Substitute Senate Bill No. 904
          Substitute Senate Bill No. 904

              PUBLIC ACT NO. 97-209


AN  ACT  CONCERNING THE ESTABLISHMENT OF COMMUNITY
BANKS    AND    COMMUNITY    DEVELOPMENT    BANKS,
REQUIREMENTS  FOR  THE ORGANIZATION OF CONNECTICUT
BANKS AND  THE  CONVERSION  OF  CREDIT  UNIONS  TO
BANKS.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section   1.  Section  36a-3  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    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.
    "Advance  fee".  Sections 36a-510, 36a-485 and
36a-615.
    "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.
    "Applicant". Section 36a-736.
    "Associate". Section 36a-184.
    "Bank". Section 36a-30.
    "Bankers' bank". Section 36a-70.
    "Banking business". Section 36a-425.
    "Billing cycle". Section 36a-565.
    "Bona  fide  nonprofit  organization". Section
36a-655.
    "Branch". Sections 36a-145 and 36a-410.
    "Broker". Section 36a-510.
    "Business     and    Industrial    Development
Corporation". Section 36a-626.
    "Cash advance". Section 36a-564.
    "Cash price". Section 36a-770.
    "Certificate    of    organization".   Section
36a-435.
    "Collective  managing agency account". Section
36a-365.
    "Commercial vehicle". Section 36a-770.
    "COMMUNITY  BANK".  SECTION 36a-70, AS AMENDED
BY SECTION 3 OF THIS ACT.
    "COMMUNITY  DEVELOPMENT BANK". SECTION 36a-70,
AS AMENDED BY SECTION 3 OF THIS ACT.
    "Connecticut    holding    company".   Section
36a-410.
    "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.
    "Controlling interest". Section 36a-276.
    "Credit". Sections 36a-645 and 36a-676.
    "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.
    "De novo branch". Section 36a-410.
    "Debt". Section 36a-645.
    "Debt adjustment". Section 36a-655.
    "Debt mutual fund". Section 36a-275.
    "Debt securities". Section 36a-275.
    "Deliver". Section 36a-316.
    "Deposit". Section 36a-316.
    "Deposit account". 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.
    "Earning period". Section 36a-316.
    "Eligible account holder". Section 36a-136.
    "Eligible collateral". Section 36a-330.
    "Equity mutual fund". Section 36a-276.
    "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-155, 36a-316, 36a-330 and 36a-736.
    "Financial records". Section 36a-41.
    "First   mortgage   loan".  Sections  36a-485,
36a-705 and 36a-715.
    "Fiscal year". Section 36a-435.
    "Foreign    banking    corporation".   Section
36a-425.
    "General facility". Section 36a-580.
    "Goods". Sections 36a-535 and 36a-770.
    "Graduated  payment  mortgage  loan".  Section
36a-265.
    "Groups  having a common bond of occupation or
association". Section 36a-435.
    "Guardian". Section 36a-365.
    "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". Section 36a-435.
    "Instalment  loan  contract". Sections 36a-535
and 36a-770.
    "Instrument". Section 36a-596.
    "Insurance bank". Section 36a-285.
    "Insurance department". Section 36a-285.
    "Interest". Section 36a-316.
    "Interest rate". Section 36a-316.
    "Lender". Sections 36a-510 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.
    "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.
    "Member". Section 36a-435.
    "Membership share". Section 36a-435.
    "Money order". Section 36a-596.
    "Mortgage broker". Section 36a-485.
    "Mortgage insurance". Section 36a-725.
    "Mortgage   lender".   Sections   36a-485  and
36a-705.
    "Mortgage    loan".   Sections   36a-261   and
36a-265.
    "Mortgage rate lock-in". Section 36a-705.
    "Mortgage    servicing    company".    Section
36a-715.
    "Mortgagor". Section 36a-715.
    "Motor vehicle". Section 36a-770.
    "Municipality". Section 36a-800.
    "Net worth". Section 36a-596.
    "Network". Section 36a-155.
    "Note account". Sections 36a-301 and 36a-445.
    "Office". Section 36a-316.
    "Open-end credit plan". Section 36a-676.
    "Open-end loan". Section 36a-565.
    "Organization". Section 36a-800.
    "Out-of-state    holding   company".   Section
36a-410.
    "Outstanding". Section 36a-596.
    "Passbook savings account". Section 36a-316.
    "Periodic statement". Section 36a-316.
    "Permissible investment". Section 36a-596.
    "Person". Section 36a-184.
    "Post". Section 36a-316.
    "Prime quality". Section 36a-596.
    "Principal   amount   of  the  loan".  Section
36a-510.
    "Principal officer". Section 36a-485.
    "Processor". Section 36a-155.
    "Public deposit". Section 36a-330.
    "Purchaser". Section 36a-596.
    "Qualified      public     depository"     and
"depository". Section 36a-330.
    "Records". Section 36a-17.
    "Relocate". Section 36a-145.
    "Residential property". Section 36a-485.
    "Retail buyer". Sections 36a-535 and 36a-770.
    "Retail credit transaction". Section 42-100b.
    "Retail    instalment    contract".   Sections
36a-535 and 36a-770.
    "Retail  instalment  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 loan". Section 36a-510.
    "Security    convertible    into    a   voting
security". Section 36a-184.
    "Share". Section 36a-435.
    "Social purpose investment". Section 36a-277.
    "Standard mortgage loan". Section 36a-265.
    "Tax  and  loan account". Sections 36a-301 and
36a-445.
    "The  Savings  Bank  Life  Insurance Company".
Section 36a-285.
    "Time account". Section 36a-316.
    "Transaction". Section 36a-215.
    "Travelers check". Section 36a-596.
    "Troubled   financial   institution".  Section
36a-215.
    "Unsecured loan". Section 36a-615.
    Sec.  2.  Subsection  (d) of section 36a-65 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (d)   (1)   The   fee  for  investigating  and
processing each application is as follows:
    (A)  Establishment  of  a  branch  or  limited
branch, sale of a branch or relocation of  a  main
office   of   a  Connecticut  bank,  two  thousand
dollars, except in the case of a conversion from a
branch to a limited branch and a limited branch to
a branch, a  reasonable  fee  not  to  exceed  two
thousand dollars.
    (B)  Relocation of a branch, one thousand five
hundred dollars.
    (C)  Establishment  and  use  of  a  satellite
device, one hundred fifty dollars.
    (D)   Merger,   consolidation  or  acquisition
under section 36a-125 or 36a-181, or  purchase  of
assets or assumption of liabilities, other than by
a  Connecticut  credit  union  or  federal  credit
union,  under  section  36a-210, two thousand five
hundred dollars if two institutions  are  involved
and   five  thousand  dollars  if  three  or  more
institutions are involved.
    (E)   Organization   of  a  Connecticut  bank,
fifteen thousand dollars, except in the case of an
interim bank, two thousand dollars.
    (F)   Reorganization   of   a  mutual  savings
institution into a mutual  holding  company,  five
thousand dollars.
    (G)  Conversions  under  sections  36a-135  to
36a-138, inclusive,  five  thousand  dollars,  AND
CONVERSIONS  UNDER  SECTION  5  OF  THIS  ACT, TWO
THOUSAND FIVE HUNDRED DOLLARS.
