Connecticut Seal

Substitute Senate Bill No. 985

Public Act No. 03-196

AN ACT CONCERNING BANK AND CREDIT UNION TRANSACTIONS.

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

Section 1. Section 36a-2 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

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

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

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

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

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

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

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

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

(8) "Club deposit" means deposits to be received at regular intervals, the whole amount deposited to be withdrawn by the owner or repaid by the bank in not more than fifteen months from the date of the first deposit, and upon which no interest or dividends need to be paid;

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

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

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

(12) "Connecticut credit union" means a cooperative, nonprofit financial institution that (A) is organized under chapter 667 and the membership of which is limited as provided in section 36a-438a, (B) operates for the benefit and general welfare of its members with the earnings, benefits or services offered being distributed to or retained for its members, and (C) is governed by a volunteer board of directors elected by and from its membership;

(13) "Connecticut credit union service organization" means a credit union service organization that is incorporated under the laws of this state, located in this state and established by at least one Connecticut credit union;

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

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

(16) "Credit union service organization" means an entity organized under state or federal law to provide credit union service organization services primarily to its members, to Connecticut credit unions, federal credit unions and out-of-state credit unions other than its members, and to members of any such other credit unions;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(41) "Mutual holding company" means a mutual holding company organized under sections 36a-192 to 36a-199, inclusive, and unless otherwise indicated, a subsidiary holding company controlled by a mutual holding company organized under sections 36a-192 to 36a-199, inclusive;

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

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

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

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

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

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

(48) "Reorganized savings bank" means any savings bank incorporated and organized in accordance with sections 36a-192 and 36a-193;

(49) "Reorganized savings and loan association" means any savings and loan association incorporated and organized in accordance with sections 36a-192 and 36a-193;

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

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

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

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

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

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

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

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

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

(59) "Share account holder" means a person who maintains a share account in a Connecticut credit union, federal credit union or out-of-state credit union that maintains in this state a branch, as defined in section 36a-435b, as amended by this act;

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

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

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

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

[(63)] (64) "Subsidiary holding company" means a stock holding company, controlled by a mutual holding company, that holds one hundred per cent of the stock of a reorganized savings institution;

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

[(65)] (66) "Time account" means an account into which time deposits may be made; and

[(66)] (67) "Time deposit" means a deposit that the depositor or share account holder does not have a right and is not permitted to make withdrawals from within six days after the date of deposit, unless the deposit is subject to an early withdrawal penalty of at least seven days' simple interest on amounts withdrawn within the first six days after deposit, subject to those exceptions permissible under 12 CFR Part 204, as from time to time amended.

Sec. 2. Section 36a-3 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

Other definitions applying to this title or to specified parts thereof and the sections in which they appear are:

 

"Account". Sections 36a-155 and 36a-365.

 

"Additional proceeds". Section 36a-746e.

 

"Advance fee". Sections 36a-510, 36a-485 and 36a-615.

 

"Advertise" or "advertisement". Sections 36a-485 and 36a-510.

 

"Agency bank". Section 36a-285.

 

"Alternative mortgage loan". Section 36a-265.

 

"Amount financed". Section 36a-690.

 

"Annual percentage rate". Section 36a-690.

 

"Annual percentage yield". Section 36a-316.

 

"Annuities". Section 36a-455a, as amended by this act.

 

"Applicant". Section 36a-736.

 

"APR". Section 36a-746a.

 

"Assessment area". Section 36a-37.

 

"Associate". Section 36a-184.

 

"Associated member". Section 36a-458a.

 

"Bank". Section 36a-30.

 

"Bankers' bank". Section 36a-70.

 

"Banking business". Section 36a-425.

 

"Basic services". Section 36a-437a.

 

"Billing cycle". Section 36a-565.

 

"Bona fide nonprofit organization". Section 36a-655.

 

"Branch". Sections 36a-145, 36a-410 and 36a-435b.

 

"Branch or agency net payment entitlement". Section 36a-428n.

 

"Branch or agency net payment obligation". Section 36a-428n.

 

"Broker". Section 36a-746a.

 

"Business and industrial development corporation". Section 36a-626.

 

"Business and property in this state". Section 36a-428n.

 

"Capital". Section 36a-435b, as amended by this act.

 

"Cash advance". Section 36a-564.

 

"Cash price". Section 36a-770.

 

"Certificate of incorporation". Section 36a-435b, as amended by

 

this act.

 

"Closely related activities". Sections 36a-250 and 36a-455a.

 

"Collective managing agency account". Section 36a-365.

 

"Commercial vehicle". Section 36a-770.

 

"Community bank". Section 36a-70.

 

"Community credit union". Section 36a-37.

 

"Community development bank". Section 36a-70.

 

"Community reinvestment performance". Section 36a-37.

 

"Connecticut holding company". Section 36a-410.

 

"Consolidate". Section 36a-145, as amended by this act.

 

"Construction loan". Section 36a-458a.

 

"Consumer". Sections 36a-155, 36a-676 and 36a-695.

 

"Consumer Credit Protection Act". Section 36a-676.

 

"Consumer debtor" and "debtor". Sections 36a-645 and 36a-800.

 

"Consumer collection agency". Section 36a-800.

 

"Consummation". Section 36a-746a.

 

"Controlling interest". Section 36a-276.

 

"Corporate". Section 36a-435b, as amended by this act.

 

"Credit". Sections 36a-645 and 36a-676.

 

"Credit manager". Section 36a-435b, as amended by this act.

 

"Creditor". Sections 36a-676, 36a-695 and 36a-800.

 

"Credit card", "cardholder" and "card issuer". Section 36a-676.

 

"Credit clinic". Section 36a-695.

 

"Credit rating agency". Section 36a-695.

 

"Credit report". Section 36a-695.

 

"Credit sale". Section 36a-676.

 

"Credit union service organization". Section 36a-435b, as amended

 

by this act.

 

"Credit union service organization services". Section 36a-435b,

 

as amended by this act.

 

"De novo branch". Section 36a-410.

 

"Debt". Section 36a-645.

 

"Debt adjustment". Section 36a-655.

 

"Debt mutual fund". Sections 36a-275 and 36a-459a.

 

"Debt securities". Sections 36a-275 and 36a-459a.

 

"Debtor". Section 36a-655.

 

"Deliver". Section 36a-316.

 

"Deposit". Section 36a-316.

 

"Deposit account". [Sections 36a-136 and] Section

 

36a-316.

 

"Deposit account charge". Section 36a-316.

 

"Deposit account disclosures". Section 36a-316.

 

"Deposit contract". Section 36a-316.

 

"Deposit services". Section 36a-425.

 

"Depositor". Section 36a-316.

 

"Director". Section 36a-435b, as amended by this act.

 

"Earning period". Section 36a-316.

 

"Electronic payment instrument". Section 36a-596.

 

["Eligible account holder". Section 36a-136. ]

 

"Eligible collateral". Section 36a-330.

 

"Equity mutual fund". Sections 36a-276 and 36a-459a.

 

"Equity security". Sections 36a-276 and 36a-459a.

 

"Federal Credit Union Act". Section 36a-435b, as amended by

 

this act.

 

"Federal Home Mortgage Disclosure Act". Section 36a-736.

 

"Fiduciary". Section 36a-365.

 

"Filing fee". Section 36a-770.

 

"Finance charge". Sections 36a-690 and 36a-770.

 

"Financial institution". Sections 36a-41, 36a-44a, 36a-155, 36a-316,

 

    36a-330, 36a-435b, as amended by this act, and 36a-736.

 

"Financial records". Section 36a-41.

 

"First mortgage broker". Section 36a-485.

 

"First mortgage correspondent lender". Section 36a-485.

 

"First mortgage lender". Section 36a-485.

 

"First mortgage loan". Sections 36a-485, 36a-705 and 36a-715.

 

"Foreign banking corporation". Section 36a-425.

 

"General facility". Section 36a-580.

 

"Global net payment entitlement". Section 36a-428n.

 

"Global net payment obligation". Section 36a-428n.

 

"Goods". Sections 36a-535 and 36a-770.

 

"Graduated payment mortgage loan". Section 36a-265.

 

"Guardian". Section 36a-365.

 

"High cost home loan". Section 36a-746a.

 

"Holder". Section 36a-596.

 

"Home banking services". Section 36a-170.

 

"Home banking terminal". Section 36a-170.

 

"Home improvement loan". Section 36a-736.

 

"Home purchase loan". Section 36a-736.

 

"Home state". Section 36a-410.

 

"Immediate family member". Section 36a-435b, as amended by

 

this act.

 

"Insider". Section 36a-454b.

 

"Installment loan contract". Sections 36a-535 and 36a-770.

 

"Insurance". Section 36a-455a, as amended by this act.

 

"Insurance bank". Section 36a-285.

 

"Insurance department". Section 36a-285.

 

"Interest". Section 36a-316.

 

"Interest rate". Section 36a-316.

