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97-223, is repealed and the following is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deposited to be withdrawn by the owner or repaid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