    (2)  The  fee for investigating and processing
each acquisition  statement  filed  under  section
36a-184, two thousand five hundred dollars.
    (3)   The  fee  for  processing  a  notice  of
closing  of  a  branch  or   limited   branch,   a
reasonable fee not to exceed two thousand dollars.
    (4)  The fee for miscellaneous investigations,
one hundred dollars per day.
    Sec.   3.   Section   36a-70  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)  One  or   more  persons  may  organize  a
Connecticut bank.
    (b)  Any  such   Connecticut  bank,  except  a
Connecticut bank organized to function solely in a
fiduciary capacity, shall commence business with a
minimum equity capital  of  at  least five million
dollars.  Any  Connecticut   bank   organized   to
function  solely in  a  fiduciary  capacity  shall
commence business with a minimum equity capital of
at least two  million dollars. Such equity capital
shall be paid  for  in cash before any Connecticut
bank  commences business.  For  purposes  of  this
section,  nonwithdrawable  accounts   and  pledged
deposits  of  mutual   savings  banks  and  mutual
savings  and loan  associations  shall  constitute
capital of such  mutual  banks and associations to
the extent that  such accounts or deposits have no
fixed maturity date,  cannot  be  withdrawn at the
option of the  account  holders  and  do  not earn
interest that carries over to subsequent periods.
    (c)  The  person   or   persons  organizing  a
Connecticut bank shall  execute,  acknowledge  and
file  with  the  commissioner  an  application  to
organize.  Such  application   to  organize  shall
include:   (1)   A    proposed    certificate   of
incorporation stating: (A)  The  name  and type of
the Connecticut bank;  (B)  the  town in which the
main office is to be located; (C) in the case of a
capital  stock  Connecticut   bank,   the  amount,
authorized number and par value, if any, of shares
of its capital  stock;  (D)  the minimum amount of
equity capital with  which  the  Connecticut  bank
shall commence business,  which amount may be less
than its authorized  capital but shall not be less
than  that required  by  subsection  (b)  of  this
section; (E) the  name,  occupation and residence,
post office or  business address of each organizer
and   prospective   initial    director   of   the
Connecticut bank; [(2)  a feasibility study; (3) a
proposed  business  plan;  and  (4)  a  three-year
financial forecast prepared  by a certified public
accounting  firm  or   other   professional   firm
approved by the  commissioner]  AND (2) A PROPOSED
BUSINESS  PLAN. The  organizers  shall  separately
file  with  the   commissioner  a  notice  of  the
residence  of  each   organizer   and  prospective
initial director whose  residence  address  is not
included   in   the    proposed   certificate   of
incorporation.
    (d) Within twenty  days  after  receipt of the
application to organize,  the  commissioner  shall
[(1) order an  independent feasibility study or an
independent  review  of   the   feasibility  study
submitted  by  the   organizers   as  provided  in
subsection (e), or  (2) issue an order designating
a  time  and   place   for   a   hearing  on  such
application,  which  hearing   shall  be  held  in
accordance with chapter  54,  not less than thirty
nor more than  sixty  days  from  receipt  of such
application.   Any   exhibit    or   documentation
submitted to the commissioner by the organizers at
the  time  of  filing  other  than  the  financial
statements or biographical information relating to
the individual organizers,  shall be available for
public inspection prior to such hearing unless the
commissioner determines that  good cause exists to
keep such exhibit  or  documentation confidential]
ORDER,  AT  THE  EXPENSE  OF  THE  ORGANIZERS,  AN
INDEPENDENT FEASIBILITY STUDY  AND  AN INDEPENDENT
THREE-YEAR  FINANCIAL  FORECAST   PREPARED   BY  A
CERTIFIED   PUBLIC  ACCOUNTING   FIRM   OR   OTHER
PROFESSIONAL FIRM DESIGNATED BY THE COMMISSIONER.
    (e) [The commissioner may order an independent
feasibility study or  an independent review of the
feasibility study submitted  by the organizers, if
the commissioner deems  it  advisable  in order to
consider the factors  and  make the determinations
as required by  subsection  (h)  of this section.]
Upon receipt of the feasibility study [or findings
of the review]  AND FINANCIAL FORECAST REQUIRED BY
SUBSECTION (d) OF  THIS  SECTION, the commissioner
shall issue an  order designating a time and place
for a hearing  on  the  application.  Such hearing
shall be held  in  accordance  with chapter 54 not
more  than  thirty   days  from  receipt  of  such
feasibility study [or findings of such review] AND
FINANCIAL FORECAST. A  copy  of  such  feasibility
study [or findings  of  such  review shall be made
available  to  the   organizers  and,  unless  the
commissioner determines good  cause exists to keep
it confidential, shall  be  available  for  public
inspection prior to  such  hearing]  AND FINANCIAL
FORECAST   SHALL  BE   MADE   AVAILABLE   TO   THE
ORGANIZERS. ANY EXHIBIT OR DOCUMENTATION SUBMITTED
TO THE COMMISSIONER  BY THE ORGANIZERS AT THE TIME
OF FILING OR  BY  THE PREPARER OR PREPARERS OF THE
FEASIBILITY STUDY AND  FINANCIAL  FORECAST,  OTHER
THAN   FINANCIAL   STATEMENTS   AND   BIOGRAPHICAL
INFORMATION RELATING TO THE INDIVIDUAL ORGANIZERS,
SHALL BE AVAILABLE  FOR PUBLIC INSPECTION PRIOR TO
SUCH HEARING UNLESS  THE  COMMISSIONER  DETERMINES
THAT GOOD CAUSE EXISTS TO KEEP ANY SUCH EXHIBIT OR
DOCUMENTATION CONFIDENTIAL.
    (f) The organizers shall cause to be published
a   copy   of    the   proposed   certificate   of
incorporation and the  time  and place set for the
hearing once a  week  for  three consecutive weeks
prior to the  date  of the hearing, in a newspaper
designated by the  commissioner  published  in the
town where the main office of the Connecticut bank
is to be  located  or,  if  there  is no newspaper
published in such  town,  in  a newspaper having a
circulation  therein; and  a  like  copy  sent  by
registered  or  certified   mail,  return  receipt
requested,  to each  bank  and  out-of-state  bank
having its main  office  or a branch in such town,
not less than  twenty  [nor  more than forty] days
prior to the hearing.
    (g)  For applications  to  organize  bank  and
trust companies and  capital  stock savings banks,
the commissioner shall  notify the State Treasurer
and State Comptroller of the time and place of the
hearing.
    (h) (1) The approving authority shall consider
the following factors  before granting a temporary
certificate of authority:  (A)  The  population of
the area to  be served by the proposed Connecticut
bank;  (B)  the   adequacy   of  existing  banking
facilities  in  the  area  to  be  served  by  the
proposed Connecticut bank; (C) the convenience and
necessity   to  the   public   of   the   proposed
facilities; and (D)  the  character and experience
of the proposed  directors  and  officers. (2) The
application shall be  approved  if  the  approving
authority determines: (A) That the interest of the
public  will  be   served   to  advantage  by  the
establishment of the  proposed  Connecticut  bank;
(B) that conditions  in  the locality in which the
proposed  bank  will   transact   business  afford
reasonable promise of  successful  operation;  and
(C) that the  proposed  directors possess capacity
and fitness for  the  duties  and responsibilities
with which they  will be charged. (3) For purposes
of this section, the approving authority shall be,
in the case  of  an application to organize a bank
and trust company or a capital stock savings bank,
a majority of  the  commissioner, State Treasurer,
and State Comptroller,  and,  in  the  case  of an
application to organize a mutual savings bank or a
mutual  or  capital   stock   savings   and   loan
association, the commissioner acting alone.
