissioner shall not approve a conversion under this subdivision unless the commissioner considers such factors and makes such findings under subdivisions (2) and (3) of this subsection as the commissioner deems applicable.

(c) (1) With the approval of the commissioner, any Connecticut bank may establish in this state a limited branch that provides limited services or is open for limited time periods. The commissioner shall not approve the establishment of a branch under this subdivision unless the commissioner considers such factors and makes such findings under subdivisions (2) and (3) of subsection (b) of this section as the commissioner deems applicable. The commissioner shall approve such establishment if the commissioner determines that: (A) The interest of the neighborhood where the limited branch is to be located will be served to advantage by the establishment of the proposed branch, (B) the proposed products, services and banking hours are appropriate to meet the convenience and needs of the neighborhood, and (C) in the case of an establishment resulting from the conversion of a branch to a limited branch, alternative banking services are available in the neighborhood so that any reduction in services or hours will not result in unmet banking needs.

(2) With the approval of the commissioner, any Connecticut bank may establish in this state a special need limited branch that provides limited services or is open for limited time periods in order to meet a special need of the neighborhood in which such limited branch is to be located. The commissioner shall not approve the establishment of a branch under this subdivision unless the commissioner considers such factors and makes such findings and determinations under subdivision (1) of this subsection as the commissioner deems necessary.

(3) A limited branch or mobile branch shall be conspicuously identified as a branch of the Connecticut bank. The commissioner may condition the approval of such branch with any other requirement that the commissioner deems necessary or appropriate for the protection of depositors or the Connecticut bank.

(d) With the approval of the commissioner for each predetermined location, any Connecticut bank may establish in this state a mobile branch that provides full or limited services or is open for full or limited time periods. The commissioner shall not approve the establishment of a mobile branch under this subsection unless the commissioner makes the considerations, findings and determinations required under subdivision (1) of subsection (c) of this section, provided that in the case of a mobile branch established in order to meet a special need of the neighborhood in which such mobile branch is to be located, the commissioner shall not approve such establishment unless the commissioner makes the considerations and determinations required under subdivision (2) of subsection (c) of this section.

(e) Nothing in this section shall prohibit a Connecticut bank from establishing or operating a branch, limited branch or mobile branch in the same or approximately the same location as another depository institution, or continuing to operate as a branch, limited branch or mobile branch in this state in the same or approximately the same location, the business of any other depository institution which has been acquired by the Connecticut bank.

(f) (1) A Connecticut bank which proposes to close any branch or limited branch shall submit to the commissioner a notice of the proposed closing not later than the first day of the ninety-day period ending on the date proposed for that closing. The notice shall include a detailed statement of the reasons for the decision to close the branch or limited branch and the statistical and other information in support of such reasons. After receipt of the notice, the commissioner may require the Connecticut bank to submit any additional information.

(2) The Connecticut bank shall provide notice of the proposed closing to its customers by:

(A) Posting a notice in a conspicuous manner on the premises of the branch or limited branch proposed to be closed during a period not less than the thirty-day period ending on the date proposed for that closing, and

(B) Including a notice in at least one of any regular account statements mailed to customers of the branch or limited branch proposed to be closed or in a separate mailing, by not later than the beginning of the ninety-day period ending on the date proposed for that closing.

(3) (A) A Connecticut bank which proposes to close any mobile branch shall [comply with such notice and other requirements as the commissioner may prescribe] submit to the commissioner a notice of the proposed closing not later than thirty days prior to the date proposed for such closing. The notice shall include a detailed statement of the reasons for the decision to close the mobile branch and the statistical and other information in support of such reasons. After receipt of the notice, the commissioner may require the Connecticut bank to submit any additional information.

(B) A Connecticut bank which proposes to close any predetermined location of a mobile branch shall notify the commissioner prior to the closing of such location.

(g) With the approval of the commissioner, any Connecticut bank may relocate within this state any branch or limited branch in accordance with such notice and other requirements as the commissioner may prescribe. As used in this subsection, "relocate" means to move within the same immediate neighborhood without substantially affecting the nature of the business or customers served.

(h) With the approval of the commissioner, a Connecticut bank may sell a branch, limited branch or mobile branch to any bank, Connecticut credit union or federal credit union. The selling Connecticut bank must have been in existence and continuously operating for at least five years unless the commissioner waives this requirement. The commissioner shall not approve such sale if such acquiring bank or credit union, including all insured depository institutions which are affiliates of the bank or credit union, upon consummation of the sale, 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.