 

"Lender". Sections 36a-746a and 36a-770.

 

"Lessor". Section 36a-676.

 

"License". Section 36a-626.

 

"Licensee". Sections 36a-510, 36a-596 and 36a-626.

 

"Limited branch". Section 36a-145, as amended by this act.

 

"Limited facility". Section 36a-580.

 

"Loan broker". Section 36a-615.

 

"Loss". Section 36a-330.

 

"Made in this state". Section 36a-770.

 

"Managing agent". Section 36a-365.

 

"Manufactured home". Section 36a-457b.

 

"Material litigation". Section 36a-596.

 

"Member". Section 36a-435b, as amended by this act.

 

"Member business loan". Section 36a-458a.

 

"Member in good standing". Section 36a-435b, as amended by

 

this act.

 

"Membership share". Section 36a-435b, as amended by this act.

 

"Mobile branch". Section 36a-435b, as amended by this act.

 

"Money order". Section 36a-596.

 

"Money transmission". Section 36a-365.

 

"Mortgage insurance". Section 36a-725.

 

"Mortgage lender". Sections 36a-485, 36a-510 and 36a-705.

 

"Mortgage loan". Sections 36a-261, 36a-265 and 36a-457b,

 

as amended by this act.

 

"Mortgage rate lock-in". Section 36a-705.

 

"Mortgage servicing company". Section 36a-715.

 

"Mortgagor". Section 36a-715.

 

"Motor vehicle". Section 36a-770.

 

"Multiple common bond membership". Section 36a-435b,

 

as amended by this act.

 

"Municipality". Section 36a-800.

 

"Net outstanding member business loan balance". Section 36a-458a.

 

"Net worth". Sections 36a-441a, 36a-458a and 36a-596.

 

"Network". Section 36a-155.

 

"Nonrefundable". Sections 36a-498 and 36a-521.

 

"Note account". Sections 36a-301 and 36a-456b.

 

"Office". Section 36a-316.

 

"Officer". Section 36a-435b, as amended by this act.

 

"Open-end credit plan". Section 36a-676.

 

"Open-end loan". Section 36a-565.

 

"Organization". Section 36a-800.

 

"Originator". Sections 36a-485 and 36a-510.

 

"Out-of-state holding company". Section 36a-410.

 

"Outstanding". Section 36a-596.

 

"Passbook savings account". Section 36a-316.

 

"Payment instrument". Section 36a-596.

 

"Periodic statement". Section 36a-316.

 

"Permissible investment". Section 36a-596.

 

"Person". Section 36a-184.

 

"Post". Section 36a-316.

 

"Prepaid finance charge". Section 36a-746a.

 

"Prepayment penalty". Section 36a-746a.

 

"Prime quality". Section 36a-596.

 

"Principal amount of the loan". Section 36a-510.

 

"Processor". Section 36a-155.

 

"Public deposit". Section 36a-330.

 

"Purchaser". Section 36a-596.

 

"Qualified financial contract". Section 36a-428n.

 

"Qualified public depository" and "depository". Section 36a-330.

 

"Real estate". Section 36a-457b.

 

"Records". Section 36a-17.

 

"Relocate". Sections 36a-145 and 36a-462a, as amended by this act.

 

"Residential property". Section 36a-485.

 

"Retail buyer". Sections 36a-535 and 36a-770.

 

"Retail credit transaction". Section 42-100b.

 

"Retail deposits". Section 36a-70.

 

"Retail installment contract". Sections 36a-535 and 36a-770.

 

"Retail installment sale". Sections 36a-535 and 36a-770.

 

"Retail seller". Sections 36a-535 and 36a-770.

 

"Reverse annuity mortgage loan". Section 36a-265.

 

"Sales finance company". Sections 36a-535 and 36a-770.

 

"Savings department". Section 36a-285.

 

"Savings deposit". Section 36a-316.

 

"Secondary mortgage broker". Section 36a-510.

 

"Secondary mortgage correspondent lender". Section 36a-510.

 

"Secondary mortgage lender". Section 36a-510.

 

"Secondary mortgage loan". Section 36a-510.

 

"Security convertible into a voting security". Section 36a-184.

 

"Senior management". Section 36a-435b, as amended by this act.

 

"Share". Section 36a-435b, as amended by this act.

 

"Simulated check". Sections 36a-485 and 36a-510.

 

"Single common bond membership". Section 36a-435b,

 

as amended by this act.

 

"Social purpose investment". Section 36a-277.

 

"Standard mortgage loan". Section 36a-265.

 

"Table funding agreement". Section 36a-485.

 

"Tax and loan account". Sections 36a-301 and 36a-456b.

 

"The Savings Bank Life Insurance Company". Section 36a-285.

 

"Time account". Section 36a-316.

 

["Transaction". Section 36a-215. ]

 

"Travelers check". Section 36a-596.

 

"Troubled Connecticut credit union". Section 36a-448a.

 

["Troubled financial institution". Section 36a-215. ]

 

"Uninsured bank". Section 36a-70.

 

"Unsecured loan". Section 36a-615.

 

"Warehouse agreement". Section 36a-485.

Sec. 3. Section 36a-65 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) The commissioner shall annually, on or after July first for the fiscal year commencing on said July first, collect pro rata based on asset size from each Connecticut bank and each Connecticut credit union an amount sufficient in the commissioner's judgment to meet the expenses of the Department of Banking, including a reasonable reserve for contingencies, provided the commissioner shall not collect such amount from a newly organized Connecticut credit union until July first following the third full calendar year after issuance by the commissioner of such credit union's certificate of authority. Such assessments and expenses shall not exceed the budget estimates submitted in accordance with section 36a-13. Such assessments may be made more frequently than annually at the discretion of the commissioner. Such assessments for any fiscal year shall be reduced pro rata by the amount of any surplus from the assessments of prior fiscal years, which surplus shall be maintained in accordance with subdivision (4) of subsection [(c)] (b) of this section. The commissioner may reduce any such assessment collected from a Connecticut bank up to the amount of any assessment for the same fiscal year collected from such bank by another state in which such bank has established a branch, limited branch or mobile branch. The commissioner may reduce any such assessment collected from a Connecticut credit union up to the amount of any assessment for the same fiscal year collected from such credit union by another state in which such credit union has established a branch. Such assessments for any fiscal year shall be a liability of such banks and credit unions as of the assessment date. Except as provided in this subsection, such assessments shall not be prorated for any reason.

[(b) (1) The fee for trust department examinations shall be the actual cost of examination, as such cost is determined by the commissioner.

(2) The fee for an examination of a Connecticut credit union service organization is the actual cost of the examination, as such cost is determined by the commissioner.

(3) A licensee under section 36a-489, 36a-511, 36a-536, 36a-555, 36a-581, 36a-600, 36a-633, 36a-656 or 36a-801 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 not later than thirty days of receipt of demand from the commissioner shall automatically suspend the license until the costs are paid. ]

[(c)] (b) (1) Each such bank and credit union shall pay the commissioner the amount allocated to it within twenty business days from the time the commissioner mails a notice to it of the amount due, with an additional two hundred dollars if the amount allocated is not paid in the time specified. The provisions of this subdivision shall not apply to any person required to pay the commissioner any fee for license or registration or the whole cost of all examinations made by the commissioner.

(2) The State Treasurer shall place all funds received from the commissioner and all moneys received from any person for documents or reports sold by the commissioner in a special fund to be known as the State Banking Fund. [On and after September 19, 1991, amounts] Amounts in the fund may be expended only pursuant to appropriation by the General Assembly.

(3) The Comptroller shall determine for each fiscal year the expenses of the Department of Banking.

(4) The Secretary of the Office of Policy and Management shall examine the State Banking Fund annually after the Comptroller has made his determination and shall direct the Treasurer to set aside within the Banking Fund amounts in excess of a reasonable reserve for contingencies, which excess amounts shall be considered a surplus for the purposes of subsection (a) of this section.

(c) (1) The fee for an examination of a trust department of a Connecticut bank shall be the actual cost of the examination, as such cost is determined by the commissioner.

(2) The fee for an examination of a Connecticut bank organized to function solely in a fiduciary capacity shall be the actual cost of the examination, as such cost is determined by the commissioner.

(3) The fee for an examination of a Connecticut credit union service organization is the actual cost of the examination, as such cost is determined by the commissioner.

(4) The fee for an examination of an out-of-state branch of a Connecticut bank or a branch in this state of an out-of-state bank shall be the actual cost of the examination, as such cost is determined by the commissioner, and the commissioner may share any such fee with other banking regulators in accordance with agreements entered into by the commissioner pursuant to subsection (j) of section 36a-145, as amended by this act, and subdivision (5) of subsection (a) and subsection (b) of section 36a-412, as amended by this act.