    (i) If the  application  is  approved  by  the
approving authority, a  temporary  certificate  of
authority, valid for  eighteen  months,  shall  be
issued  to  the  organizers  authorizing  them  to
complete the organization of the Connecticut bank.
The organizers shall  thereupon  file  one copy of
the temporary certificate  of  authority  and  one
copy of the  certificate of incorporation with the
Secretary of the  State.  The  approving authority
may, upon the application of the organizers before
the termination of  the  eighteen-month period and
after a hearing  thereon,  extend,  for cause, the
period  for which  the  temporary  certificate  of
authority is valid.
    (j) If the  application is not approved by the
approving  authority,  the   approving   authority
shall, in writing, so notify the organizers.
    (k) An appeal  from  the decision approving or
disapproving  the  application  may  be  taken  in
accordance with chapter 54.
    (l) The approving  authority shall cause to be
made an examination  of  the  proposed Connecticut
bank upon notice  from  the  organizers  that  the
following  conditions  have   occurred:   (1)  The
proposed bank has  been  fully organized according
to law; (2)  the State Treasurer has been paid the
franchise  tax  and   filing   fee   specified  in
subsection (o) of  this  section; (3) the proposed
bank  has  raised   the   minimum  equity  capital
required;  and (4)  in  the  case  of  a  proposed
capital stock Connecticut  bank,  a certified list
of each subscriber  who will own at least five per
cent of any  class  of  voting  securities  of the
proposed bank, showing  the number of shares owned
by each, has  been filed with the commissioner. If
all provisions of  law  have been complied with, a
final certificate of  authority  to  commence  the
business for which the bank was organized shall be
issued  by  the  approving  authority,  EXCEPT  AS
PROVIDED IN SUBDIVISION  (5)  OF SUBSECTION (r) OF
THIS SECTION. One  copy  of  the final certificate
shall be filed  with  the  Secretary of the State,
one copy shall  be  retained  by the bank, and one
copy shall be retained by the commissioner.
    (m) The reasonable  charges  and  expenses  of
organization or reorganization  of a capital stock
Connecticut bank, and  the  reasonable expenses of
any  compensation  or   discount   for  the  sale,
underwriting or purchase  of  its  shares,  may be
paid or allowed  by such bank out of the par value
received by it  for  its shares, or in the case of
shares  without  par  value,  out  of  the  stated
capital received by  it  for  its  shares, without
rendering  such  shares   not   fully   paid   and
nonassessable.
    (n) The Connecticut  bank  shall  not commence
business until a  final  certificate  of authority
has been issued  in accordance with subsection (l)
of this section  and,  except  in  the  case  of a
Connecticut bank organized to function solely in a
fiduciary capacity or  an interim Connecticut bank
organized  pursuant  to  subsection  (p)  of  this
section, until its  insurable accounts or deposits
are  insured  by  the  Federal  Deposit  Insurance
Corporation   or   its   successor   agency.   The
acceptance  of subscriptions  for  deposits  by  a
mutual savings bank  or  mutual  savings  and loan
association  as  may   be   necessary   to  obtain
insurance  by  the   Federal   Deposit   Insurance
Corporation or its  successor  agency shall not be
considered   to   be   commencing   business.   No
Connecticut bank other  than  a  Connecticut  bank
organized  to  function   solely  in  a  fiduciary
capacity may exercise  any of the fiduciary powers
granted to Connecticut  banks by law until express
authority  therefor  has   been   given   by   the
commissioner.
    (o)  Prior  to   the   issuance   of  a  final
certificate of authority  to  commence business in
accordance with subsection  (l)  of  this section,
the  Connecticut  bank  shall  pay  to  the  State
Treasurer a franchise  tax, together with a filing
fee of twenty dollars for the required papers. The
franchise tax for a mutual savings bank and mutual
savings  and  loan  association  shall  be  thirty
dollars. The franchise  tax  for all capital stock
Connecticut banks shall  be  one cent per share of
the authorized capital stock.
    (p)  One  or  more  persons  may  organize  an
interim  Connecticut  bank   solely  (1)  for  the
acquisition  of  an   existing  bank,  whether  by
acquisition of stock,  of  assets, or by merger or
consolidation,  or (2)  to  facilitate  any  other
corporate transaction authorized  by this title in
which the commissioner  has  determined  that such
transaction has adequate regulatory supervision to
justify the organization of an interim Connecticut
bank.  Such interim  Connecticut  bank  shall  not
accept deposits or  otherwise  commence  business.
Subsections (d), (f),  (g),  (h)  and  (o) of this
section shall not  apply to the organization of an
interim bank, provided  the  commissioner  may, in
the  commissioner's discretion,  order  a  hearing
under subsection (d)  or  require  that organizers
publish  or  mail   the  proposed  certificate  of
incorporation or both. The approving authority for
an  interim  Connecticut   bank   shall   be   the
commissioner  acting  alone.   If   the  approving
authority determines that  the organization of the
interim Connecticut bank  complies with applicable
law,  the  approving   authority   shall  issue  a
temporary certificate of  authority conditioned on
the approval by the appropriate supervisory agency
of the corporate transaction for which the interim
Connecticut bank is formed.
    (q) (1) As  used in this subsection, "bankers'
bank" means a  Connecticut  bank that is (A) owned
exclusively  by  any   combination   of  banks  or
out-of-state banks having  their  principal office
in   Connecticut,   Maine,    Massachusetts,   New
Hampshire, New York,  Rhode  Island or Vermont and
(B) organized to  engage  exclusively in providing
services  for such  other  banks  or  out-of-state
banks and their directors, officers and employees.
    (2)  One  or   more  persons  may  organize  a
bankers' bank in accordance with the provisions of
this section, except  that subsections (g) and (h)
of this section  shall  not  apply.  The approving
authority  for  a   bankers'  bank  shall  be  the
commissioner  acting  alone.   Before  granting  a
temporary certificate of  authority in the case of
an application to  organize  a  bankers' bank, the
approving authority shall consider (A) whether the
proposed  bankers'  bank   will   facilitate   the
provision  of  services   that   such   banks   or
out-of-state banks would  not otherwise be able to
readily  obtain,  and   (B)   the   character  and
experience of the proposed directors and officers.
The application to  organize a bankers' bank shall
be approved if  the approving authority determines
that the interest  of  the public will be directly
or  indirectly  served   to   advantage   by   the
establishment of the  proposed  bankers' bank, and
the  proposed  directors   possess   capacity  and
fitness for the  duties  and responsibilities with
which they will be charged.