(i) With the approval of the commissioner, a Connecticut bank may establish a branch, limited branch or mobile branch outside of this state in accordance with applicable law. The commissioner shall not grant such approval, unless: (1) The commissioner finds, in accordance with regulations adopted pursuant to chapter 54, that the Connecticut bank has a record of compliance with the requirements of the Community Reinvestment Act of 1977, 12 USC 2901 et seq., as from time to time amended, sections 36a-30 to 36a-33, inclusive, to the extent applicable, and applicable consumer protection laws; (2) the Connecticut bank is adequately capitalized and the commissioner determines that it will continue to be adequately capitalized; and (3) the Connecticut bank is adequately managed and the commissioner determines that it will continue to be adequately managed. 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.

Sec. 6. Section 36a-215 of the general statutes is repealed and the following is substituted in lieu thereof:

[For a period of three years from April 8, 1992, the commissioner, upon request, may exempt any transaction involving a troubled financial institution from any requirement under this title, and regulations adopted under this title, that is necessary for the consummation of the transaction if the commissioner finds that such exemption is advisable and in the interest of the depositors or members of the troubled financial institution or the public, provided the commissioner shall not exempt a troubled financial institution from any requirement that the institution's insurable accounts or deposits be federally insured. Any exemption granted by the commissioner under this section shall be in writing and shall set forth the reason or reasons for the exemption. For the purposes of this section, (1) "troubled financial institution" means any bank, Connecticut credit union or federal credit union that, in the opinion of the primary regulatory agency of such institution and with the concurrence of the institution's federal deposit insurer with such opinion, is (A) in danger of becoming insolvent or (B) not likely to be able to meet the demands of its depositors or members, as the case may be, or pay its obligations in the normal course of business or is likely to incur losses that may deplete all or substantially all of its capital, and (2) "transaction" includes the organization of a Connecticut bank or Connecticut credit union, and any conversion of, merger or consolidation with, or acquisition of all or part of the assets or stock of any bank, Connecticut credit union or federal credit union.]

If, in the opinion of the commissioner, a Connecticut bank organized to function solely in a fiduciary capacity or an uninsured bank in danger of becoming insolvent, is not likely to be able to meet the demands of its depositors, in the case of an uninsured bank, or pay its obligations in the normal course of business, or is likely to incur losses that may deplete all or substantially all of its capital, the commissioner may require such Connecticut bank organized to function solely in a fiduciary capacity or uninsured bank to keep assets on deposit in an amount that would be sufficient to meet the costs and expenses incurred by the commissioner pursuant to section 36a-223 and all fees and assessments due the commissioner. Such assets shall be deposited with such bank as the commissioner may designate, and shall be in such form and subject to such conditions as the commissioner deems necessary. For purposes of this section, "uninsured bank" has the meaning given to that term in subsection (t) of section 36a-70.

Sec. 7. Section 36a-252 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Any community bank organized pursuant to subsection (r) of section 36a-70, as amended by this act, may, upon the approval of the commissioner, [expand its powers and] convert to a Connecticut bank that is authorized to operate without the limitations provided in subdivision (3) of subsection (r) of section 36a-70, as amended by this act.

(b) A community bank that proposes to [expand its powers] convert shall file with the commissioner a proposed plan of [expansion] conversion, a copy of the proposed certificate of incorporation and a certificate by the secretary of the community bank that the proposed plan of [expansion] conversion and proposed certificate of incorporation have been approved in accordance with subsection (c) of this section.

(c) The proposed plan of [expansion] conversion and proposed certificate of incorporation shall require the approval of a majority of the governing board of the community bank and the favorable vote of not less than two-thirds of the holders of each class of the bank's capital stock, if any, or, in the case of a mutual community bank, the corporators thereof, cast at a meeting called to consider such [expansion] conversion.

(d) Any shareholder of a capital stock community bank that proposes to [expand its powers] convert who, on or before the date of the shareholders' meeting to vote on such [expansion] conversion, objects to the [expansion] conversion by filing a written objection with the secretary of such bank may, within ten days after the effective date of such [expansion] conversion, make written demand upon the bank for payment of such shareholder's stock. Any such shareholder that makes such objection and demand shall have the same rights as those of a shareholder who dissents from the merger of two or more capital stock Connecticut banks.

(e) The commissioner shall approve [an expansion of powers] a conversion under this section if the commissioner determines that: (1) The community bank has complied with all applicable provisions of law; (2) the community bank has equity capital of at least five million dollars; (3) the community bank has received satisfactory ratings on its most recent state or federal safety and soundness examination and Community Reinvestment Act examination; and (4) the proposed [expansion of powers] conversion will serve the public necessity and convenience.