(5) The fee for an examination of an out-of-state branch of a Connecticut credit union or a branch in this state of an out-of-state credit union shall be the actual cost of the examination, as such cost is determined by the commissioner, and the commissioner may share any such fee with other state or federal credit union regulators in accordance with agreements entered into by the commissioner pursuant to subsection (f) of section 36a-462a, as amended by this act, and subsection (b) of section 36a-462b, as amended by this act.

(6) A licensee under section 36a-489, 36a-513, 36a-541, 36a-556, 36a-581, 36a-600, 36a-628, 36a-656 or 36a-801 shall pay to the commissioner the actual cost of any examination of the licensee, as such cost is determined by the commissioner. If the licensee fails to pay such cost not later than thirty days after receipt of demand from the commissioner, the commissioner shall automatically suspend the license until such costs are paid.

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

(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 subdivision (1) of 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)] (4) of subsection (c) of section 36a-145, as amended by this act, five hundred dollars; (v) an out-of-state branch under subsection [(i)] (j) 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)] (i) 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)] (i) 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)] (3) of subsection (c) of section 36a-145, as amended by this act; and (ii) a limited branch to a branch under subdivision [(4)] (3) of subsection (b) of section 36a-145, as amended by this act, five hundred dollars.

(E) Merger or consolidation [of] involving 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] Acquisition of assets or [assumption of liabilities, other than by a Connecticut credit union or federal credit union,] business under section 36a-210, as amended by this act, 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, 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, five thousand dollars; (ii) sections 36a-139, 36a-139a and 36a-469c, two thousand five hundred dollars; and (iii) section 36a-139b, as amended by this act, fifteen thousand dollars.

(K) Acquiring, altering or improving real estate for present or future use in the business 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 a miscellaneous [investigations] investigation shall be the actual cost of the investigation, as such cost is determined by the commissioner.

Sec. 4. Section 36a-136 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

[(a) As used in this section: (1) "Eligible account holder" means any person holding a qualifying deposit; (2) "deposit account" means a deposit account, as defined in subdivision (21) of section 36a-2, but does not include an escrow account established pursuant to section 49-2a; (3) "qualifying deposit" means a deposit in a deposit account held on the eligibility record date. The amount of the qualifying deposit of an eligible account holder shall be the total of the deposit balances in the eligible account holder's deposit accounts in the converting institution as of the close of business on the eligibility record date. ]

[(b)] (a) With the approval of the commissioner, any mutual savings bank, mutual savings and loan association, federal mutual savings bank or federal mutual savings and loan association may convert to a capital stock bank in accordance with the provisions of this section and the regulations adopted pursuant to subsection [(h)] (f) of this section, provided this section does not apply to the conversion of a mutual federal bank to a capital stock federal bank. The commissioner may deny an application for conversion made pursuant to this section after allowing the applicant a reasonable opportunity to be heard.

[(c)] (b) A conversion of a federal mutual savings bank or federal mutual savings and loan association to a capital stock Connecticut bank shall be authorized only if permitted by federal law and shall be subject to all requirements prescribed by federal law. A conversion of a mutual savings bank or mutual savings and loan association 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.

[(d)] (c) The converting institution shall file with the commissioner a proposed plan of conversion, a copy of the proposed amended certificate of incorporation and a certificate by the secretary of the converting institution that the proposed plan of conversion has been approved, in accordance with subsection [(e)] (d) of this section, by the governing board and in the case of a converting savings and loan association, federal savings bank or federal savings and loan association, the depositors or members thereof.

[(e)] (d) The plan of conversion shall require the approval of a majority of the governing board of the converting institution. In the case of a converting savings and loan association, the plan of conversion shall also require the favorable vote of not less than fifty-one per cent of the votes cast by depositors of such association at a special meeting called to consider such conversion. In the case of a federal savings bank or federal savings and loan association, the plan of conversion shall require any vote of depositors or members prescribed by federal law.

[(f)] (e) In any conversion under this section, each [eligible] account holder of the converting institution deemed eligible under regulations adopted pursuant to subsection (f) of this section shall receive, without payment, nontransferable subscription rights to purchase capital stock of the converted institution pursuant to a subscription offering, and such offering shall precede any offering of the converting institution's stock to the members of the community and of the general public.

[(g)] Each converting institution shall, at the time of conversion, establish a liquidation account for the benefit of [eligible] such account holders and such liquidation account shall establish a priority upon liquidation. The [provisions of this subsection] requirement concerning the establishment of a liquidation account shall not apply to the formation of a mutual holding company or a reorganized savings institution of such mutual holding company under sections 36a-192 and 36a-193 or to the issuance of capital stock by such reorganized savings institution under sections 36a-195 and 36a-196.

[(h)] (f) The commissioner shall adopt regulations in accordance with chapter 54 to govern the conversion of mutual institutions to capital stock institutions. Such regulations shall be similar in scope and content to the regulations of the Office of Thrift Supervision, 12 CFR Part 563b, as from time to time amended, for the conversion of mutual savings institutions into stock savings institutions. The commissioner may waive any provision of the regulations adopted pursuant to this section that is inconsistent with the regulations of the Office of Thrift Supervision or if such waiver is necessary to comply with the requirements of the Federal Deposit Insurance Corporation or its successor agency.

[(i)] (g) If the commissioner certifies in writing that the protection of depositors or other creditors of such converting institution requires that the conversion proceed without delay, the commissioner may waive any provision of the regulations adopted pursuant to subsection [(h)] (f) of this section that the commissioner determines will cause such delay.

[(j)] (h) The commissioner [shall] may approve a conversion under this section only if the commissioner determines that: (1) The converting institution has complied with all applicable provisions of law; (2) the conversion would not result in any reduction of the converting institution's amount of equity capital, less any subordinated debt recognized as bona fide capital; (3) the conversion would not result in a taxable reorganization of the converting institution under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended; and (4) the plan of conversion is fair to depositors. The converted institution shall not commence business unless its insurable accounts and deposits are insured by the Federal Deposit Insurance Corporation or its successor agency.

Sec. 5. Section 36a-145 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(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. ,] at a minimum, is open for banking business Monday through Friday.

(2) "Consolidate" means to combine within the same neighborhood, without substantially affecting the nature of the business or customers served, (A) two or more branches into a single branch; (B) one or more branches and one or more limited branches into a single branch or limited branch; (C) two or more limited branches into a single limited branch; or (D) one or more branches or limited branches into a main office.

[(2)] (3) "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)] (4) "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.

[(4)] (5) "Relocate" means to move within the same immediate neighborhood without substantially affecting the nature of the business or customers served.

(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 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.

(2) For a period of three years following the issuance of its final certificate of authority pursuant to subsection (l) of section 36a-70, a Connecticut bank may, with thirty days prior notice to the commissioner, establish a branch in this state if the proposed branch was approved as part of the application to organize such bank, unless the commissioner requires an approval pursuant to subdivision (1) of this subsection.

[(4)] (3) 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)] subdivision (1) 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 [, either de novo or resulting from the conversion of a branch,] that provides limited services or is open for limited time periods. The commissioner shall not approve the establishment of a limited branch under this subdivision unless the commissioner considers such factors and makes such findings under [subdivisions (2) and (3)] subdivision (1) 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 [or conversion] of the proposed branch, and (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) For a period of three years following the issuance of its final certificate of authority pursuant to subsection (l) of section 36a-70, a Connecticut bank may, with thirty days prior notice to the commissioner, establish a limited branch in this state if the proposed limited branch was approved as part of the application to organize such bank, unless the commissioner requires an approval pursuant to subdivision (1) of this subsection.

(3) With the approval of the commissioner, any Connecticut bank may convert a branch in this state to a limited branch. The commissioner shall not approve a conversion under this subdivision unless the commissioner considers such factors and makes such findings under subdivision (1) of subsection (b) of this section as the commissioner deems applicable, and the commissioner determines that alternative banking services are available in the neighborhood so that any reduction in services will not result in unmet banking needs.

[(2)] (4) 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 special need limited 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)] (5) 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) (1) 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)] (4) of subsection (c) of this section.

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

(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 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] Any Connecticut bank may relocate within this state any branch or limited branch established in this state in accordance with such notice to customers and other requirements as the commissioner may prescribe, provided the bank submits written notice to the commissioner not later than thirty days prior to the date of such relocation.

(h) Any Connecticut bank may consolidate within this state any branch, limited branch or main office established in this state in accordance with such notice to customers and other requirements as the commissioner may prescribe, provided the bank submits written notice to the commissioner not later than thirty days prior to the date of such consolidation.

[(h)] (i) With the approval of the commissioner, a Connecticut bank may sell a branch, limited branch or mobile branch established in this state 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. Approval under this subsection shall not be required if approval under section 36a-210, as amended by this act, is required for such sale.

[(i)] (j) 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. Any such agreement may include provisions concerning the assessment or sharing of fees for such examination or supervision.

[(j) With the approval of the commissioner, any] (k) Any Connecticut bank may relocate outside of this state any branch or limited branch established outside of this state in accordance with such notice to customers and other requirements as the commissioner may prescribe, provided the bank submits written notice to the commissioner not later than thirty days prior to the date of such relocation.