    (3) A bankers'  bank  shall  have  all  of the
powers  of  and   be   subject   to   all  of  the
requirements  applicable  to  a  Connecticut  bank
under this title  which  are not inconsistent with
this subsection, except:  (A)  A bankers' bank may
provide  services  only   for   other   banks   or
out-of-state banks having  their  principal office
in Maine, Massachusetts,  New Hampshire, New York,
Rhode Island or  Vermont  and  for  the directors,
officers   and  employees   of   such   banks   or
out-of-state banks; (B)  only  such other banks or
out-of-state banks, or  both,  may own the capital
stock of or  otherwise  invest in a bankers' bank;
(C) upon the  written request of the organizers of
a  bankers'  bank,   the  commissioner  may  waive
specific  requirements  of   this  title  and  the
regulations adopted thereunder if the commissioner
finds that (i)  the requirement pertains primarily
to banks that  provide  retail or consumer banking
services and is inconsistent with this subsection,
and (ii) the requirement may impede the ability of
the bankers' bank to compete or to provide desired
services to its  market  provided, any such waiver
and  the  commissioner's   findings  shall  be  in
writing and shall  be  made  available  for public
inspection;  and  (D)  the  commissioner  may,  by
regulation, limit the powers that may be exercised
by a bankers' bank.
    (4) The commissioner may adopt regulations, in
accordance  with chapter  54,  to  administer  the
provisions of this subsection.
    (r) (1) AS USED IN THIS SUBSECTION AND SECTION
4  OF  THIS   ACT,   "COMMUNITY   BANK"   MEANS  A
CONNECTICUT BANK THAT  IS  ORGANIZED  PURSUANT  TO
THIS SUBSECTION AND  IS  SUBJECT TO THE PROVISIONS
OF THIS SUBSECTION AND SECTION 4 OF THIS ACT.
    (2)  ONE  OR   MORE  PERSONS  MAY  ORGANIZE  A
COMMUNITY BANK IN  ACCORDANCE  WITH THE PROVISIONS
OF THIS SECTION,  EXCEPT  THAT  SUBSECTION  (g) OF
THIS SECTION SHALL  NOT  APPLY. ANY SUCH COMMUNITY
BANK SHALL COMMENCE BUSINESS WITH A MINIMUM EQUITY
CAPITAL OF AT  LEAST THREE MILLION DOLLARS. IN THE
CASE OF A CAPITAL STOCK COMMUNITY BANK, NO PERSON,
WHETHER ACTING INDIVIDUALLY  OR  IN  CONCERT  WITH
OTHERS, SHALL SUBSCRIBE FOR, PURCHASE OR OTHERWISE
ACQUIRE, BY MERGER,  ACQUISITION  OR OTHERWISE, IN
EXCESS OF NINE  AND  NINE-TENTHS  PER  CENT OF THE
CAPITAL STOCK OF THE BANK. THE APPROVING AUTHORITY
FOR A COMMUNITY  BANK  SHALL  BE  THE COMMISSIONER
ACTING ALONE. IN  ADDITION  TO  THE CONSIDERATIONS
AND DETERMINATIONS REQUIRED  BY  SUBSECTION (h) OF
THIS   SECTION,  BEFORE   GRANTING   A   TEMPORARY
CERTIFICATE OF AUTHORITY  TO  ORGANIZE A COMMUNITY
BANK, THE APPROVING AUTHORITY SHALL DETERMINE THAT
(A) EACH OF  THE  PROPOSED  DIRECTORS AND PROPOSED
EXECUTIVE OFFICERS, AS DEFINED IN SUBPARAGRAPH (D)
OF SUBDIVISION (3)  OF  THIS SUBSECTION, POSSESSES
CAPACITY   AND  FITNESS   FOR   THE   DUTIES   AND
RESPONSIBILITIES  WITH  WHICH   SUCH  DIRECTOR  OR
OFFICER  WILL  BE   CHARGED   AND   (B)  THERE  IS
SATISFACTORY COMMUNITY SUPPORT  FOR  THE  PROPOSED
COMMUNITY BANK BASED  ON  EVIDENCE OF SUCH SUPPORT
PROVIDED  BY  THE   ORGANIZERS  TO  THE  APPROVING
AUTHORITY. IF THE  APPROVING AUTHORITY CANNOT MAKE
SUCH  DETERMINATION  WITH   RESPECT  TO  ANY  SUCH
PROPOSED DIRECTOR OR  PROPOSED  EXECUTIVE OFFICER,
THE APPROVING AUTHORITY  MAY  REFUSE TO ALLOW SUCH
PROPOSED DIRECTOR OR PROPOSED EXECUTIVE OFFICER TO
SERVE IN SUCH  CAPACITY  IN THE PROPOSED COMMUNITY
BANK.
    (3) A COMMUNITY  BANK  SHALL  HAVE  ALL OF THE
POWERS  OF  AND   BE   SUBJECT   TO   ALL  OF  THE
REQUIREMENTS  AND  LIMITATIONS   APPLICABLE  TO  A
CONNECTICUT BANK UNDER  THIS  TITLE  WHICH ARE NOT
INCONSISTENT WITH THIS  SUBSECTION, EXCEPT: (A) NO
COMMUNITY  BANK  MAY   (i)  EXERCISE  ANY  OF  THE
FIDUCIARY POWERS GRANTED  TO  CONNECTICUT BANKS BY
LAW  UNTIL EXPRESS  AUTHORITY  THEREFOR  HAS  BEEN
GIVEN BY THE  APPROVING  AUTHORITY, (ii) ESTABLISH
AND  MAINTAIN ONE  OR  MORE  MUTUAL  FUNDS,  (iii)
INVEST  IN  DERIVATIVE   SECURITIES   OTHER   THAN
MORTGAGE  BACKED SECURITIES  FULLY  GUARANTEED  BY
GOVERNMENTAL  AGENCIES  OR   GOVERNMENT  SPONSORED
AGENCIES, (iv) OWN ANY REAL ESTATE FOR THE PRESENT
OR FUTURE USE  OF  THE  BANK  UNLESS THE APPROVING
AUTHORITY  FINDS,  BASED   ON   AN   INDEPENDENTLY
PREPARED ANALYSIS OF  COSTS  AND BENEFITS, THAT IT
WOULD BE LESS COSTLY TO THE BANK TO OWN INSTEAD OF
LEASE SUCH REAL ESTATE, OR (v) MAKE MORTGAGE LOANS
SECURED   BY  NONRESIDENTIAL   REAL   ESTATE   THE
AGGREGATE  AMOUNT  OF   WHICH,   AT  THE  TIME  OF
ORIGINATION, EXCEEDS TEN PER CENT OF ALL ASSETS OF
SUCH BANK; (B)  THE  AGGREGATE AMOUNT OF ALL LOANS
MADE BY A  COMMUNITY  BANK SHALL NOT EXCEED EIGHTY
PER CENT OF  THE TOTAL DEPOSITS HELD BY SUCH BANK;
(C) (i) THE  TOTAL  DIRECT OR INDIRECT LIABILITIES
OF ANY ONE  OBLIGOR,  WHETHER OR NOT FULLY SECURED
AND  HOWEVER  INCURRED,  TO  ANY  COMMUNITY  BANK,
EXCLUSIVE  OF  SUCH   BANK'S   INVESTMENT  IN  THE
INVESTMENT SECURITIES OF  SUCH  OBLIGOR, SHALL NOT
EXCEED AT THE  TIME  INCURRED  TEN PER CENT OF THE
EQUITY CAPITAL AND  RESERVES  FOR  LOAN  AND LEASE
LOSSES OF SUCH  BANK, AND (ii) THE LIMITATIONS SET
FORTH IN SUBSECTION  (a)  OF SECTION 36a-262 SHALL
APPLY   TO  THIS   SUBPARAGRAPH;   AND   (D)   THE
LIMITATIONS SET FORTH IN SUBSECTION (a) OF SECTION
36a-263  SHALL  APPLY   TO  ALL  COMMUNITY  BANKS,
PROVIDED, A COMMUNITY BANK MAY (i) MAKE A MORTGAGE
LOAN TO ANY  DIRECTOR OR EXECUTIVE OFFICER SECURED
BY PREMISES OCCUPIED  OR  TO  BE  OCCUPIED BY SUCH
DIRECTOR OR OFFICER  AS  A PRIMARY RESIDENCE, (ii)
MAKE  AN  EDUCATIONAL  LOAN  TO  ANY  DIRECTOR  OR
EXECUTIVE OFFICER FOR  THE  EDUCATION OF ANY CHILD
OF SUCH DIRECTOR  OR  EXECUTIVE OFFICER, AND (iii)
EXTEND CREDIT TO ANY DIRECTOR OR EXECUTIVE OFFICER
IN AN AMOUNT  NOT  EXCEEDING  TEN THOUSAND DOLLARS
FOR   EXTENSIONS   OF    CREDIT    NOT   OTHERWISE
SPECIFICALLY AUTHORIZED IN  THIS SUBPARAGRAPH. THE
AGGREGATE AMOUNT OF  ALL  LOANS  OR  EXTENSIONS OF
CREDIT MADE BY  A  COMMUNITY BANK PURSUANT TO THIS
SUBPARAGRAPH  SHALL NOT  EXCEED  THIRTY-THREE  AND
ONE-THIRD  PER CENT  OF  THE  EQUITY  CAPITAL  AND
RESERVES FOR LOAN  AND  LEASE LOSSES OF SUCH BANK.
