House Bill No. 5277
House Bill No. 5277
PUBLIC ACT NO. 98-178
AN ACT CONCERNING BANK INVESTMENTS.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. Subsection (a) of section 36a-250
of the general statutes, as amended by section 1
of public act 97-317, is repealed and the
following is substituted in lieu thereof:
(a) Except as otherwise provided in subsection
(b) of this section, a Connecticut bank may:
(1) Transact a general banking business and
exercise by its governing board or duly authorized
officers or agents, subject to applicable law, all
such incidental powers as are necessary thereto.
The express powers authorized for a Connecticut
bank under subdivisions (2) to [(38)] (39),
inclusive, of this subsection do not preclude the
existence of additional powers deemed to be
incidental to the transaction of a general banking
business pursuant to this subdivision;
(2) (A) Receive deposits as authorized by and
subject to the provisions of sections 36a-290 to
36a-305, inclusive, section 36a-307, sections
36a-315 to 36a-323, inclusive, and sections
36a-330 to 36a-338, inclusive, including: (i)
Savings deposits; (ii) time deposits; (iii) demand
deposits; (iv) public funds or money held in a
fiduciary capacity; (v) school savings funds; and
(vi) club deposits; and (B) pay interest or
dividends thereon;
(3) Act as a depository of court and trust
funds;
(4) PURCHASE AND SELL COINS AND BULLION;
[(4)] (5) Receive for safekeeping or otherwise
all kinds of personal property, including papers,
documents and evidences of indebtedness;
[(5)] (6) Conduct a safe deposit business on
its banking premises;
[(6)] (7) Act (A) as guardian or conservator
of the estate of any person, but not of the
person, (B) as a trustee, receiver, executor or
administrator, or (C) in any other fiduciary
capacity, all without bond unless a bond is
ordered by the court;
[(7)] (8) Act as agent or attorney in fact for
the holders of securities or the owners of real
estate;
[(8)] (9) Act as transfer agent or registrar
of stocks and bonds;
[(9)] (10) Execute and deliver signature
guaranties as may be incidental or usual in the
transfer of investment securities;
[(10)] (11) Act as agent, fiscal agent or
trustee for any corporation or for holders of
bonds, notes or other securities, and pledge
assets to secure deposits in its banking
department when (A) made by it as trustee under a
trust indenture for the holders of revenue bonds
issued by this state, any municipality, district,
municipal corporation or authority or political
subdivision thereof, and the express provisions of
the authority or its political subdivision, and
the express provisions of the trust indenture
require the deposit to be so secured, (B) made by
it as fiscal agent for a housing authority in
connection with a federally-assisted housing
project and federal regulations or other
requirements call for the deposits to be so
secured or (C) made by it to secure deposits in
individual retirement accounts and qualified
retirement plan accounts, established in
accordance with the applicable provisions of the
Internal Revenue Code of 1986, or any prior or
subsequent corresponding internal revenue code of
the United States, as from time to time amended,
where such deposits exceed the maximum of federal
deposit insurance available for such accounts;
[(11)] (12) Act as fiscal agent for this state
or any of its political subdivisions when
authorized by the executive head of this state or
of the political subdivision;
[(12)] (13) Act as agent (A) in the collection
of taxes for any qualified treasurer of any taxing
district or qualified collector of taxes or (B)
for any electric, gas, water or telephone company
operating within this state in receiving moneys
due that company for utility services furnished by
it;
[(13)] (14) Act as agent for the sale, issue
and redemption of obligations of the United States
and pledge assets to the United States or to the
proper federal reserve bank for its obligations as
that agent;
[(14)] (15) (A) Act as agent for an insured
depository institution affiliate in receiving
deposits, renewing time deposits, closing loans,
servicing loans and receiving payments on loans
and other obligations, and in so doing shall not
be considered to be a branch of such affiliate;
(B) A Connecticut bank may not conduct any
activity as an agent under subparagraph (A) of
this subdivision which such bank is prohibited
from conducting as a principal;
[(15)] (16) Act as treasurer of any
organization exempt from federal income taxation
under Section 501 of the Internal Revenue Code of
1986, or any subsequent corresponding internal
revenue code of the United States, as from time to
time amended;
[(16)] (17) Establish a charitable fund,
either in the form of a charitable trust or a
nonprofit corporation to assist in making
charitable contributions, provided (A) the trust
or nonprofit corporation is exempt from federal
income taxation and may accept charitable
contributions under Section 501 of the Internal
Revenue Code of 1986, or any subsequent
corresponding internal revenue code of the United
States, as from time to time amended, (B) the
trust or nonprofit corporation's operations shall
be disclosed fully to the commissioner upon
request, and (C) the trust department of the bank
or one or more directors or officers of the bank
act as trustees or directors of the fund;
[(17)] (18) In the discretion of a majority of
its governing board, make contributions or gifts
to or for the use of any corporation, trust or
community chest, fund or foundation created or
organized under the laws of the United States or
of this state and organized and operated
exclusively for charitable, educational or public
welfare purposes, or of any hospital which is
located in this state and which is exempt from
federal income taxes and to which contributions
are deductible under Section 501(c) of the
Internal Revenue Code of 1986, or any subsequent
