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statutes is repealed and the following is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