(f) After receipt of the commissioner's approval, the community bank shall promptly file such approval and its certificate of incorporation with the Secretary of the State and with the town clerk of the town in which its principal office is located. Upon such filing, the bank shall cease to be a community bank subject to the limitations provided in subdivision (3) of subsection (r) of section 36a-70, as amended by this act, and shall be a Connecticut bank possessed of all rights, privileges and powers granted to it by its certificate of incorporation and by the provisions of the general statutes applicable to its type of Connecticut bank, and all of the assets, business and good will of the community bank shall be transferred to and vested in such Connecticut bank without any deed or instrument of conveyance, provided the [Connecticut] converting bank may execute any deed or instrument of conveyance as is convenient to confirm such transfer. Such Connecticut bank shall be subject to all of the duties, relations, obligations, trusts and liabilities of the community bank, whether as debtor, depository, registrar, transfer agent, executor, administrator or otherwise, and shall be liable to pay and discharge all such debts and liabilities, to perform all such duties in the same manner and to the same extent as if the Connecticut bank had itself incurred the obligation or liability or assumed the duty or relation. All rights of creditors of the [predecessor] community bank and all liens upon the property of such bank shall be preserved unimpaired and the Connecticut bank shall be entitled to receive, accept, collect, hold and enjoy any and all gifts, bequests, devises, conveyances, trusts and appointments in favor of or in the name of the community bank and whether made or created to take effect prior to or after the [expansion of powers] conversion.

(g) The persons named as directors in the certificate of incorporation shall be the directors of such Connecticut bank until the first annual election of directors after the [expansion of powers] conversion or until the expiration of their terms as directors, and shall have the power to take all necessary actions and to adopt bylaws concerning the business and management of such Connecticut bank.

(h) No such Connecticut bank may exercise any of the fiduciary powers granted to Connecticut banks by law until express authority therefor has been given by the commissioner, unless such authority was previously granted to the [predecessor] community bank.

(i) The franchise tax required to be paid by capital stock Connecticut banks upon an increase of capital stock shall be paid upon the capital stock of any such Connecticut bank, provided, any franchise tax paid by the [predecessor] community bank shall be subtracted from any amount owed under this subsection.

Sec. 8. Subsection (d) of section 36a-425 of the general statutes is repealed and the following is substituted in lieu thereof:

(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. [subject to the approval of the commissioner.] 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. [Any applicant for permission to establish an office pursuant to this subsection shall pay to the commissioner a fee, in an amount fixed by the commissioner, to defray the costs of processing such applications.]

Sec. 9. Section 36a-252a of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Any [uninsured bank organized pursuant to] Connecticut bank that is an uninsured bank, as defined in subsection (t) of section 36a-70, or any Connecticut bank that functions solely in a fiduciary capacity, may, upon the approval of the commissioner, [expand its powers] convert to a Connecticut bank that is authorized to accept retail deposits, as defined in [said] subsection (t) of section 36a-70, and operate without the limitations provided in subdivisions (3) and (4) of [said] subsection (t) of section 36a-70 or subsection (b) of section 36a-250.

(b) [An uninsured bank that proposes to expand its powers] The converting bank shall file with the commissioner a proposed plan of [expansion, a copy of the proposed plan of expansion] conversion, a copy of the proposed certificate of incorporation and a certificate by the secretary of the [uninsured] converting bank that the proposed plan of [expansion] conversion and proposed certificate of incorporation have been approved in accordance with subsection (c) of this section.

(c) The proposed plan of [expansion] conversion and proposed certificate of incorporation shall require the approval of a majority of the governing board of the [uninsured] converting bank and the favorable vote of not less than two-thirds of the holders of each class of the [uninsured] converting bank's capital stock, if any, or in the case of a converting mutual [uninsured] bank, the corporators thereof, cast at a meeting called to consider such [expansion] conversion.

(d) Any shareholder of a capital stock [uninsured] Connecticut bank that proposes to [expand its powers] convert under this section, who, on or before the date of the shareholders' meeting to vote on such [expansion] conversion, objects to the [expansion] conversion by filing a written objection with the secretary of such bank may, within ten days after the effective date of such [expansion] conversion, make written demand upon the bank for payment of such shareholder's stock. Any such shareholder that makes such objection and demand shall have the same rights as those of a shareholder who dissents from the merger of two or more capital stock Connecticut banks.