corresponding internal revenue code of the United
States, as from time to time amended;
[(18)] (19) Discount, purchase and sell
accounts receivable, negotiable and nonnegotiable
promissory notes, drafts, bills of exchange and
other forms of indebtedness;
[(19)] (20) (A) Accept for payment at future
dates drafts drawn upon it, and (B) except as
provided in section 36a-299, sell or issue without
charge negotiable checks or drafts drawn by or on
the bank. Negotiable checks or drafts drawn, sold
or issued by a bank may be drawn on that bank or
be payable by or through another bank or
out-of-state bank;
[(20)] (21) Make secured and unsecured loans
and issue letters of credit as authorized by and
subject to section 36a-260;
[(21)] (22) (A) Issue credit cards and debit
cards and enter into card agreements with the
bank's card holders and with other card issuers,
(B) lend money to individuals, honor drafts and
similar orders drawn or accepted, whether by
written instrument or electronic transmission, and
pay and agree to pay obligations incurred in
connection with those agreements, (C) become
affiliated with any credit card corporation or
association, and (D) subject to sections 36a-155
to 36a-159, inclusive, where applicable, provide
electronic fund transfer facilities and services
and enter into agreements with customers and other
persons regarding the provision of such
facilities;
[(22)] (23) Provide home banking services to
customers as provided in section 36a-170;
[(23)] (24) Contract for and pay the premiums
upon life insurance in the amount of the unpaid
balance due on loans;
[(24)] (25) Borrow money and pledge assets
therefor, and pledge assets to secure trust funds
on deposit awaiting investment;
[(25)] (26) Enter into leases of personal
property acquired upon the specific request of and
for the use of a prospective lessee;
[(26)] (27) Make investments as authorized by
this title;
[(27)] (28) Sell to any person, including any
state or federal agency or instrumentality, any
loan or group of loans legally owned by the bank,
repurchase any such loan or group of loans, and
act as collecting, remitting and servicing agent
in connection with any such loans and charge for
its acts as agent. Any such bank is authorized to
purchase the minimum amount of capital stock of
the applicable agency or instrumentality if
required by that entity to be purchased in
connection with the assignment of loans to that
entity and to hold and dispose of that stock;
[(28)] (29) With the approval of the
commissioner, deal in and underwrite, to the same
extent as is permitted to a national banking
association, obligations of: (A) The United States
or any of its agencies; (B) any state or any
political subdivision or instrumentality of the
state or (C) Canada, any province of Canada or any
political subdivision of Canada;
[(29)] (30) Issue and sell securities which
(A) are guaranteed by the Federal National
Mortgage Association or any other agency or
instrumentality authorized by state or federal law
to create a secondary market with respect to loans
of the type originated by the bank, or (B) subject
to the approval of the commissioner, relate to
loans originated by the bank and are guaranteed or
insured by a financial guaranty insurance company
or comparable private entity;
[(30)] (31) Subject to the approval of the
commissioner, authorize the issuance and sale of
evidences of indebtedness, including debentures,
debt instruments of all maturities and capital
notes, at such times, in such amount and upon such
terms as are determined by the governing board,
provided the issuance of such evidences of
indebtedness which are payable on demand or mature
within five years of their issuance or which are
effected in the ordinary course of business do not
require the approval of the commissioner. The
proceeds of such evidences of indebtedness which
mature after five years of their issuance which
are subordinate to the claims of depositors upon
liquidation of the bank shall be considered part
of its capital for the purpose of computing any
loan, deposit or investment limitation under this
title;
[(31)] (32) With the approval of and upon such
conditions and under such regulations as may be
prescribed or adopted by the commissioner,
establish and maintain one or more mutual funds
and offer to the public shares or participations
therein;
[(32)] (33) With the written approval of the
commissioner: (A) Acquire, alter or improve real
estate for present or future use in the business
of the bank, except that approval of the
commissioner is not necessary in case of the
alteration or improvement of real estate already
owned by the bank or a corporation controlled by
it as provided in subsection (d) of section
36a-276, if the expenditure for such purposes does
not in any one calendar year exceed five per cent
of the bank's equity capital and reserves for loan
and lease losses or five hundred thousand dollars,
whichever is less; (B) purchase real estate
adjoining any parcel of real estate then owned by
it and acquired in the usual course of business,
provided the aggregate of all investments and
loans authorized in subparagraphs (A) and (B) of
this subdivision and in the equipment used by such
bank in its operations, together with the amount
of any indebtedness incurred by any corporation
holding real estate of the bank and such bank's
proportionate share, computed according to stock
ownership, of any indebtedness incurred by any
service corporation, does not exceed fifty per
cent of the equity capital and reserves for loan
and lease losses of the bank, unless the
commissioner finds that the rental income from any
part of the premises not occupied by the bank will
be sufficient to warrant larger investment;
[(33)] (34) Convey any real estate owned by it
at the price and upon such terms of payment as its
governing board or an authorized committee thereof
determines and sets forth in the bank's records.