(l) Any Connecticut bank may consolidate outside of this state any branch or limited branch established outside of this state in accordance with such notice to customers and other requirements as the commissioner may prescribe, provided the bank submits written notice to the commissioner not later than thirty days prior to the date of such consolidation.

[(k)] (m) With the approval of the commissioner, a Connecticut bank may sell a branch, limited branch or mobile branch established outside of this state. The selling Connecticut bank must have been in existence and continuously operating for at least five years unless the commissioner waives this requirement. Approval under this subsection shall not be required if approval under section 36a-210, as amended by this act, is required for such sale.

Sec. 6. Section 36a-210 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) (1) With the approval of the commissioner, [(1)] a Connecticut bank [or a Connecticut credit union may sell] may transfer all or a significant part of its assets [and] or business to a bank. [, and (2) a Connecticut credit union may sell all or a significant part of its assets and business to a Connecticut credit union or a federal credit union. ] The [selling Connecticut] transferring 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] transfer if the [purchasing institution] acquiring bank, including all insured depository institutions which are affiliates of such [institution] bank, upon consummation of the [sale] transfer, 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 [selling and purchasing institutions] transferring and acquiring banks shall file with the commissioner a written agreement approved and executed by a majority of the governing board of each [institution] bank prescribing the terms and conditions of the transaction. In the case of a [sale] transfer of all of the assets and business of the [selling institution] transferring bank, the terms of the agreement shall at least provide for full payment of the amounts due depositors [, share account holders] and creditors of the [selling institution] transferring bank. Payment for all or part of the assets and business of the [selling institution] transferring bank may be made in cash or by making available on demand to depositors [, share account holders] and other creditors thereof funds on deposit with the [purchasing institution] acquiring bank. Prior to the [sale] transfer of all or substantially all of the assets and business of [an institution] a Connecticut bank pursuant to this section, [the selling institution] such bank shall obtain authorization for the [sale] transfer by the affirmative vote of at least: (A) Two-thirds of the voting power of the outstanding shares of each class of stock, whether or not otherwise entitled to vote, in the case of a capital stock Connecticut bank; (B) two-thirds of the voting power of the [members or] depositors, in the case of a mutual savings and loan association; [or a Connecticut credit union; ] and (C) two-thirds of the governing board and two-thirds of the voting power of the corporators, in the case of mutual savings bank, which voting power shall, in any event, be no less than twenty-five corporators.

[(b)] In lieu of [the] such vote, [required by subsection (a) of this section,] the commissioner may certify in writing that the protection of depositors [, share account holders, members] or creditors of the [selling institution] transferring bank requires that the [sale] transfer proceed without delay.

(2) The provisions of this subsection shall not apply to the liquidation of all of the retail deposits of a Connecticut bank pursuant to subsection (e) of section 36a-139b.

[(c)] (3) When a Connecticut bank [or Connecticut credit union has sold and conveyed] has transferred or arranged to [sell and convey] transfer all of its assets and business in accordance with this section, the governing board of [the selling institution] such bank shall, after receiving the approval of the commissioner as provided in subdivision (1) of this subsection, [(a),] send a written notice of such [sale] transfer or proposed [sale] transfer to each of its depositors [, share account holders] and other known creditors and shall cause a copy of such notice to be published in a newspaper published in this state and having a circulation in the town in which the main office of such institution is located. Such notice shall inform the depositors [, share account holders] and creditors of [the selling institution of the sale] such bank of the transfer and of the terms thereof with reference to payment of depositors [, share account holders] and creditors. Such notice may provide that creditors other than depositors [and share account holders] who fail to present their claims to [the selling institution] such bank within four months of the date of the notice shall be forever barred, and that creditors whose claims are presented within the time limited but which are disallowed by [the selling institution] such bank shall commence an action to enforce their claims within three months of receipt of written notice disallowing their claims or be forever barred. Depositors [or share account holders] shall not be required to present claims for deposits [or share accounts] as shown by the records of [the selling institution] such bank.

[(d)] At any time during the liquidation of the affairs of [the selling institution] such bank, the governing board may have the privileges of a business corporation in voluntary dissolution as provided by law.

[(e)] After the claims of depositors [, share account holders] and creditors have been fully paid either by transfer to the [purchasing institution] acquiring bank or in cash, or barred, the liability of the [selling institution] transferring bank for such claims shall cease.

[(f)] Any surplus remaining in the hands of the [selling institution] transferring Connecticut bank, after it has [sold] transferred all its assets and business, shall, after payment of the expenses of liquidation, be distributed to those entitled by law to receive such surplus in the manner provided in the agreement of [sale] transfer. Thereupon the governing board shall file a certificate with the commissioner stating that the affairs of [the institution] such bank have been fully liquidated. Upon verifying the certificate as to the facts stated therein, the commissioner shall endorse the certificate "approved" and shall file a copy in the office of the Secretary of the State. Upon the finding by the Secretary of the State that the certificate complies with law, the secretary shall endorse the same "approved" and record the certificate. Thereupon the corporate existence of [the institution] such bank shall cease.

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

[(h)] (c) No bank or out-of-state bank may [purchase or otherwise] acquire all or a significant part of the assets [and] or business of a Connecticut bank or Connecticut credit union from the receiver of such bank or credit union without the approval of the commissioner.

Sec. 7. Section 36a-412 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(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 in accordance with section 36a-145, as amended by this act.

(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. Such establishment shall not take place unless 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 establish a de novo branch in the home state of such out-of-state bank, provided the commissioner may waive such reciprocity requirement for the establishment of a de novo branch the activities of which are limited to the exercise of fiduciary or trust powers if the commissioner finds that such establishment will result in net new benefits to this state. Any request for such waiver of reciprocity submitted by an out-of-state bank shall include a detailed statement of the reasons for the request and statistical and other information to support a finding of such net new benefits. Any such establishment shall be effected in accordance with and subject to the filing requirements and any limitations imposed by section 36a-145, as amended by this act. 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, as amended by this act, 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 in accordance with section 36a-145, as amended by this act, provided the activities of such additional branches of an out-of-state bank for which the commissioner waived such reciprocity requirement shall be limited to the exercise of fiduciary or trust powers. As used in this subdivision, "net new benefits" means (i) initial capital investments, including any new construction, (ii) 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, (iii) the potential for increasing state and municipal tax revenues from increased economic activity and increased employment, (iv) consumer and business services and other benefits to the state, local community and citizens, and (v) such other matters as the commissioner may deem necessary or advisable.

(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) Except as provided in this section, the laws of this state shall apply to any branch in this state of an out-of-state bank to the same extent as such laws would apply if the branch were a federal bank, provided the following laws shall apply to any branch in this state of an out-of-state bank to the same extent as such laws apply to a branch of a Connecticut bank: (i) Community reinvestment laws including sections 36a-30 to 36a-33, inclusive, (ii) consumer protection laws including sections 36a-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-718, inclusive, 36a-725, 36a-726, 36a-755 to 36a-759, inclusive, 36a-770 to 36a-788, inclusive, and 36a-800 to 36a-810, inclusive, (iii) fair lending laws including sections 36a-16, 36a-737, 36a-740 and 36a-741, and (iv) branching laws including sections 36a-23 and 36a-145, as amended by this act.

(B) Except as provided in this section, 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 (i) if such activity is permissible under the laws of the home state of such out-of-state bank, and (ii) to the same extent as such activity is permissible for either a Connecticut bank or a branch in this state of a federally-chartered out-of-state bank. 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.

(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 pursuant to regulations adopted by the commissioner in accordance with chapter 54 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. [The] 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.

(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.

Sec. 8. Section 36a-296 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) (1) No bank, Connecticut credit union, or federal credit union shall establish any deposit or share account in which deposits or shares are to be held by one natural person in trust for another natural person unless the depositor or share account holder provides the bank, Connecticut credit union, or federal credit union with the name and a residential address for the beneficiary, upon establishing the deposit or share account or thereafter at the request of the bank, Connecticut credit union, or federal credit union. The depositor or share account holder may also provide the bank, Connecticut credit union, or federal credit union with a writing signed by the depositor or share account holder specifying the terms of the trust under which such deposit or share account is to be held. Unless such writing specifies to the contrary, it shall be conclusively presumed that the depositor or share account holder intends to create a trust of all funds credited to the deposit or share account from time to time upon the following terms: (A) The depositor or share account holder during the depositor's or share account holder's life may withdraw, or authorize charges against, such funds; (B) if the depositor or share account holder survives the named beneficiary, the named beneficiary's death shall terminate the trust and title to the deposit or share account shall thereupon vest in the depositor or share account holder free and clear of the trust; (C) if the named beneficiary survives the depositor or share account holder, the depositor's or share account holder's death shall terminate the trust and title to the deposit account or share account, subject to any membership restrictions for Connecticut credit unions or federal credit unions, shall thereupon vest in the named beneficiary free and clear of the trust. (2) Any bank, Connecticut credit union, or federal credit union shall be fully protected in making payment of any moneys credited to such deposit or share account in accordance with the terms of such signed writing or, in the event such writing does not specify to the contrary, in accordance with the presumptions contained in this subsection that are applicable, and the title of any person to any moneys credited to such deposit or share account and the effect of such signed writing with respect to the deposit or share account or, in the event such writing does not specify to the contrary, the effect of the presumptions contained in this subsection shall not be denied, abridged or in any way affected because such signed writing was not executed in accordance with, or otherwise fails to comply with, the laws of this state prescribing the requirements to effect a valid testamentary disposition of property or because of any absence of delivery or compliance with other requirements to effect a valid gift or transfer in trust. (3) The provisions of this subsection do not apply to deposit or share accounts accompanied by a writing of the type described in subsection (b) of this section or to any deposit or share account opened primarily for business or professional purposes, including, but not limited to, escrow accounts, trust accounts and clients' funds accounts.