AS USED IN  THIS SUBPARAGRAPH, "EXECUTIVE OFFICER"
MEANS  EVERY  OFFICER  OF  A  COMMUNITY  BANK  WHO
PARTICIPATES  OR  HAS  AUTHORITY  TO  PARTICIPATE,
OTHER THAN IN THE CAPACITY OF A DIRECTOR, IN MAJOR
POLICY-MAKING FUNCTIONS OF THE BANK, REGARDLESS OF
WHETHER SUCH OFFICER  HAS  AN  OFFICIAL  TITLE  OR
WHETHER  SUCH OFFICER  SERVES  WITHOUT  SALARY  OR
OTHER  COMPENSATION.  THE  VICE  PRESIDENT,  CHIEF
FINANCIAL OFFICER, SECRETARY  AND  TREASURER  OF A
COMMUNITY  BANK  ARE   PRESUMED  TO  BE  EXECUTIVE
OFFICERS UNLESS, BY  RESOLUTION  OF  THE GOVERNING
BOARD OR BY THE BANK'S BYLAWS, ANY SUCH OFFICER IS
EXCLUDED FROM PARTICIPATION IN MAJOR POLICY-MAKING
FUNCTIONS,  OTHER  THAN   IN  THE  CAPACITY  OF  A
DIRECTOR OF THE  BANK,  AND  SUCH OFFICER DOES NOT
ACTUALLY   PARTICIPATE  IN   MAJOR   POLICY-MAKING
FUNCTIONS.
    (4) THE AUDIT AND EXAMINATION REQUIREMENTS SET
FORTH  IN  SECTION  36a-86  SHALL  APPLY  TO  EACH
COMMUNITY BANK.
    (5) ANY ORGANIZERS WHO FILED AN APPLICATION TO
ORGANIZE A CONNECTICUT  BANK  UNDER  THIS  SECTION
PRIOR TO NOVEMBER  1,  1996,  AND  HAVE  NOT  BEEN
ISSUED OR DENIED  A FINAL CERTIFICATE OF AUTHORITY
UNDER SUBSECTION (l) OF THIS SECTION, AND WHO GIVE
NOTICE  TO  THE   APPLICABLE  APPROVING  AUTHORITY
SPECIFIED IN SUBSECTION  (h)  OF THIS SECTION THAT
THE PROPOSED BANK  HAS RAISED EQUITY CAPITAL IN AN
AMOUNT NOT LESS  THAN  THREE  MILLION DOLLARS, MAY
AMEND  SUCH  APPLICATION   TO  AN  APPLICATION  TO
ORGANIZE A COMMUNITY  BANK  UNDER THIS SUBSECTION.
SUCH  ORGANIZERS  SHALL   FILE   (A)   AN  AMENDED
CERTIFICATE OF INCORPORATION  LIMITING  THE POWERS
OF  THE PROPOSED  BANK  IN  ACCORDANCE  WITH  THIS
SUBSECTION, (B) AN AMENDED PROPOSED BUSINESS PLAN,
(C) AN AMENDED  FEASIBILITY  STUDY, (D) AN AMENDED
THREE-YEAR  FINANCIAL  FORECAST   PREPARED   BY  A
CERTIFIED   PUBLIC  ACCOUNTING   FIRM   OR   OTHER
PROFESSIONAL FIRM APPROVED  BY  THE  COMMISSIONER,
AND (E) EVIDENCE  SATISFACTORY  TO  THE  APPROVING
AUTHORITY  UNDER THIS  SUBSECTION  THAT  THERE  IS
COMMUNITY SUPPORT FOR THE PROPOSED COMMUNITY BANK.
WITHIN TWENTY DAYS  AFTER  RECEIPT  OF THE AMENDED
FEASIBILITY STUDY, THE  COMMISSIONER  MAY,  AT THE
EXPENSE OF THE  ORGANIZERS,  ORDER  AN INDEPENDENT
FEASIBILITY STUDY. THE  APPROVING  AUTHORITY UNDER
THIS SUBSECTION SHALL  MAKE THE CONSIDERATIONS AND
DETERMINATIONS REQUIRED BY SUBDIVISION (2) OF THIS
SUBSECTION. IF THE AMENDED APPLICATION IS APPROVED
BY THE APPROVING  AUTHORITY  UNDER THIS SUBSECTION
AND  THE ORGANIZERS  HAVE  GIVEN  NOTICE  TO  SAID
APPROVING  AUTHORITY  THAT   THE  REQUIREMENTS  OF
SUBSECTION (l) OF  THIS  SECTION  HAVE BEEN MET, A
FINAL  CERTIFICATE  OF   AUTHORITY   TO   COMMENCE
BUSINESS AS A  COMMUNITY  BANK  SHALL BE ISSUED BY
THE APPROVING AUTHORITY UNDER THIS SUBSECTION.
    (6) THE COMMISSIONER MAY ADOPT REGULATIONS, IN
ACCORDANCE  WITH CHAPTER  54,  TO  ADMINISTER  THE
PROVISIONS OF THIS  SUBSECTION  AND  SECTION  4 OF
THIS ACT.
    (s) (1) AS USED IN THIS SUBSECTION, "COMMUNITY
DEVELOPMENT BANK" MEANS A CONNECTICUT BANK THAT IS
ORGANIZED  TO  SERVE   THE   BANKING  NEEDS  OF  A
WELL-DEFINED  NEIGHBORHOOD,  COMMUNITY   OR  OTHER
GEOGRAPHIC AREA AS DETERMINED BY THE COMMISSIONER,
PRIMARILY,   BUT  NOT   EXCLUSIVELY,   BY   MAKING
COMMERCIAL LOANS IN  AMOUNTS  OF ONE HUNDRED FIFTY
THOUSAND DOLLARS OR LESS TO EXISTING BUSINESSES OR
TO PERSONS SEEKING TO ESTABLISH BUSINESSES LOCATED
WITHIN SUCH NEIGHBORHOOD,  COMMUNITY OR GEOGRAPHIC
AREA.
