Senate Bill No. 235
               Senate Bill No. 235

              PUBLIC ACT NO. 98-258


AN ACT CONCERNING TRUST COMPANIES.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section   1.  Section  36a-2  of  the  general
statutes, as amended by section 1  of  public  act
97-223,   is   repealed   and   the  following  is
substituted in lieu thereof:
    As  used  in  this title, AND SECTIONS 5 TO 8,
INCLUSIVE,  OF  THIS  ACT,  unless   the   context
otherwise requires:
    (1)  "Affiliate"  of a person means any person
controlling,  controlled  by,  or   under   common
control with, that person;
    (2)  "Applicant"  with  respect to any license
or approval provision pursuant to this title means
a person who applies for that license or approval;
    (3)   "Automated   teller   machine"  means  a
stationary or mobile unattended device,  including
a  satellite  device but excluding a point of sale
terminal,   at   which    banking    transactions,
including,   but   not   limited   to,   deposits,
withdrawals, advances, payments or transfers,  may
be conducted;
    (4)  "Bank"  means  a  Connecticut  bank  or a
federal bank;
    (5)   "Bank   and   trust  company"  means  an
institution chartered or organized under the  laws
of this state as a bank and trust company;
    (6)  "Bank  holding  company"  has the meaning
given to that term in 12 USC Section  1841(a),  as
from  time  to  time amended, except that the term
"bank", as used in 12 USC Section 1841(a) includes
a  bank or out-of-state bank that functions solely
in a trust or fiduciary capacity;
    (7)  "Capital  stock" when used in conjunction
with any bank or out-of-state bank means a bank or
out-of-state bank that is authorized to accumulate
funds through the issuance of its capital stock;
    (8)   "Club  deposit"  means  deposits  to  be
received at regular intervals,  the  whole  amount
deposited  to  be withdrawn by the owner or repaid
by the bank in not more than fifteen  months  from
the  date  of the first deposit, and upon which no
interest or dividends need to be paid;
    (9)  "Commissioner"  means the Commissioner of
Banking. With  respect  to  any  function  of  the
commissioner,  "commissioner"  includes any person
authorized or designated by  the  commissioner  to
carry out that function;
    (10)  "Company"  means  any corporation, joint
stock company,  trust,  association,  partnership,
limited  partnership, unincorporated organization,
limited liability company or similar organization,
but  does  not  include  (A)  any  corporation the
majority of the shares of which are owned  by  the
United  States  or  by any state, or (B) any trust
which  by  its   terms   must   terminate   within
twenty-five  years  or  not  later than twenty-one
years  and  ten  months   after   the   death   of
beneficiaries  living on the effective date of the
trust;
    (11)  "Connecticut  bank"  means  a  bank  and
trust company, savings bank or  savings  and  loan
association  chartered or organized under the laws
of this state;
    (12)   "Connecticut   credit  union"  means  a
cooperative, nonprofit association, the membership
of which is limited as provided in section 36a-438
which is incorporated without capital stock  under
the  laws of this state and licensed under chapter
667 for the purposes of encouraging  thrift  among
its members, creating a source of credit at a fair
and reasonable rate of interest and  providing  an
opportunity  for  its  members  to use and control
their own money  to  improve  their  economic  and
social condition;
    (13)  "Consolidation"  means  a combination of
two or more institutions into a  new  institution.