(b) In the case of a deposit or share account established or maintained with a bank, Connecticut credit union, or federal credit union by a trustee under a will or trust agreement or under the terms of some other written document, or by a trustee pursuant to statute or order of a court, the trustee shall provide the bank, Connecticut credit union, or federal credit union with a writing identifying such will, agreement, other written document, statute or order; and any moneys credited to a deposit or share account with respect to which the trustee has filed such a writing shall be paid only to or upon the order of such trustee or of the successor trustee. If the trustee is serving in such capacity under a will, trust agreement or other written document, a certified copy of such document shall be filed by the depositor or share account holder if at any time requested by the bank, Connecticut credit union, or federal credit union but such bank, Connecticut credit union, or federal credit union shall not be charged with notice, actual or constructive, of the contents of such will, trust agreement, or other written document. Such bank, Connecticut credit union, or federal credit union shall be fully protected in paying over any moneys credited to such deposit or share account to or upon the order of the trustee establishing or maintaining the deposit or share account or the successor trustee and shall be under no duty to inquire into the application of funds so paid.

(c) (1) Subsection (a) of this section applies to all deposit accounts governed by its provisions established (A) on or after June 13, 1963, and (B) prior to that date if the depositor when establishing such deposit account or at any time thereafter provides a writing meeting the requirements of subsection (a) of this section. Subsection (b) of this section applies to all deposit accounts governed by its provisions whether such deposit accounts were established prior to June 13, 1963, or are established on or after that date.

(2) Subsection (a) of this section applies to all share accounts governed by its provisions which are established at Connecticut credit unions and federal credit unions (A) on or after October 1, 2001, and (B) prior to that date if the [depositor] share account holder when establishing such share account or at any time thereafter provides a writing meeting the requirements of subsection (a) of this section. Subsection (b) of this section applies to all share accounts governed by its provisions whether such share accounts were established prior to October 1, 2001, or are established on or after that date.

Sec. 9. Subsection (a) of section 36a-333 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) To secure public deposits, each qualified public depository shall at all times maintain, segregated from its other assets as provided in subsection (b) of this section, eligible collateral in an amount at least equal to the following percentage of public deposits held by the depository: (1) For any qualified public depository having a risk-based capital ratio of ten per cent or greater, a sum equal to ten per cent of all public deposits held by the depository; (2) for any qualified public depository having a risk-based capital ratio of less than ten per cent but greater than or equal to eight per cent, a sum equal to twenty-five per cent of all public deposits held by the depository; (3) for any qualified public depository having a risk-based capital ratio of less than eight per cent but greater than or equal to three per cent, a sum equal to one hundred per cent of all public deposits held by the depository; [and] (4) for any qualified public depository having a risk-based capital ratio of less than three per cent, and, notwithstanding the provisions of subdivisions (1) to (3), inclusive, of this subsection, for any qualified public depository which has been conducting business in this state for a period of less than two years except for a qualified public depository that is a successor institution to a qualified public depository which conducted business in this state for two years or more, a sum equal to one hundred and twenty per cent of all public deposits held by the depository; provided, the qualified public depository and the public depositor may agree on an amount of eligible collateral to be maintained by the depository that is greater than the minimum amounts required under subdivisions (1) to (4), inclusive, of this subsection; (5) notwithstanding the risk-based capital ratio provisions of subdivisions (1) to (3), inclusive, of this subsection, for any qualified public depository that is an uninsured bank, as defined in subdivision (1) of subsection (t) of section 36a-70, a sum equal to one hundred twenty per cent of all public deposits held by the depository; and (6) notwithstanding the risk-based capital ratio provisions of subdivisions (1) to (3), inclusive, of this subsection, for any qualified public depository that is subject to an order to cease and desist, or has entered into a stipulation and agreement, or a letter of understanding and agreement with a bank or credit union supervisor, a sum equal to one hundred twenty per cent of all public deposits held by the depository, provided, the qualified public depository and the public depositor may agree on an amount of eligible collateral to be maintained by the depository that is greater than the minimum amounts required under subdivisions (1) to (6), inclusive, of this subsection. For purposes of this subsection, the amount of all public deposits held by the depository shall be determined based on either the public deposits reported on the most recent quarterly call report or the average of the public deposits reported on the four most recent quarterly call reports, whichever amount is greater. For purposes of this subsection, the depository's risk-based capital ratio shall be determined, in accordance with applicable federal regulations and regulations adopted by the commissioner in accordance with chapter 54, based on the most recent quarterly call report, provided (A) if, during any calendar quarter after the issuance of such report, the depository experiences a decline in its risk-based capital ratio to a level that would require the depository to maintain a higher amount of eligible collateral under subdivisions (1) to (4), inclusive, of this subsection, the depository shall increase the amount of eligible collateral maintained by it to the minimum required under subdivisions (1) to (4), inclusive, of this subsection based on such lower risk-based capital ratio and shall notify the commissioner of its actions; and (B) if, during any calendar quarter after the issuance of such report, the commissioner reasonably determines that the depository's risk-based capital ratio is likely to decline to a level that would require the depository to maintain a higher amount of eligible collateral under subdivisions (1) to (4), inclusive, of this subsection, the commissioner may require that the depository increase the amount of eligible collateral maintained by it to the minimum required under subdivisions (1) to (4), inclusive, of this subsection based on the commissioner's determination of such lower risk-based capital ratio.

Sec. 10. Subsection (b) of section 36a-139b of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(b) The converting bank shall file with the commissioner a proposed plan of conversion, a copy of the proposed amended 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.

Sec. 11. Section 36a-435b of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

As used in sections 36a-435a to 36a-472a, inclusive, unless the context otherwise requires:

(1) "Branch" means any office of a Connecticut credit union at a fixed location, other than the main office, at which shares or deposits are received, share drafts or checks are paid, or money is lent;

(2) "Capital" means undivided earnings, regular reserves, other special purpose reserves, donated equity, and accumulated, unrealized gains or losses on securities in accordance with generally accepted accounting principles;

(3) "Certificate of incorporation" means the certificate of incorporation of a Connecticut credit union and includes in the case of Connecticut credit unions in existence on July 1, 1975, articles of association, articles of incorporation and certificates of organization;

(4) "Corporate", when used in conjunction with any institution that is a Connecticut credit union, federal credit union or out-of-state credit union, means a corporate credit union, as defined in 12 CFR 704. 2, as from time to time amended;

(5) "Credit manager" means a natural person approved by the governing board of a Connecticut credit union and employed by such credit union to supervise its lending activities;

(6) "Credit union service organization services" means those services that are authorized for credit union service organizations under state or federal law, and that are closely related to credit union business, are convenient and useful to credit union business, are reasonably related to the operations of a credit union or are financial in nature;

(7) "Director" means a member of the governing board, a director emeritus or an advisory director of a Connecticut credit union;

(8) "Federal Credit Union Act" means 12 USC Section 1751 et seq. , as from time to time amended;

(9) "Financial institution" means any Connecticut credit union, bank, federal credit union, out-of-state bank or out-of-state credit union;

(10) "Immediate family member" means any person related by blood, adoption or marriage to a person within the field of membership of the Connecticut credit union;

(11) "Member" means any person who has been admitted to membership in the Connecticut credit union in accordance with this chapter;

(12) "Member in good standing" means a member who (A) owns at least one membership share in a credit union, (B) is current on all credit obligations to the credit union, and (C) has not caused the credit union a credit or share loss that remains outstanding;

(13) "Membership share" means a share equal to the stated par value of the Connecticut credit union which may not be withdrawn or transferred except upon termination of membership and which confers membership and voting rights on the member;

(14) "Mobile branch" means any office of a Connecticut credit union at which credit union business is conducted, which is in fact moved or transported to one or more predetermined locations in accordance with a predetermined schedule;

[(14)] (15) "Multiple common bond membership" means a field of membership consisting of more than one group of individuals, each of which has, within the group, a common bond of occupation or association;

[(15)] (16) "Officer" means the chairperson, vice chairperson, secretary and treasurer of the governing board of a Connecticut credit union;

[(16)] (17) "Senior management" means the president or chief executive officer, vice president or vice chief executive officer, chief financial officer, credit manager, and any person occupying a similar status or performing a similar function;

[(17)] (18) "Share" means the basic unit of moneys held by a member of a Connecticut credit union in share accounts at a Connecticut credit union on which a dividend may be paid;

[(18)] (19) "Single common bond membership" means a field of membership consisting of one group that has a common bond of occupation or association.