    (2)  ONE  OR   MORE  PERSONS  MAY  ORGANIZE  A
COMMUNITY DEVELOPMENT BANK  IN ACCORDANCE WITH THE
PROVISIONS OF THIS SECTION, EXCEPT THAT SUBSECTION
(g) OF THIS SECTION SHALL NOT APPLY. THE APPROVING
AUTHORITY FOR A  COMMUNITY  DEVELOPMENT BANK SHALL
BE  THE  COMMISSIONER   ACTING   ALONE.  ANY  SUCH
COMMUNITY DEVELOPMENT BANK SHALL COMMENCE BUSINESS
WITH A MINIMUM  EQUITY  CAPITAL  DETERMINED BY THE
COMMISSIONER TO BE  APPROPRIATE  FOR  THE PROPOSED
ACTIVITIES  OF  SUCH   BANK,   PROVIDED,  IF  SUCH
PROPOSED  ACTIVITIES INCLUDE  ACCEPTING  DEPOSITS,
SUCH MINIMUM EQUITY CAPITAL SHALL BE SUFFICIENT TO
ENABLE SUCH DEPOSITS  TO BE INSURED BY THE FEDERAL
DEPOSIT  INSURANCE CORPORATION  OR  ITS  SUCCESSOR
AGENCY.
    (3)  THE  STATE,   ACTING  THROUGH  THE  STATE
TREASURER,  MAY  BE   THE   SOLE  ORGANIZER  OF  A
COMMUNITY DEVELOPMENT BANK OR MAY PARTICIPATE WITH
ANY OTHER PERSON OR PERSONS IN THE ORGANIZATION OF
ANY COMMUNITY DEVELOPMENT BANK, AND MAY OWN ALL OR
A PART OF  ANY  CAPITAL  STOCK  OF  SUCH  BANK. NO
APPLICATION   FEE   SHALL    BE   REQUIRED   UNDER
SUBPARAGRAPH (E) OF  SUBDIVISION (1) OF SUBSECTION
(d) OF SECTION  36a-65, AS AMENDED BY SECTION 2 OF
THIS ACT, AND  NO  FRANCHISE TAX SHALL BE REQUIRED
UNDER  SUBSECTION (o)  OF  THIS  SECTION  FOR  ANY
COMMUNITY  DEVELOPMENT BANK  ORGANIZED  BY  OR  IN
PARTICIPATION WITH THE STATE.
    (4)  IN ADDITION  TO  THE  CONSIDERATIONS  AND
DETERMINATIONS REQUIRED BY  SUBSECTION (h) OF THIS
SECTION, BEFORE GRANTING  A  TEMPORARY CERTIFICATE
OF AUTHORITY TO  ORGANIZE  A COMMUNITY DEVELOPMENT
BANK, THE APPROVING AUTHORITY SHALL DETERMINE THAT
(A) EACH OF  THE  PROPOSED  DIRECTORS AND PROPOSED
EXECUTIVE OFFICERS POSSESSES  CAPACITY AND FITNESS
FOR THE DUTIES  AND  RESPONSIBILITIES  WITH  WHICH
SUCH DIRECTOR OR  OFFICER  WILL BE CHARGED AND (B)
THERE IS SATISFACTORY  COMMUNITY  SUPPORT  FOR THE
PROPOSED  COMMUNITY  DEVELOPMENT   BANK  BASED  ON
EVIDENCE  OF  SUCH   SUPPORT   PROVIDED   BY   THE
ORGANIZERS  TO THE  APPROVING  AUTHORITY.  IF  THE
APPROVING AUTHORITY CANNOT MAKE SUCH DETERMINATION
WITH RESPECT TO  ANY  SUCH  PROPOSED  DIRECTOR  OR
PROPOSED   EXECUTIVE   OFFICER,    THE   APPROVING
AUTHORITY  MAY  REFUSE   TO  ALLOW  SUCH  PROPOSED
DIRECTOR OR PROPOSED EXECUTIVE OFFICER TO SERVE IN
SUCH   CAPACITY   IN    THE   PROPOSED   COMMUNITY
DEVELOPMENT BANK. AS  USED  IN  THIS  SUBDIVISION,
"EXECUTIVE  OFFICER"  MEANS  EVERY  OFFICER  OF  A
COMMUNITY DEVELOPMENT BANK WHO PARTICIPATES OR HAS
AUTHORITY  TO  PARTICIPATE,   OTHER  THAN  IN  THE
CAPACITY OF A  DIRECTOR,  IN  MAJOR  POLICY-MAKING
FUNCTIONS OF THE  BANK, REGARDLESS OF WHETHER SUCH
OFFICER HAS AN  OFFICIAL  TITLE  OR  WHETHER  SUCH
OFFICER   SERVES   WITHOUT    SALARY    OR   OTHER
COMPENSATION. THE VICE  PRESIDENT, CHIEF FINANCIAL
OFFICER, SECRETARY AND  TREASURER  OF  A COMMUNITY
DEVELOPMENT  BANK ARE  PRESUMED  TO  BE  EXECUTIVE
OFFICERS UNLESS, BY  RESOLUTION  OF  THE GOVERNING
BOARD OR BY THE BANK'S BYLAWS, ANY SUCH OFFICER IS
EXCLUDED FROM PARTICIPATION IN MAJOR POLICY-MAKING
FUNCTIONS,  OTHER  THAN   IN  THE  CAPACITY  OF  A
DIRECTOR OF THE  BANK,  AND  SUCH OFFICER DOES NOT
ACTUALLY   PARTICIPATE  IN   MAJOR   POLICY-MAKING
FUNCTIONS.
    (5) NOTWITHSTANDING ANY  CONTRARY PROVISION OF
THIS TITLE: (A)  THE  COMMISSIONER  MAY  LIMIT THE
POWERS  THAT  MAY  BE  EXERCISED  BY  A  COMMUNITY
DEVELOPMENT  BANK  OR  IMPOSE  CONDITIONS  ON  THE
EXERCISE BY SUCH BANK OF ANY POWER ALLOWED BY THIS
TITLE AS THE  COMMISSIONER  DEEMS NECESSARY IN THE
INTEREST OF THE  PUBLIC  AND  FOR  THE  SAFETY AND
SOUNDNESS  OF  THE   COMMUNITY  DEVELOPMENT  BANK,
PROVIDED, ANY SUCH  LIMITATIONS  OR CONDITIONS, OR
BOTH, SHALL BE  SET FORTH IN THE FINAL CERTIFICATE
OF AUTHORITY ISSUED  IN ACCORDANCE WITH SUBSECTION
(l) OF THIS  SECTION; AND (B) THE COMMISSIONER MAY
WAIVE IN WRITING  ANY  REQUIREMENT  IMPOSED  ON  A
COMMUNITY DEVELOPMENT BANK UNDER THIS TITLE OR ANY
REGULATION  ADOPTED  UNDER   THIS   TITLE  IF  THE
COMMISSIONER  FINDS  THAT   SUCH   REQUIREMENT  IS
INCONSISTENT WITH THE POWERS THAT MAY BE EXERCISED
BY SUCH COMMUNITY DEVELOPMENT BANK UNDER ITS FINAL
CERTIFICATE OF AUTHORITY.