All institutions party to the consolidation, other
than  the  new  institution,   are   "constituent"
institutions;   the   new   institution   is   the
"resulting" institution;
    (14)  "Control"  has the meaning given to that
term in 12 USC Section 1841(a), as  from  time  to
time amended;
    (15)  "Customer"  means  any  person  using  a
service offered by a financial institution;
    (16)  "Demand  account"  means an account into
which demand deposits may be made;
    (17)  "Demand deposit" means a deposit that is
payable  on  demand,  a  deposit  issued  with  an
original  maturity  or  required  notice period of
less than seven days  or  a  deposit  representing
funds  for  which  the  bank  does not reserve the
right to require  at  least  seven  days'  written
notice  of  the  intended withdrawal, but does not
include any time deposit;
    (18)  "Deposit"  means  funds deposited with a
depository;
    (19)  "Deposit  account" means an account into
which deposits may be made;
    (20)   "Depositor"  includes  a  member  of  a
mutual savings and loan association;
    (21)   "Director"   means   a  member  of  the
governing board of a financial institution;
    (22)  "Equity  capital"  means the excess of a
Connecticut bank's total  assets  over  its  total
liabilities, as defined in the instructions of the
federal Financial Institutions Examination Council
for consolidated reports of condition and income;
    (23)  "Executive  officer" means every officer
of a Connecticut  bank  who  participates  or  has
authority  to  participate,  otherwise than in the
capacity of a  director,  in  major  policy-making
functions of such bank, regardless of whether such
officer has an  official  title  or  whether  that
title  contains  a  designation  of  assistant and
regardless of  whether  such  officer  is  serving
without   salary   or   other   compensation.  The
president, vice president, secretary and treasurer
of  such bank are deemed to be executive officers,
unless, by resolution of the governing board or by
such  bank's  bylaws, any such officer is excluded
from   participation   in   major    policy-making
functions,  otherwise  than  in  the capacity of a
director of such bank, and such officer  does  not
actually   participate   in   such   policy-making
functions;
    (24)  "Federal  agency"  has the meaning given
to that term in 12 USC Section 3101, as from  time
to time amended;
    (25)  "Federal  bank" means a national banking
association,  federal  savings  bank  or   federal
savings  and loan association having its principal
office in this state;
    (26)  "Federal  branch"  has the meaning given
to that term in 12 USC Section 3101, as from  time
to time amended;
    (27)   "Federal   credit   union"   means  any
institution chartered or organized  as  a  federal
credit  union  pursuant  to the laws of the United
States having its principal office in this state;
    (28)  "Fiduciary"  means  a person undertaking
to act alone or jointly with others primarily  for
the  benefit  of  another or others in all matters
connected with  its  undertaking  and  includes  a
person   acting   in   the  capacity  of  trustee,
executor,   administrator,   guardian,   assignee,
receiver,  conservator, agent, custodian under the
Connecticut Uniform Gifts to  Minors  Act  or  the
Uniform Transfers to Minors Act, and acting in any
other similar capacity;
    (29)   "Financial   institution"   means   any
Connecticut bank,  Connecticut  credit  union,  or
other  person  whose  activities in this state are
subject to the supervision  of  the  commissioner,
but does not include a person whose activities are
subject to the  supervision  of  the  commissioner
solely  pursuant  to chapter 672a, 672b or 672c or
any combination thereof;
    (30)  "Foreign  bank" has the meaning given to
that term in 12 USC Section 3101, as from time  to
time amended;
    (31)   "Foreign  country"  means  any  country
other than the  United  States  and  includes  any
colony,  dependency  or  possession  of  any  such
country;
    (32)  "Governing  board"  means  the  group of
persons vested with the management of the  affairs
of  a  financial  institution  irrespective of the
name by which such group is designated;
    (33)  "Holding  company"  means a bank holding
company or a savings  and  loan  holding  company,
except,  as  used  in sections 36a-180 to 36a-191,
inclusive, "holding company" means a bank  holding
company or a savings and loan holding company that
controls a bank;
    (34)  "Insured depository institution" has the
meaning given to that term in 12 USC Section 1813,
as from time to time amended;
    (35)   "Licensee"  means  any  person  who  is
licensed or required to be  licensed  pursuant  to
the applicable provisions of this title;
    (36)  "Loan"  includes  any  line of credit or
other extension of credit;
    (37)  "Merger" means the combination of one or
more institutions with another which continues its
corporate existence. All institutions party to the
merger are "constituent" institutions; the merging
institution  which  upon  the merger continues its
existence is the "resulting" institution;
    (38)  "Mutual"  when  used in conjunction with
any institution that is  a  bank  or  out-of-state
bank  means  any  such institution without capital
stock;
    (39)   "Mutual   holding  company"  means  any
mutual savings bank or  mutual  savings  and  loan