Sec. 12. Section 36a-455a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

A Connecticut credit union may:

(1) Transact a general credit union business and exercise by its governing board or duly authorized members of senior management, subject to applicable law, all such incidental powers as are consistent with its purposes. The express powers authorized for a Connecticut credit union under this section do not preclude the existence of additional powers deemed to be incidental to the transaction of a general credit union business pursuant to this subdivision;

(2) (A) Issue shares to its members and receive payments on shares from its members and from those nonmembers specified in subsection (e) of section 36a-456a, subject to the provisions of sections 36a-290 to 36a-297, inclusive, 36a-330 to 36a-338, inclusive, and section 36a-456a, (B) receive deposits of members and nonmembers subject to provisions of sections 36a-456a and 36a-456b, (C) reduce the amount of its member and nonmember shares and deposits, and (D) expel members and cancel shares in accordance with section 36a-439a;

(3) Make and use its best efforts to make secured and unsecured extensions of credit to its members in accordance with section 36a-265 and sections 36a-457a, 36a-457b and 36a-458a;

(4) Invest its funds in accordance with section 36a-459a;

(5) Declare and pay dividends in accordance with sections 36a-441a and 36a-456c, and pay interest refunds to borrowers;

(6) Act as a finder or agent for the sale of insurance and fixed and variable rate annuities directly, sell insurance and such annuities indirectly through a Connecticut credit union service organization, or enter into arrangements with third-party marketing organizations for the sale by such third-party marketing organizations of insurance or such annuities on the premises of the Connecticut credit union or to members of the Connecticut credit union, provided: (A) Such insurance and annuities are issued or purchased by or from an insurance company licensed in accordance with section 38a-41; and (B) the Connecticut credit union, Connecticut credit union service organization or third-party marketing organization, and any officer and employee thereof, shall be licensed as required by section 38a-769 before engaging in any of the activities authorized by this subdivision. As used in this subdivision, "annuities" and "insurance" have the same meanings as set forth in section 38a-41, except that "insurance" does not include title insurance. The provisions of this subdivision do not authorize a Connecticut credit union or Connecticut credit union service organization to underwrite insurance or annuities;

(7) Borrow money to an amount not exceeding fifty per cent of the total assets of the Connecticut credit union provided the credit union shall give prior notice to the Commissioner of Banking in writing of its intention to borrow amounts in excess of thirty-five per cent of its total assets;

(8) Act as fiscal agent for the federal government, this state or any agency or political subdivision thereof;

(9) Provide loan processing, loan servicing, member check and money order cashing services, disbursement of share withdrawals and loan proceeds, money orders, internal audits, automated teller machine services and other similar services to other Connecticut credit unions, federal credit unions and out-of-state credit unions;

(10) Provide finder services to its members, including the offering of third party products and services through the sale of advertising space on its web site, account statements and receipts, and the sale of statistical or consumer financial information to outside vendors in accordance with sections 36a-40 to 36a-45, inclusive, in order to facilitate the sale of such products to the members of such Connecticut credit union;

(11) With the prior approval of the Commissioner of Banking, exercise fiduciary powers;

(12) Maintain and rent safe deposit boxes within suitably constructed vaults, provided the Connecticut credit union has adequate insurance coverage for losses related to such rental;

(13) Provide certification services, including notary services, signature guaranties, certification of electronic signatures and share draft certifications;

(14) Act as agent (A) in the collection of taxes for any qualified treasurer of any taxing district or qualified collector of taxes, or (B) for any electric, electric distribution, gas, water or telephone company operating within this state in receiving moneys due such company for utility services furnished by it;

(15) Issue and sell securities which (A) are guaranteed by the Federal National Mortgage Association or any other agency or instrumentality authorized by state or federal law to create a secondary market with respect to extensions of credit of the type originated by the Connecticut credit union, or (B) subject to the approval of the Commissioner of Banking, relate to extensions of credit originated by the Connecticut credit union and are guaranteed or insured by a financial guaranty insurance company or comparable private entity;

(16) Establish a charitable fund, either in the form of a charitable trust or a nonprofit corporation to assist in making charitable contributions, provided (A) the trust or nonprofit corporation is exempt from federal income taxation and may accept charitable contributions under Section 501 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, (B) the trust or nonprofit corporation's operations are disclosed fully to the Commissioner of Banking upon request, and (C) the trust department of the credit union or one or more directors or members of senior management of the credit union act as trustees or directors of the fund;

(17) In the discretion of a majority of its governing board, make contributions or gifts to or for the use of any corporation, trust or community chest, fund or foundation created or organized under the laws of the United States or of this state and organized and operated exclusively for charitable, educational or public welfare purposes, or of any hospital which is located in this state and which is exempt from federal income taxes and to which contributions are deductible under Section 501(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended;

(18) [Sell] Subject to the provisions of section 36a-455b, as amended by this act, sell, pledge or assign any or all of its outstanding extensions of credit to any other lending institution, credit union service organization or quasi-governmental entity and any government-sponsored enterprise, and act as collecting, remitting and servicing agent in connection with any such extension of credit and charge for its acts as agent. Any such credit union may purchase the minimum amount of capital stock of such entity or enterprise if required by that entity or enterprise to be purchased in connection with the sale, pledge or assignment of extensions of credit to that entity or enterprise and may hold and dispose of such stock, provided that with respect to purchases of stock of a credit union service organization, the Connecticut credit union shall not exceed the limitations of section 36a-459a. A Connecticut credit union may purchase one or more outstanding extensions of credit from any other lending institution and any federally-recognized Native American tribe, provided there exists a formal written agreement with tribal government to permit the credit union to service and collect on such extensions of credit;

(19) [Sell] Subject to the provisions of sections 36a-455b, as amended by this act, sell a participating interest in any or all of its outstanding extensions of credit to and purchase a participating interest in any or all of the outstanding extensions of credit of any financial institution or credit union service organization pursuant to an appropriate written participation and servicing agreement to be signed by all parties involved in such transaction;

(20) With the approval of the Commissioner of Banking, join the Federal Home Loan Bank System and borrow funds as provided under federal law;

(21) [Sell] Subject to the provisions of section 36a-455b, as amended by this act, sell all or part of its assets, other than extensions of credit, to other lending institutions, purchase all or part of the assets, other than extensions of credit, of other lending institutions, and assume all or part of the shares and the liabilities of any other credit union or out-of-state credit union;

(22) With the prior written approval of the Commissioner of Banking, engage in closely related activities, unless the Commissioner of Banking determines that any such activity shall be conducted by a credit union service organization of the Connecticut credit union, utilizing such organizational, structural or other safeguards as the Commissioner of Banking may require, in order to protect the Connecticut credit union from exposure to loss. As used in this subdivision, "closely related activities" means those activities that are closely related, convenient and necessary to the business of a Connecticut credit union, are reasonably related to the operation of a Connecticut credit union or are financial in nature including, but not limited to, business and professional services, data processing, courier and messenger services, credit-related activities, consumer services, services related to real estate, financial consulting, tax planning and preparation, community development activities, or any activities reasonably related to such activities;

(23) With the approval of the Commissioner of Banking, engage in any activity that a federal credit union or out-of-state credit union may be authorized to engage in under state or federal law. The application for such approval shall be in writing and shall include a description of the activity, a description of the financial impact of the activity on the Connecticut credit union, citation of the legal authority to engage in the activity under state or federal law, a description of any limitations or restrictions imposed on such activity under state or federal law, and any other information that the Commissioner of Banking may require. The Commissioner of Banking shall approve or disapprove such activity not later than thirty days after the application filed is complete. The Commissioner of Banking may impose any limitations or conditions to ensure that any such activity is conducted in a safe and sound manner with adequate consumer protections. The provisions of this subdivision do not authorize a Connecticut credit union or a Connecticut credit union service organization to sell title insurance.