    (6) THE COMMISSIONER MAY ADOPT REGULATIONS, IN
ACCORDANCE  WITH CHAPTER  54,  TO  CARRY  OUT  THE
PROVISIONS OF THIS SUBSECTION.
    Sec. 4. (NEW) (a) Any community bank organized
pursuant to subsection  (r)  of  section 36a-70 of
the general statutes,  as  amended by section 3 of
this  act,  may,   upon   the   approval   of  the
commissioner,  expand  its   powers   and  operate
without the limitations  provided  in  subdivision
(3) of subsection  (r)  of  section  36a-70 of the
general statutes, as  amended by section 3 of this
act.
    (b) A community  bank  that proposes to expand
its powers shall  file  with  the  commissioner  a
proposed plan of expansion, a copy of the proposed
certificate of incorporation  and a certificate by
the  secretary of  the  community  bank  that  the
proposed   plan   of    expansion   and   proposed
certificate of incorporation have been approved in
accordance with subsection (c) of this section.
    (c)  The  proposed   plan   of  expansion  and
proposed   certificate  of   incorporation   shall
require  the  approval   of   a  majority  of  the
governing board of  the  community  bank  and  the
favorable vote of  not less than two-thirds of the
holders of each class of the bank's capital stock,
if any, or,  in  the  case  of  a mutual community
bank, the corporators  thereof,  cast at a meeting
called to consider such expansion.
    (d)  Any  shareholder   of   a  capital  stock
community bank that  proposes to expand its powers
who, on or  before  the  date of the shareholders'
meeting to vote  on such expansion, objects to the
expansion by filing  a  written objection with the
secretary of such  bank may, within ten days after
the effective date of such expansion, make written
demand  upon  the   bank   for   payment  of  such
shareholder's  stock. Any  such  shareholder  that
makes such objection  and  demand  shall  have the
same rights as those of a shareholder who dissents
from the merger  of  two  or  more  capital  stock
Connecticut banks.
    (e) The commissioner,  in  the  commissioner's
discretion,  may hold  a  public  hearing  on  any
proposed plan of expansion under this section.
    (f)   The  commissioner   shall   approve   an
expansion of powers  under  this  section  if  the
commissioner determines that:  (1)  The  community
bank has complied  with  all applicable provisions
of law and  approvals needed for deposit insurance
by the Federal  Deposit  Insurance  Corporation or
its successor agency  have  been obtained; (2) the
community bank has equity capital of at least five
million  dollars;  (3)   the  community  bank  has
received satisfactory ratings  on  its most recent
state or federal  safety and soundness examination
and Community Reinvestment  Act  examination;  and
(4) the proposed  expansion  of  powers will serve
the public necessity and convenience.
    (g)  After  receipt   of   the  commissioner's
approval, the community  bank  shall promptly file
such approval and its certificate of incorporation
with the Secretary  of the State and with the town
clerk of the town in which its principal office is
located. Upon such filing, the bank shall cease to
be a community  bank  subject  to  the limitations
provided in subdivision  (3)  of subsection (r) of
section 36a-70 of the general statutes, as amended
by  section  3   of  this  act,  and  shall  be  a
Connecticut   bank  possessed   of   all   rights,
privileges  and  powers   granted  to  it  by  its
certificate of incorporation and by the provisions
of the general  statutes applicable to its type of
Connecticut bank, and  all of the assets, business
and good will  of  the  community  bank  shall  be
transferred to and vested in such Connecticut bank
without  any deed  or  instrument  of  conveyance,
provided the Connecticut bank may execute any deed
or instrument of  conveyance  as  is convenient to
confirm such transfer. Such Connecticut bank shall
be  subject  to  all  of  the  duties,  relations,
obligations,  trusts  and   liabilities   of   the
community  bank, whether  as  debtor,  depository,
registrar, transfer agent, executor, administrator
or otherwise, and  shall  be  liable  to  pay  and
discharge  all  such  debts  and  liabilities,  to
perform all such  duties in the same manner and to
the same extent  as  if  the  Connecticut bank had
itself incurred the  obligation  or  liability  or
assumed  the  duty  or  relation.  All  rights  of
creditors of the  predecessor  community  bank and
all liens upon  the property of such bank shall be
preserved  unimpaired  and  the  Connecticut  bank
shall be entitled  to  receive,  accept,  collect,
hold  and  enjoy  any  and  all  gifts,  bequests,
devises, conveyances, trusts  and  appointments in
favor of or  in the name of the community bank and
whether made or created to take effect prior to or
after the expansion of powers.
    (h) The persons  named  as  directors  in  the
certificate   of  incorporation   shall   be   the
directors of such Connecticut bank until the first
annual election of  directors  after the expansion
of powers or  until  the expiration of their terms
as directors, and shall have the power to take all
necessary actions and  to  adopt bylaws concerning
the business and  management  of  such Connecticut
bank.
    (i) No such  Connecticut bank may exercise any
of the fiduciary  powers  granted  to  Connecticut
banks by law  until express authority therefor has
been  given  by   the  commissioner,  unless  such
authority   was   previously    granted   to   the
predecessor community bank.
    (j) The franchise  tax  required to be paid by
capital stock Connecticut  banks  upon an increase
of capital stock  shall  be  paid upon the capital
stock of any  such Connecticut bank, provided, any
franchise tax paid  by  the  predecessor community
bank shall be  subtracted  from  any  amount  owed
under this subsection.
    Sec. 5. (NEW)  (a)  (1) Any Connecticut credit
union or federal  credit  union may convert into a
mutual savings bank,  a  mutual  savings  and loan
association,  or  a   mutual  community  bank,  as
defined in subsection (r) of section 36a-70 of the
general statutes, as  amended by section 3 of this
act, in accordance  with  the  provisions  of this
section.
    (2) Any conversion  of  a federal credit union
pursuant to this  section shall be authorized only
if permitted by  federal  law and shall be subject
to all requirements prescribed by federal law.
    (3) The converting  credit  union  shall  file
with the commissioner:  (A)  A  proposed  plan  of
conversion which shall  include  current financial
reports,  current  delinquent  loan  schedules,  a
combined  financial  report   if   applicable,   a
proposed  business plan,  a  three-year  financial
forecast prepared by a certified public accounting
firm or other  professional  firm  approved by the
commissioner, analyses of the regulatory effect of
the conversion brought  about  by  a change in the
regulator, a method  and  schedule for terminating
any  nonconforming activities  that  would  result
from such conversion,  and  a  provision requiring
that for a  period of at least two years after the
effective date of  the  conversion,  the converted
mutual Connecticut bank  shall not pay any fees or
expenses  to  directors   nor   enter   into   any
agreements with directors  or  their affiliates to
provide any products  or services to the converted
mutual  Connecticut  bank;   (B)  a  copy  of  the
proposed certificate of incorporation and proposed
bylaws; and (C)  a certificate by the secretary of
the  converting credit  union  that  the  proposed
conversion  has been  approved  by  the  governing
board  and  the   members,   in   accordance  with
subdivision (4) of  this subsection in the case of
a  converting Connecticut  credit  union,  and  in
accordance with federal  law  in  the  case  of  a
converting federal credit union.