If any such sale is wholly or partly for credit, a
note secured by a first mortgage on the real
estate may evidence that credit. With the written
approval of the commissioner, the bank may accept
other real estate in whole or in part for any such
conveyance;
[(34)] (35) Establish and maintain an
international banking facility, as defined in
regulations adopted by the Board of Governors of
the Federal Reserve System, subject to such
regulations as the commissioner may adopt, in
accordance with chapter 54, to specify, and impose
restrictions upon, the types of activities in
which the international banking facility may
engage;
[(35)] (36) Join the Federal Reserve System;
[(36)] (37) With the approval of the
commissioner, join the Federal Home Loan Bank
System and borrow funds as provided under federal
law;
[(37)] (38) Even if not expressly authorized
to exercise fiduciary powers, act as trustee or
custodian of a plan which qualifies as part of a
retirement plan for self-employed individuals or
an individual retirement account under the
provisions of the Internal Revenue Code of 1986,
or any subsequent corresponding internal revenue
code of the United States, as from time to time
amended, if the governing instrument limits the
investment of the funds held pursuant to such plan
to the following investments: (1) Savings deposits
and time deposits; and (2) with respect to
retirement plans for self-employed individuals,
notes of members in such plans which evidence the
indebtedness of such members for funds borrowed
from the plans. Funds held pursuant to any plan
which so qualifies may be deposited in any
Connecticut bank without regard to any statutory
limit on the amount which such bank may have on
deposit from one depositor; AND
[(38)] (39) Sell insurance and fixed and
variable annuities directly, sell insurance and
such annuities indirectly through a subsidiary, or
enter into arrangements with third-party marketing
organizations for the sale by such third-party
marketing organizations of insurance or such
annuities on the premises of the Connecticut bank
or to customers of the Connecticut bank; provided
(A) such insurance and annuities are issued or
purchased by or from an insurance company licensed
in accordance with section 38a-41, and (B) the
Connecticut bank, subsidiary or third-party
marketing organization, and any officer or
employee thereof, shall be licensed as required by
section 38a-769 before engaging in any of the
activities authorized by this subdivision. As used
in this subdivision, "annuities" and "insurance"
have the same meanings as set forth in section
38a-1, except that "insurance" does not include
title insurance. The provisions of this
subdivision do not authorize a Connecticut bank or
a subsidiary of a Connecticut bank to underwrite
insurance or annuities.
Sec. 2. Subsection (a) of section 36a-275 of
the general statutes, as amended by section 1 of
public act 97-35, is repealed and the following is
substituted in lieu thereof:
(a) As used in this section, the term "debt
securities" means (1) any marketable obligation
evidencing indebtedness of any person in the form
of direct, assumed or guaranteed bonds, notes or
debentures [commonly known as investment
securities] OR ANY SECURITY THAT HAS ATTRIBUTES
SIMILAR TO SUCH MARKETABLE OBLIGATIONS; (2) any
obligation identified by certificates of
participation in investments described in
subdivision (1) of [subsection (a) of this
section] THIS SUBSECTION in which a Connecticut
bank could invest directly; or (3) repurchase
agreements and the term "debt mutual fund" means a
partnership interest in, shares of stock of, units
of beneficial interest in or other ownership
interest in any one investment company registered
under the Investment Company Act of 1940, as from
time to time amended, commonly described as mutual
funds, money market funds, investment trusts or
business trusts, provided the portfolios of such
investment companies consist solely of investments
described in subdivision (1) of [subsection (a) of
this section] THIS SUBSECTION.
Approved June 4, 1998