Sec. 13. Section 36a-455b of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) A Connecticut credit union may, with the approval of the commissioner, [sell all or] transfer all or a significant part of its assets [in accordance with the provisions of section 36a-210] as provided in subdivisions (18), (19) and (21) of section 36a-455a, as amended by this act, or transfer all or a significant part of its assets or business to a bank, a Connecticut credit union or a federal credit union. The commissioner shall not approve such transfer if the acquirer, including all insured depository institutions which are affiliates of the acquirer, 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 transferring credit union and the acquirer shall file with the commissioner a written agreement describing the terms and conditions of the transaction, and such additional information as may be required by the commissioner. Such agreement shall be approved and executed by a majority of the governing board of the transferring credit union and of the acquirer, provided if the acquirer does not have a governing board, the agreement may be executed by a person authorized to execute the agreement on behalf of the acquirer. Payment for all or part of the assets and business of the transferring credit union may be made in cash or by making available on demand to share account holders and other creditors thereof funds on deposit with the acquirer. The commissioner may require the transferring credit union to obtain authorization for the transfer by the affirmative vote of at least a majority of the members of such credit union. A Connecticut credit union that transfers all of its assets and business shall comply with the provisions of section 36a-470a.

(b) A Connecticut credit union may, with the approval of the commissioner, sell a branch.

(c) No Connecticut credit union may acquire all or a significant part of the assets or business of a federal credit union without the approval of the commissioner. Such Connecticut credit union shall file with the commissioner an application that includes a copy of any notice, application and other information filed with any federal credit union regulator in connection with such acquisition and such additional information as may be required by the commissioner.

Sec. 14. Section 36a-462a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) (1) No Connecticut credit union shall establish a branch in this state or outside of this state unless prior to such establishment the credit union has filed with the Commissioner of Banking an application to establish a branch. [and such application has not been disapproved by] The Connecticut credit union may establish such branch unless the Commissioner of Banking disapproves the application not later than thirty days after the application has been filed with the Commissioner of Banking.

[(b)] The Commissioner of Banking may disapprove an application to establish a branch if the Commissioner of Banking finds that: [(1)] (A) Establishment of the proposed branch is inconsistent with safety and soundness; [(2)] (B) establishment of the proposed branch is inconsistent with the Connecticut credit union's field of membership; [(3)] (C) in the case of a Connecticut credit union whose membership is limited to persons with a single common bond or multiple common bond, [establishment of the proposed branch will result in an impermissible overlap with the field of membership of other credit unions] the establishment of the proposed branch will result in an oversaturation of credit unions in the town in which the branch is to be located; [(4)] (D) in the case of a Connecticut credit union whose membership is limited to a well-defined community, neighborhood or rural district, [(A)] (i) the proposed branch is not generally accessible to the public, [(B) the] (ii) establishment of the proposed branch will result in an oversaturation of financial institutions in the town in which the branch is to be located, or [(C)] (iii) such credit union does not have a record of compliance with the requirements of sections 36a-37 to 36a-37e, inclusive; or [(5)] (E) in the case of an out-of-state branch, the laws of such other state do not authorize the establishment of such branch.

[(c)] Except as provided in [subsection (b) of this section] this subdivision, a Connecticut credit union may establish or operate a branch in the same or approximately the same location as another financial institution, provided any such institution's insurable accounts or deposits are federally insured.

[(d) (1)] (2) (A) A Connecticut credit union that proposes to close a branch within or outside of this state shall submit to the Commissioner of Banking a notice of the proposed closing as soon as possible but not less than thirty days prior to the closing date. The notice shall include a detailed statement of the reasons for the decision to close the branch.

[(2)] (B) The Connecticut credit union shall provide notice of the proposed closing to its members by:

[(A)] (i) Posting such notice in a conspicuous manner on the premises of the branch proposed to be closed at least thirty days prior to the closing, and

[(B)] (ii) Including such notice in at least one regular account statement mailed to its members who utilize the branch proposed to be closed, or in a separate mailing to such members at least thirty days prior to the closing date.

[(e)] (3) With the approval of the Commissioner of Banking, any Connecticut credit union may relocate any branch within this state in accordance with such notice and other requirements as the Commissioner of Banking may prescribe. As used in this [subsection] subdivision, "relocate" means to move within the same immediate neighborhood without substantially affecting the nature of the business or members served.

(b) (1) No Connecticut credit union shall establish a mobile branch in this state or outside of this state unless prior to such establishment the credit union has filed with the commissioner an application to establish a mobile branch listing each predetermined location. The Connecticut credit union may establish such mobile branch unless the commissioner disapproves the application not later than thirty days after the application has been filed with the commissioner. The commissioner may disapprove an application for a mobile branch if the commissioner makes such findings under subdivision (1) of subsection (a) of this section as the commissioner deems necessary. A mobile branch shall be conspicuously identified as a branch of a Connecticut credit union.

(2) A Connecticut credit union that proposes to close any mobile branch shall 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.

(3) A Connecticut credit union that proposes to close any predetermined location of a mobile branch shall notify the commissioner prior to the closing of such location.

[(f)] (c) The Commissioner of Banking may examine and supervise the out-of-state branches of any Connecticut credit union and may enter into agreements with other state or federal credit union regulators concerning such examination or supervision. Any such agreement may include provisions concerning the assessment or sharing of fees for such examination or supervision.

Sec. 15. Section 36a-462b of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) (1) An out-of-state, state-chartered credit union may, with the prior written approval of the Commissioner of Banking, establish a branch in this state, provided the laws of [such state] the state in which the out-of-state, state-chartered credit union is organized authorize under conditions no more restrictive than those imposed by the laws of this state as determined by the Commissioner of Banking, a Connecticut credit union to establish a branch in that state. The Commissioner of Banking shall not grant approval unless the Commissioner of Banking determines that such out-of-state credit union: (A) Is financially solvent; (B) maintains share insurance as required under the Federal Credit Union Act; and (C) is effectively examined and supervised by an official of the state in which it is [chartered] organized. The Commissioner of Banking may disapprove the establishment of any such branch if any of the reasons specified in subsection [(b)] (a) of section 36a-462a, as amended by this act, if applied to an out-of-state, state-chartered credit union, exists. An out-of-state, state-chartered credit union that has established a branch in this state may, with the approval of the Commissioner of Banking, establish additional branches in this state in accordance with this section.

(2) An out-of-state, federally-chartered credit union may, with prior written notice to the Commissioner of Banking, establish a branch or additional branches in this state. A federal credit union may, with prior written notice to the Commissioner of Banking, establish additional branches in this state.

(b) The Commissioner of Banking may examine and supervise the Connecticut branches of any out-of-state, state-chartered credit union and may enter into agreements with other state or federal credit union regulators concerning such examinations or supervision. Any such agreement may include provisions concerning the assessment or sharing of fees for such examination or supervision.

(c) The Commissioner of Banking may, after giving notice and an opportunity to be heard to any out-of-state, state-chartered credit union, revoke or suspend the approval given to such out-of-state credit union to establish a branch in this state for any reason that would be sufficient grounds to deny an application to establish a branch in this state.

(d) With prior written approval of the commissioner, an out-of-state, state-chartered credit union may expand its field of membership to add members in this state, provided the laws of the state in which the out-of-state credit union is organized authorize, under conditions no more restrictive than those imposed by the laws of this state as determined by the commissioner, a Connecticut credit union to expand its field of membership located in that state, and the proposed field of membership has been approved by the state in which such out-of-state credit union is organized. The commissioner shall not approve such expansion unless the commissioner determines that: (1) Such out-of-state credit union is a credit union organized under laws similar to sections 36a-435a to 36a-472a, inclusive; (2) such out-of-state credit union is financially solvent; (3) such out-of-state credit union has share insurance as provided under the Federal Credit Union Act; (4) such out-of-state credit union is effectively examined and supervised by an official of the state in which it is organized; and (5) any potential harm that the expansion of the field of membership of such out-of-state credit union may have on any Connecticut credit union and its members is clearly outweighed in the public interest by the probable beneficial effect of the expansion in meeting the convenience and needs of the members of the group proposed to be included in the proposed field of membership.

Sec. 16. Subdivision (3) of subsection (b) of section 36a-468a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(3) If the Commissioner of Banking is satisfied that the requirements of this chapter have been complied with, the Commissioner of Banking shall issue an approval of the merger, which approval may contain such terms and conditions as the Commissioner of Banking deems necessary or appropriate. After approval of the merger by the Commissioner of Banking, the resulting credit union shall file a copy of the merger agreement, the plan of merger, the certificate of amendment to its certificate of incorporation, if any, and the Commissioner of Banking's approval in the office of the Secretary of the State. Within ten days after such documents are filed with the Secretary of the State, the resulting credit union shall file with the Commissioner of Banking copies of such filed documents, and in the case of a Connecticut credit union that is the resulting credit union, a copy of its amended bylaws, if any. The merger agreement may provide for the effective date of the proposed merger, which shall not be earlier than the filing of the agreement and the approval of the commissioner in the office of the Secretary of the State. If the agreement does not provide for an effective date, the merger shall become effective on the date of the filing of the agreement and approval in the office of the Secretary of the State.