(e) The commissioner shall approve [an expansion of powers] a conversion under this section if the commissioner determines that: (1) The [uninsured] converting bank has complied with all applicable provisions of law; (2) the [uninsured] converting bank has equity capital of at least five million dollars; (3) the [uninsured] converting bank has received satisfactory ratings on its most recent safety and soundness examination; (4) the proposed [expansion of powers] conversion will serve the public necessity and convenience; and (5) the [uninsured] converting bank will provide adequate services to meet the banking needs of all community residents, including low-income residents and moderate-income residents to the extent permitted by its charter, in accordance with a plan submitted by the [uninsured] converting bank to the commissioner, in such form and containing such information as the commissioner may require. Upon receiving any such plan, the commissioner shall make the plan available for public inspection and comment at the Department of Banking and cause notice of its submission and availability for inspection and comment to be published in the department's weekly bulletin. With the concurrence of the commissioner, the [uninsured] converting bank shall publish, in the form of a legal advertisement in a newspaper having a substantial circulation in the area, notice of such plan's submission and availability for public inspection and comment. The notice shall state that the inspection and comment period will last for a period of thirty days from the date of publication. The commissioner shall not make such determination until the expiration of the thirty-day period. In making such determination, the commissioner shall, unless clearly inapplicable, consider, among other factors, whether the plan identifies specific unmet credit and consumer banking needs in the local community and specifies how such needs will be satisfied, provides for sufficient distribution of banking services among branches or satellite devices, or both, located in low-income neighborhoods, contains adequate assurances that banking services will be offered on a nondiscriminatory basis and demonstrates a commitment to extend credit for housing, small business and consumer purposes in low-income neighborhoods.

(f) After receipt of the commissioner's approval, the [uninsured] converting bank shall promptly file such approval and its certificate of incorporation with the Secretary of the State and with the town clerk of the town in which its principal office is located. Upon such filing, the bank shall cease to be an uninsured bank subject to the provisions of subdivisions (3) and (4) of subsection (t) of section 36a-70, or a Connecticut bank organized to function solely in a fiduciary capacity, subject to the limitations provided in subsection (b) of section 36a-250, and shall be a Connecticut bank subject to all of the requirements and limitations and possessed of all rights, privileges and powers granted to it by its certificate of incorporation and by the provisions of the general statutes applicable to its type of Connecticut bank. Such Connecticut bank shall not commence business unless its insurable accounts and deposits are insured by the Federal Deposit Insurance Corporation or its successor agency. Upon such filing with the Secretary of the State and with the town clerk, all of the assets, business and good will of the [uninsured] converting bank shall be transferred to and vested in such Connecticut bank without any deed or instrument of conveyance, provided the [Connecticut] converting bank may execute any deed or instrument of conveyance as is convenient to confirm such transfer. Such Connecticut bank shall be subject to all of the duties, relations, obligations, trusts and liabilities of the [uninsured] converting bank, whether as debtor, depository, registrar, transfer agent, executor, administrator or otherwise, and shall be liable to pay and discharge all such debts and liabilities, to perform all such duties in the same manner and to the same extent as if the Connecticut bank had itself incurred the obligation or liability or assumed the duty or relation. All rights of creditors of the [predecessor uninsured] converting bank and all liens upon the property of such bank shall be preserved unimpaired and the Connecticut bank shall be entitled to receive, accept, collect, hold and enjoy any and all gifts, bequests, devises, conveyances, trusts and appointments in favor of or in the name of the [uninsured] converting bank and whether made or created to take effect prior to or after the [expansion of powers] conversion.

(g) The persons named as directors in the certificate of incorporation shall be the directors of such Connecticut bank until the first annual election of directors after the [expansion of powers] conversion or until the expiration of their terms as directors, and shall have the power to take all necessary actions and to adopt bylaws concerning the business and management of such Connecticut bank.

(h) No such Connecticut bank resulting from the conversion of an uninsured bank may exercise any of the fiduciary powers granted to Connecticut banks by law until express authority therefor has been given by the commissioner, unless such authority was previously granted to the [predecessor uninsured] converting bank.

(i) The franchise tax required to be paid by capital stock Connecticut banks upon an increase of capital stock shall be paid upon the capital stock of any such Connecticut bank, provided, any franchise tax paid by the [predecessor uninsured] converting bank shall be subtracted from any amount owed under this subsection.

Sec. 10. (NEW) (a) Any Connecticut bank that is authorized to accept retail deposits, as defined in subsection (t) of section 36a-70 of the general statutes, may, upon the approval of the Commissioner of Banking, convert to an uninsured bank, as defined in subsection (t) of said section.

(b) The converting bank shall file with the commissioner a proposed plan of conversion, a copy of the proposed certificate of incorporation and a certificate by the secretary of the converting bank that the proposed plan of conversion and proposed certificate of incorporation have been approved in accordance with subsection (c) of this section.