association    reorganized    or    any   nonstock
corporation   formed   in   connection   with    a
reorganization  pursuant  to  sections  36a-192 to
36a-199, inclusive, AS AMENDED, to hold a majority
of  the  ordinary  voting  shares of a reorganized
savings institution;
    (40)  "Out-of-state"  includes any state other
than Connecticut and any foreign country;
    (41)    "Out-of-state    bank"    means    any
institution  that  engages  in  the  business   of
banking,  but does not include a bank, Connecticut
credit union, federal credit union or out-of-state
credit union;
    (42)  "Out-of-state  credit  union"  means any
credit union other than a Connecticut credit union
or a federal credit union;
    (43)  "OUT-OF-STATE  TRUST  COMPANY" MEANS ANY
COMPANY CHARTERED TO ACT AS A FIDUCIARY  BUT  DOES
NOT  INCLUDE A COMPANY CHARTERED UNDER THE LAWS OF
THIS  STATE,  A  BANK,  AN  OUT-OF-STATE  BANK,  A
CONNECTICUT  CREDIT  UNION, A FEDERAL CREDIT UNION
OR AN OUT-OF-STATE CREDIT UNION;
    [(43)]  (44)  "Person"  means  an  individual,
company,  including   a   company   described   in
subparagraphs  (A)  and (B) of subdivision (10) of
this section, or any other legal entity, including
a federal, state or municipal government or agency
or any political subdivision thereof;
    [(44)]  (45)  "Point of sale terminal" means a
device located in a  commercial  establishment  at
which  sales  transactions can be charged directly
to the buyer's deposit, loan  or  credit  account,
but   at  which  deposit  transactions  cannot  be
conducted;
    [(45)]  (46)  "Reorganized savings bank" means
any savings bank  incorporated  and  organized  in
accordance  with sections 36a-192, AS AMENDED, and
36a-193, AS AMENDED, a majority  of  the  ordinary
voting  shares  of  which  is  owned  by  a mutual
holding company;
    [(46)]  (47)  "Reorganized  savings  and  loan
association"   means   any   savings   and    loan
association    incorporated   and   organized   in
accordance with sections 36a-192, AS AMENDED,  and
36a-193,  AS  AMENDED,  a majority of the ordinary
voting shares  of  which  is  owned  by  a  mutual
holding company;
    [(47)]  (48) "Reorganized savings institution"
means any reorganized savings bank or  reorganized
savings and loan association;
    [(48)]  (49)  "Representative  office" has the
meaning given to that term in 12 USC Section 3101,
as from time to time amended;
    [(49)]  (50)  "Reserves  for  loan  and  lease
losses"  means   the   amounts   reserved   by   a
Connecticut  bank  against possible loan and lease
losses as shown on the bank's consolidated reports
of condition and income;
    [(50)]   (51)   "Satellite  device"  means  an
automated teller machine which is not part  of  an
office  of  the  bank, Connecticut credit union or
federal credit union which  has  established  such
machine;
    [(51)]  (52) "Savings account" means a deposit
account, other than an escrow account  established
pursuant  to  section  49-2a,  into  which savings
deposits may be made and  which  account  must  be
evidenced  by  periodic  statements  delivered  at
least semiannually or by a passbook;
    [(52)]  (53)  "Savings  and  loan association"
means an institution chartered or organized  under
the  laws  of  this  state  as  a savings and loan
association;
    [(53)]    (54)   "Savings   bank"   means   an
institution chartered or organized under the  laws
of this state as a savings bank;
    [(54)]   (55)   "Savings  deposit"  means  any
deposit  other  than  a  demand  deposit  or  time
deposit  on  which  interest or a dividend is paid
periodically;
    [(55)]   (56)   "Savings   and   loan  holding
company" has the meaning given to that term in  12
USC Section 1467a, as from time to time amended;
    [(56)]  (57)  "State"  means  any state of the
United  States,  the  District  of  Columbia,  any
territory of the United States, Puerto Rico, Guam,
American Samoa, the trust territory of the Pacific
Islands,  the  Virgin  Islands  and  the  Northern
Mariana Islands;
    [(57)]  (58)  "State  agency"  has the meaning
given to that term in 12 USC Section 3101, as from
time to time amended;
    [(58)]  (59)  "State  branch"  has the meaning
given to that term in 12 USC Section 3101, as from
time to time amended;
    [(59)]   (60)  "Subsidiary"  has  the  meaning
given to that term in 12 USC Section  1841(d),  as
from time to time amended;
    [(60)]  (61)  "Supervisory  agency" means: (A)
The  commissioner;   (B)   the   Federal   Deposit
Insurance  Corporation;  (C)  the Resolution Trust
Corporation; (D) the Office of Thrift Supervision;
(E)  the National Credit Union Administration; (F)
the Board of  Governors  of  the  Federal  Reserve
system;  (G)  the United States Comptroller of the
Currency; and (H) any  successor  to  any  of  the
foregoing agencies or individuals;
    [(61)]  (62)  "Time  account" means an account
into which time deposits may be made; and
    [(62)]  (63)  "Time  deposit"  means a deposit
that the depositor does not have a  right  and  is
not  permitted to make withdrawals from within six
days after the date of deposit, unless the deposit
is  subject  to  an early withdrawal penalty of at
least  seven  days'  simple  interest  on  amounts
withdrawn within the first six days after deposit,
subject  to  those  exceptions  permissible  under
Title   12,  Part  204  of  the  Code  of  Federal
Regulations, as from time to time amended.