    (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 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.
    (b) The commissioner,  in  the  commissioner's
discretion,  may hold  a  public  hearing  on  any
proposed  plan  of  conversion  filed  under  this
section.
    (c) The commissioner  shall  not  approve  the
conversion  unless  the   commissioner  makes  the
considerations,   determinations   and    findings
required by subsections  (d),  (e) and (f) of this
section.
    (d) The commissioner  shall  not  approve  the
conversion unless the  commissioner  considers the
following factors: (1)  The population of the area
to be served  by  the  proposed mutual Connecticut
bank;  (2)  the   adequacy   of  existing  banking
facilities  in  the  area  to  be  served  by  the
proposed  mutual Connecticut  bank;  and  (3)  the
character and experience of the proposed directors
and officers.
    (e) The commissioner  shall  not  approve  the
conversion  unless  the   commissioner  determines
that: (1) The converting credit union has complied
with all applicable  provisions  of  law;  (2) the
converting  credit union  has  equity  capital  at
least equal to the minimum equity capital required
for  the  organization   of  the  type  of  mutual
Connecticut bank to  which  it  is converting; (3)
the  proposed conversion  will  serve  the  public
necessity and convenience;  (4)  conditions in the
locality in which  the proposed mutual Connecticut
bank  will  transact  business  afford  reasonable
promise  of  successful  operation;  and  (5)  the
proposed directors and  executive officers possess
capacity   and  fitness   for   the   duties   and
responsibilities with which  they will be charged.
If the commissioner cannot make such determination
with respect to  any  such  proposed  director  or
proposed executive officer,  the  commissioner may
refuse to allow such proposed director or proposed
executive officer to serve in such capacity in the
proposed mutual Connecticut  bank. As used in this
subsection,   "executive  officer"   means   every
officer of the  proposed  mutual  Connecticut bank
who participates or  has authority to participate,
other than in the capacity of a director, in major
policy-making  functions of  the  proposed  mutual
Connecticut  bank,  regardless   of  whether  such
officer has an  official  title  or  whether  such
officer's   title  contains   a   designation   of
assistant or whether  such  officer serves without
salary or other  compensation. The vice president,
the  chief  financial   officer,   secretary   and
treasurer of the  proposed mutual Connecticut bank
are presumed to  be executive officers, unless, by
resolution  of  the  governing  board  or  by  the
proposed  mutual Connecticut  bank's  bylaws,  any
such officer is  excluded  from  participation  in
major policy-making functions,  other  than in the
capacity of a  director  of  the  proposed  mutual
Connecticut  bank,  and   such  officer  does  not
actually   participate  in   major   policy-making
functions.
    (f) The commissioner  shall  not  approve  the
conversion unless the  commissioner finds that the
proposed  mutual  Connecticut  bank  will  provide
adequate services to meet the banking needs of all
community    residents,    including    low-income
residents   and   moderate-income   residents   in
accordance with a plan submitted by the converting
credit union to the commissioner, in such form and
containing such information  as  the  commissioner
may require. Upon  receiving  any  such  plan, the
commissioner shall make  the  plan  available  for
public inspection and comment at the Department of
Banking and cause  notice  of  its  submission and
availability  for inspection  and  comment  to  be
published  in the  department's  weekly  bulletin.
With  the concurrence  of  the  commissioner,  the
converting credit union shall publish, in the form
of a legal  advertisement  in a newspaper having a
substantial circulation in  the  area,  notice  of
such plan's submission and availability for public
inspection and comment.  The  notice  shall  state
that the inspection  and  comment period will last
for a period  of  thirty  days  from  the  date of
publication. The commissioner  shall not make such
finding until the  expiration  of  such thirty-day
period. In making  such  finding, the commissioner
shall consider, among  other  factors, whether the
plan identifies specific unmet credit and consumer
banking needs in the local community and specifies
how such needs  will  be  satisfied,  provides for
sufficient distribution of  banking services among
branches or satellite devices, or both, located in
low-income   neighborhoods,   contains    adequate
assurances that banking  services  will be offered
on a nondiscriminatory  basis  and  demonstrates a
commitment to extend  credit  for  housing,  small
business  and  consumer   purposes  in  low-income
neighborhoods.
    (g)  If the  conversion  is  approved  by  the
commissioner   and   the   commissioner   receives
notification from the converting credit union that
all   approvals  required   under   federal   law,
including approvals needed  for  deposit insurance
by the Federal  Deposit  Insurance  Corporation or
its successor agency  have  been obtained and that
any waiting period  prescribed  by federal law has
expired, a certificate  of  authority  to commence
business  shall be  issued  by  the  commissioner.
After receipt of the certificate of authority, the
converting credit union  shall  promptly file such
certificate of authority  and  its  certificate of
incorporation with the  Secretary of the State and
with the town  clerk  of  the  town  in  which its
principal office is located. Upon such filing, the
license  of  the  converting  credit  union  shall
automatically  lapse  and  the  converting  credit
union shall cease  to  be a credit union and shall
become a mutual  savings  bank, mutual savings and
loan association or  mutual community bank, as the
case may be.  Upon  such conversion, the converted
mutual Connecticut bank  shall  possess all of the
rights, privileges and powers granted to it by its
certificate of incorporation and by the provisions
of the general  statutes applicable to the type of
institution into which  it  converted,  and all of
the assets and  business  of the converting credit
union shall be  transferred  to  and  vested in it
without  any deed  or  instrument  of  conveyance,
provided the converting  credit  union may execute
any  deed  or   instrument  of  conveyance  as  is
convenient to confirm such transfer. The converted
mutual Connecticut bank shall be subject to all of
the duties, relations, obligations and liabilities
of the converting credit union, whether as debtor,
depository or otherwise,  and  shall  be liable to
pay and discharge  all such debts and liabilities,
to perform all  such duties in the same manner and
to the same  extent  as  if  the  converted mutual
Connecticut   bank   had   itself   incurred   the
obligation or liability  or  assumed  the  duty or
relation.  All  rights   of   creditors   of   the
converting credit union  and  all  liens  upon the
property of such  credit  union shall be preserved
unimpaired and the  converted  mutual  Connecticut
bank  shall  be   entitled   to  receive,  accept,
collect,  hold  and   enjoy  any  and  all  gifts,
bequests, devises, conveyances and appointments in
favor of or  in  the name of the converting credit
union and whether  made  or created to take effect
prior to or after the conversion.
    (h) Within ninety  days  after the conversion,
the converted mutual Connecticut bank shall record
a certificate, signed by the secretary and stating
that the conversion is effective, in the office of
the town clerk  in  each  town in this state where
the converted mutual  Connecticut  bank  owns real
property.
    (i) The converted  mutual Connecticut bank may
not exercise any  of  the fiduciary powers granted
to  Connecticut  banks   by   law   until  express
authority  therefor  has   been   given   by   the
commissioner.
    (j) The converted  mutual Connecticut bank may
not convert to  a  capital stock bank for a period
of  three  years   following   the   date  of  the
conversion  from a  Connecticut  credit  union  or
federal credit union  to  a  mutual  savings bank,
mutual  savings and  loan  association  or  mutual
community bank, as the case may be.
    Sec. 6. This  act  shall  take effect from its
passage.

Approved June 24, 1997