(c) The proposed plan of conversion and proposed certificate of incorporation shall require the approval of a majority of the governing board of the converting bank and the favorable vote of not less than two-thirds of the holders of each class of the bank's capital stock, if any, or, in the case of a mutual bank, the corporators thereof, cast at a meeting called to consider such conversion.

(d) Any shareholder of a converting capital stock Connecticut bank that proposes to convert to an uninsured bank who, on or before the date of the shareholders' meeting to vote on such conversion, objects to the conversion by filing a written objection with the secretary of such bank may, within ten days after the effective date of such conversion, make written demand upon the converted bank for payment of such shareholder's stock. Any such shareholder that makes such objection and demand shall have the same rights as those of a shareholder who dissents from the merger of two or more capital stock Connecticut banks.

(e) With the approval of the commissioner, a converting Connecticut bank shall liquidate all of its retail deposits, as defined in subsection (t) of section 36a-70 of the general statutes. The converting bank shall file with the commissioner a written notice of its intent to liquidate all of its retail deposits together with a plan of liquidation and a proposed notice to depositors approved and executed by a majority of its governing board. The commissioner shall approve the plan and the notice to depositors. The commissioner shall not approve a sale of the retail deposits of the converting bank if the purchasing insured depository institution, including all insured depository institutions which are affiliates of such institution, upon consummation of the sale, 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. The converting and purchasing institutions shall file with the commissioner a written agreement approved and executed by a majority of the governing board of each institution prescribing the terms and conditions of the transaction.

(f) The commissioner shall approve a conversion under this section if the commissioner determines that: (1) The converting bank has complied with all applicable provisions of law; (2) the converting bank has equity capital of at least five million dollars unless the commissioner establishes a different minimum capital requirement based on the proposed activities of the converting bank; (3) the converting bank has liquidated all of its retail deposits and has no deposits that are insured by the Federal Deposit Insurance Corporation or its successor agency; and (4) the proposed conversion will serve the public necessity and convenience. The commissioner shall not approve such conversion unless the commissioner considers the findings of the most recent state or federal safety and soundness examination of the converting bank, and the effect of the proposed conversion on the financial resources and future prospects of the converting bank.

(g) After receipt of the commissioner's approval for the conversion, the converting bank shall promptly file such approval and its certificate of incorporation with the Secretary of the State and with the town clerk of the town in which its principal office is located. Upon such filing, the converted Connecticut bank shall not accept retail deposits and shall be an uninsured bank, as defined in subsection (t) of section 36a-70 of the general statutes, subject to the limitations in subdivisions (3) and (4) of subsection (t) of section 36a-70 of the general statutes. Upon such conversion, the converted Connecticut bank possesses all of the rights, privileges and powers granted to it by its certificate of incorporation and by the provisions of the general statutes applicable to its type of Connecticut bank, and all of the assets, business and good will of the converting bank shall be transferred to and vested in the converted Connecticut bank without any deed or instrument of conveyance, provided the converting bank may execute any deed or instrument of conveyance as is convenient to confirm such transfer. The converted Connecticut bank shall be subject to all of the duties, relations, obligations, trusts and liabilities of the converting bank, whether as debtor, depository, registrar, transfer agent, executor, administrator or otherwise, and shall be liable to pay and discharge all such debts and liabilities, to perform all such duties in the same manner and to the same extent as if the converted bank had itself incurred the obligation or liability or assumed the duty or relation. All rights of creditors of the converting bank and all liens upon the property of such bank shall be preserved unimpaired and the uninsured bank shall be entitled to receive, accept, collect, hold and enjoy any and all gifts, bequests, devises, conveyances, trusts and appointments in favor of or in the name of the converting bank and whether made or created to take effect prior to or after the conversion.

(h) The persons named as directors in the certificate of incorporation shall be the directors of the converted Connecticut bank until the first annual election of directors after the conversion or until the expiration of their terms as directors, and shall have the power to take all necessary actions and to adopt bylaws concerning the business and management of such Connecticut bank.

(i) No converted Connecticut bank, other than a Connecticut bank which converted from a Connecticut bank organized solely to function in a fiduciary capacity, may exercise any of the fiduciary powers granted to Connecticut banks by law until express authority therefor has been given by the commissioner, unless such authority was previously granted to the converting bank.

(j) The franchise tax required to be paid by capital stock Connecticut banks upon an increase of capital stock shall be paid upon the capital stock of any such converted bank, provided, any franchise tax paid by the converting bank shall be subtracted from any amount owed under this subsection.

Sec. 11. This act shall take effect from its passage, except that section 1 shall take effect July 1, 2001.

Approved July 6, 2001