    Sec.  2.  Subdivision  (17) of section 36a-316
of  the  general  statutes  is  repealed  and  the
following is substituted in lieu thereof:
    (17)   "Savings   deposit"   means  a  savings
deposit,   as   defined   in   [subsection   (54)]
SUBDIVISION  (55)  of section 36a-2, AS AMENDED BY
SECTION 1 OF THIS ACT, and the payment  on  shares
at  a  Connecticut  credit union or federal credit
union,  and  a  "savings  account"  is  a  deposit
account which contains savings deposits.
    Sec.   3.   Section  36a-381  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    The   provisions   of   sections   36a-380  to
36a-386,  inclusive,  shall  not  apply   to   the
administration  of:  (1)  Any  trust  for cemetery
purposes by an incorporated cemetery  association;
(2) any charitable, religious or educational trust
by  a  corporation   organized   for   charitable,
religious  or  educational purposes; (3) any trust
by a life insurance company of the proceeds of its
insurance policies; (4) any trust by a corporation
without compensation and not  as  a  part  of  its
regular   business;  (5)  any  trust  in  real  or
personal  property  the  trustee  of  which  is  a
corporation  acting  pursuant to the provisions of
section 45a-206; [or] (6) any trust the trustee of
which  is  a  corporation  acting  pursuant to the
provisions of section 36a-395; OR  (7)  ANY  TRUST
THE  TRUSTEE  OF  WHICH  IS  A  CORPORATION ACTING
PURSUANT TO SECTION 5 OF THIS ACT.
    Sec.  4. Subdivision (7) of section 36a-596 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (7)  "Permissible  investment" means: (A) Cash
in United States currency; (B) time  deposits,  as
defined  in  subdivision  [(62)]  (63)  of section
36a-2, AS AMENDED BY SECTION 1  OF  THIS  ACT,  or
other  debt  instruments  of  a bank; (C) bills of
exchange or bankers acceptances which are eligible
for  purchase  by  member  banks  of  the  Federal
Reserve System;  (D)  commercial  paper  of  prime
quality; (E) interest-bearing bills, notes, bonds,
debentures  or   other   obligations   issued   or
guaranteed by: (i) The United States or any of its
agencies or instrumentalities, or (ii) any  state,
or    any   agency,   instrumentality,   political
subdivision,   school    district    or    legally
constituted   authority   of  any  state  if  such
investment    is    of    prime    quality;    (F)
interest-bearing   bills   or   notes,  or  bonds,
debentures or  preferred  stocks,  traded  on  any
national  securities  exchange  or  on  a national
over-the-counter market, if such  debt  or  equity
investments  are of prime quality; (G) receivables
due from selling agents consisting of the proceeds
of  the sale of instruments which are not past due
or doubtful of collection; (H) gold; and  (I)  any
other  investments  approved  by the commissioner.
Notwithstanding    the    provisions    of    this
subdivision, if the commissioner at any time finds
that an investment of a licensee is unsatisfactory
for  investment purposes, the investment shall not
qualify as a permissible investment.
    Sec.  5.  (NEW)  (a)  Any  out-of-state  trust
company, whether or not owned or controlled by  an
out-of-state-holding  company or a foreign banking
corporation,  as  defined  in  subsection  (a)  of
section 36a-425 of the general statutes, may, with
the approval of the  commissioner,  establish  and
maintain  an  office  in  this  state  to act as a
fiduciary or engage in a trust  business  in  this
state,  provided  the  laws  of the state in which
such trust  company  is  chartered  authorize  (1)
similar  companies  chartered in this state to act
as a fiduciary and (2) banks organized to function
solely  in  a  fiduciary capacity to establish and
maintain such office in such state. Such  approved
out-of-state  trust  company  shall  be  deemed to
transact business in this state for  the  purposes
of  section  33-920  of  the  general statutes, as
amended, subsection (a) of section 33-1210 of  the
general  statutes,  as  amended, section 34-223 of
the general statutes  or  section  34-429  of  the
general   statutes   and  shall  comply  with  the
applicable   requirements   of   said    sections.