Sec. 17. Subdivision (4) of subsection (a) of section 36a-469c of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(4) In the case of a converting Connecticut credit union, the plan of conversion shall require the approval of a majority of the governing board. After approving the plan of conversion, the governing board of the converting Connecticut credit union shall establish the date and time of a regular or special meeting of members for vote on the proposal. Written notice of the meeting at which the proposal is to be considered together with a mail ballot and a disclosure statement shall be hand-delivered or mailed to each member, at such member's last-known address as shown on the records of the converting Connecticut credit union, not more than thirty days nor less than fourteen days prior to the date of the meeting. The disclosure statement shall include, at a minimum, a description of (A) the reasons for the proposed conversion; (B) the differences between membership rights in the converting credit union and depositor rights in the proposed mutual savings bank, mutual savings and loan association or mutual community bank; and (C) the significant differences between the authorized powers of the converting credit union and those of the proposed mutual savings bank, mutual savings and loan association or mutual community bank. The notice, disclosure statement and mail ballot [shall comply with the requirements of Appendix A to 12 CFR Part 708a, as from time to time amended, and] shall be submitted to the commissioner for approval prior to distribution to members. Each member of the converting Connecticut credit union may cast one vote on the proposal. The affirmative vote of two-thirds of all the members voting, including those votes cast in person and those ballots properly completed and received by the converting Connecticut credit union prior to the time of the meeting, shall be required for approval of the conversion.

Sec. 18. Section 35-2 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

No partnership, common law trust or association, or individual using a trade name, shall use, either as a part of its name or as a prefix or suffix thereto or as a designation of the business carried on by it, the word "bank", "banking", "banker", "bankers", "trust" or "savings", provided either the word "bankers" or the word "trust" may be so used when qualified and immediately preceded by the word "investment", but not followed by the word "company" or "corporation". The provisions of this section shall not apply to any charitable or athletic association. No provision of this section shall prevent any association organized under the provisions of section [36a-85] 36a-70 from using the term "savings" either as a part of its name or as a prefix or suffix thereto or as a designation of the business carried on by it.

Sec. 19. Section 52-565a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2003):

(a) A drawer negotiating a check who knows or should know that payment of such check will be refused by the drawee bank either because the drawer has no account with such bank or because the drawer has insufficient funds on deposit with such bank shall be liable to the payee for damages, in addition to the face amount of the check, provided the payee has presented such check for payment, the check is dishonored and the drawer fails to pay the face amount of such check within thirty days following the date of mailing by the payee of the written demand for payment as provided in subsection (f) of this section.

(b) In the case of a drawer negotiating a check who knows or should know that payment of such check will be refused by the drawee bank because the drawer has no account with such bank, such damages shall be in an amount to be determined by the court in light of the circumstances, but in no event shall such amount be greater than the face amount of the check or seven hundred fifty dollars, whichever is less.

(c) In the case of a drawer negotiating a check who knows or should know that payment of such check will be refused by the drawee bank because the drawer has insufficient funds on deposit with such bank, such damages shall be in an amount to be determined by the court in light of the circumstances, but in no event shall such amount be greater than the face amount of the check or four hundred dollars, whichever is less.

(d) The drawer shall not be liable to the payee for the damages provided for by this section if: (1) The drawer gave such check as payment for residential service supplied by a gas, electric, steam, telephone or water utility; (2) the drawer gave such check as payment for the rental of residential premises; or (3) the drawer gave such check as repayment of all, or a portion of, a debt secured by collateral which the payee has repossessed.

(e) The damages provided for in this section shall be available only to those persons or entities which post or otherwise give conspicuous notice to the public of the damages which may be imposed pursuant to this section. Such notice shall set forth: (1) The damages that may be imposed if a check is dishonored; (2) the section of the general statutes authorizing imposition of such damages; and (3) that criminal penalties also may apply.

(f) The written demand for payment on the dishonored check shall be in the form prescribed by subsection (g) of this section and shall be sent to the drawer's last-known residence address or last-known place of business (1) by first class mail and [by] certified mail return receipt requested with delivery restricted to the drawer, [on] or (2) by first class mail or regular mail supported by an affidavit of service by mail. Such written demand for payment shall be sent on or after the date the payee received notice that such check had been dishonored. Such affidavit of service by mail shall provide substantially as follows:

 

STATE OF

)

AFFIDAVIT OF SERVICE

   

)

BY MAIL

 

COUNTY OF

)

 

...., being first duly sworn on oath, deposes and states that he/she is of legal age and that on (date) ...., 20.., he/she served the attached Written Demand for Payment, by placing a true and correct copy thereof securely enclosed in an envelope addressed as follows:

....

....

....

....

and deposited the same, with postage prepaid, in the United States mails at ...., .....

....

(Signature)

Subscribed and sworn to before me this .... day of ...., 20...

....

Notary Public

.... County, ....

(SEAL)

(g) The written demand for payment required by subsection (f) of this section shall be printed in at least ten-point type in both English and Spanish and shall include the following: (1) The name and last-known address of the drawer; (2) the amount and date of the dishonored check; (3) the bank upon which the check was drawn; (4) the name of the payee; (5) the reason the check was dishonored; (6) the address to which payment should be delivered; and (7) an explanation of the damages which may be imposed pursuant to this section in the event the drawer fails to pay the face amount of the dishonored check.

(h) The penalties provided for in this section shall not apply to any check for which payment has been stopped by the drawer or to any check where the drawer has raised a reasonable defense with respect to the validity of the underlying debt.

(i) Notwithstanding the provisions of this section, in the case of a drawer who negotiates a check which is dishonored, the payee or its assignee may impose on the drawer a service charge of up to twenty dollars, provided, no such service charge may be imposed if (1) the drawer has stopped payment on the check, (2) the check was stolen, or (3) the drawer has raised a reasonable defense with respect to the validity of the underlying debt. The drawer shall not be liable under this subsection for more than one such service charge for each dishonored check.

Sec. 20. Subsection (d) of section 36a-459a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(d) A Connecticut credit union may, subject to the provisions of subsections (e), [and] (f) and (g) of section 36a-461a, invest its funds in or make loans to credit union service organizations provided (1) the total of any such investment in or loan to any one credit union service organization does not exceed two per cent of the total assets of the credit union without regard to the amount derived from the profitability of such credit union service organization, and (2) the credit union shall file with the Commissioner of Banking prior written notice of its intention to make such investment or loan. The Connecticut credit union may make such investment or loan unless the Commissioner of Banking disapproves such investment or loan not later than thirty business days after the notice is filed.

Sec. 21. Subsections (a) and (b) of section 49-8a of the general statutes are repealed and the following is substituted in lieu thereof (Effective July 1, 2003):

(a) For purposes of this section and section 49-10a:

(1) "Mortgage loan" means a loan secured by a mortgage on one, two, three or four family residential real property located in the state of Connecticut, including but not limited to, a residential unit in any common interest community as defined in section 47-202.

(2) "Person" means an individual, corporation, limited liability company, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency, or other legal or commercial entity.

(3) "Mortgagor" means the grantor of a mortgage.

(4) "Mortgagee" means the grantee of a mortgage; provided, if the mortgage has been assigned of record, "mortgagee" means the last person to whom the mortgage has been assigned of record; provided further, if the mortgage has been serviced by a mortgage servicer, "mortgagee" means the mortgage servicer.

(5) "Mortgage servicer" means the last person to whom the mortgagor has been instructed by the mortgagee to send payments of the mortgage loan. The person who has transmitted a payoff statement shall be deemed to be the mortgage servicer with respect to the mortgage loan described in that payoff statement.

(6) "Attorney-at-law" means any person admitted to practice law in this state and in good standing.

(7) "Title insurance company" means any corporation or other business entity authorized and licensed to transact the business of insuring titles to interests in real property in this state.

(8) "Institutional payor" means any bank or lending institution that, as part of making a new mortgage loan, pays off the previous mortgage loan.

[(8)] (9) "Payoff statement" means a statement of the amount of the unpaid balance on a mortgage loan, including principal, interest and other charges properly assessed pursuant to the loan documentation of such mortgage and a statement of the interest on a per diem basis with respect to the unpaid principal balance of the mortgage loan.

(b) If a mortgagee fails to execute and deliver a release of mortgage to the mortgagor or to the mortgagor's designated agent within sixty days from receipt by the mortgagee of payment of the mortgage loan (1) in accordance with the payoff statement furnished by the mortgagee, or (2) if no payoff statement was provided pursuant to a request made under section 49-10a, in accordance with a good faith estimate by the mortgagor of the amount of the unpaid balance on the mortgage loan using (A) a statement from the mortgagee indicating the outstanding balance due as of a date certain, and (B) a reasonable estimate of the per diem interest and other charges due, any attorney-at-law or duly authorized officer of either a title insurance company or an institutional payor may, on behalf of the mortgagor or any successor in interest to the mortgagor who has acquired title to the premises described in the mortgage or any portion thereof, execute and cause to be recorded in the land records of each town where the mortgage was recorded, an affidavit which complies with the requirements of this section.

Approved June 26, 2003