Application for approval to establish and maintain
an office pursuant to this section shall  be  made
on  forms  prescribed  by  the  commissioner. Such
application shall state the minimum equity capital
of  the  out-of-state trust company which shall be
at least two  million  dollars.  Such  application
shall  be  accompanied  by  evidence of compliance
with the applicable requirements of the  regulator
in  the  state  in  which  the  out-of-state trust
company is chartered  for  the  establishment  and
maintenance  of  such office and the bond required
under section 6  of  this  act.  The  out-of-state
trust  company  shall  pay to the commissioner, at
the   time   of   making   such   application,   a
nonrefundable  fee  of  one  thousand five hundred
dollars. The application shall be deemed  approved
and  the  applicant  may  commence business at the
office unless  the  commissioner  disapproves  the
application   within   thirty   days   after   the
application has been filed with the  commissioner.
The  thirty-day  period  of review may be extended
by   the   commissioner,   in   writing,   on    a
determination  that  the application raises issues
that require additional information or  additional
time for analysis.
    (b)   The   commissioner   may   approve   the
application if the commissioner  finds  that:  (1)
The  proposed  managers  of  the  office  have the
capacity  and   fitness   for   the   duties   and
responsibilities  with which they will be charged;
(2) the out-of-state trust company has  sufficient
financial  resources  to  undertake  its  proposed
activities;  and  (3)  the  establishment  of  the
office is in the public interest.
    Sec.  6.  (NEW)  The  governing  board  of  an
out-of-state  trust  company  that  maintains   an
office  in  this  state shall require that each of
its officers  and  employees  at  such  office  be
bonded  in favor of the out-of-state trust company
by a surety company authorized to do  business  in
this  state in such amounts as are approved by the
governing  board  and  are   acceptable   to   the
commissioner.
    Sec.  7.  (NEW)  (a) The commissioner may make
such examination or investigation  of  any  office
established  and  maintained  in  this state by an
out-of-state trust company as the commissioner may
deem  necessary to determine whether the office is
being operated in compliance with the laws of this
state  and  in  accordance  with  safe  and  sound
practices. The out-of-state  trust  company  shall
pay  the  expenses of examination or investigation
made under this section.
    (b)  The  commissioner  may  require  periodic
reports regarding any out-of-state  trust  company
that  has  established  and maintains an office in
this state.
    (c)    The   commissioner   may   enter   into
cooperative, coordinating and  information-sharing
agreements   with   any  other  state  or  federal
supervisory   agencies   or    any    organization
affiliated  with  or representing such supervisory
agencies with respect to the periodic  examination
or  other  supervision of any office in this state
of  an  out-of-state  trust   company,   and   the
commissioner, in lieu of conducting an examination
or  investigation,  may  accept  the   report   of
examination  and  report  of investigation of such
agency or organization.
    (d)  The  commissioner  may  enter  into joint
examinations or  joint  enforcement  actions  with
other state or federal supervisory agencies having
concurrent   jurisdiction    over    any    office
established  and  maintained  in  this state by an
out-of-state   trust   company,    provided    the
commissioner  may  at  any  time take such actions
independently  if  the  commissioner  deems   such
actions to be necessary or appropriate.
    Sec.  8. (NEW) Each out-of-state trust company
that maintains an office in this state pursuant to
sections 5 to 8, inclusive, of this act shall give
at least thirty days' prior written notice or,  in
the case of an emergency transaction, such shorter
notice as is consistent with applicable  state  or
federal  law,  to  the  commissioner  of  (1)  any
merger, consolidation, or other  transaction  that
would  cause  a  change of control with respect to
such out-of-state trust company, (2) any  transfer
of  all or substantially all of the trust accounts
or trust assets of the out-of-state trust  company
to   another   person,   or  (3)  the  closing  or
disposition of any such office in this state.

Approved June 8, 1998