House Bill No. 5280
House Bill No. 5280
PUBLIC ACT NO. 98-260
AN ACT CONCERNING BANK APPLICATIONS.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. Subsection (i) of section 36a-70 of
the general statutes, as amended by section 3 of
public act 97-209, is repealed and the following
is substituted in lieu thereof:
(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]
COMMISSIONER 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.
Sec. 2. Section 36a-125 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) Except as provided in subsection (i) of
this section, any two or more Connecticut banks
may, with the approval of the commissioner, merge
or consolidate into a single Connecticut bank. As
used in this section, a "constituent temporary
bank" means a constituent Connecticut bank that
has a temporary certificate of authority but does
not have a final certificate of authority to
commence business, and a "constituent final bank"
means a constituent Connecticut bank that has a
final certificate of authority to commence
business. Any plan of merger or consolidation
approved by the commissioner shall specify whether
the resulting bank shall operate as a bank and
trust company, or a capital stock or mutual
savings bank or savings and loan association.
(b) The governing board of each constituent
final bank and the organizers of each constituent
temporary bank proposing to merge or consolidate
shall enter into an agreement, approved and
executed by a majority of the governing board or
all of the organizers, as the case may be, of each
bank, prescribing the terms and conditions of such
proposed merger or consolidation. Such agreement
shall include the proposed certificate of
incorporation of the resulting bank and shall
state the name and corporate form of the resulting
bank, the town in which its main office is
located, the minimum and maximum number of
directors and any other details necessary to
effectuate such proposed merger or consolidation.
In the case of a capital stock resulting bank, the
agreement shall include the amount of capital
stock with which the resulting bank shall commence
business, the number of shares into which the
capital stock is to be divided and the manner of
converting the shares of the capital stock of the
constituent banks into shares of the capital stock
of the resulting bank and, if any shares of the
capital stock of any of the constituent banks are
not to be converted solely into shares of the
capital stock of the resulting bank, the amount of
cash, property or other securities of the
resulting bank or the shares or other securities
of any other corporation which the holders of such
shares are to receive in exchange for or upon the
conversion of such shares, which cash, property or
other securities of the resulting bank, or shares
or other securities of any other corporation, may
be in addition to or in lieu of the shares of the
resulting bank. In the case of a merger or
consolidation involving a mutual constituent bank
and a capital stock constituent bank, if the
resulting bank is to be a mutual bank, the
agreement shall include the amount of cash or
property of the resulting mutual bank which the
holders of the shares of the capital stock
constituent bank are to receive in exchange for
such shares.
(c) Such agreement may provide for the
effective date of the proposed merger or
consolidation, which shall not be earlier than the
filing of the agreement and the commissioner's
approval in the office of the Secretary of the
State. If the agreement does not provide an
effective date, the merger or consolidation shall
become effective on the first business day
following the filing of the agreement and approval
in the office of the Secretary of the State. In
the case of capital stock constituent banks, the
merger or consolidation agreement may provide that
no new certificates of stock need be issued to
holders of stock of the constituent bank which
continues its corporate existence and that the
certificates of stock of any other constituent
bank may be deemed to be the certificates of stock
of the resulting bank or any other corporation,
provided that holders of certificates of stock of
such other constituent bank shall be entitled to
exchange their certificates of stock for
certificates of stock of the resulting bank or
such other corporation.
(d) In addition to the vote of the governing
board or organizers as required by subsection (b)
of this section, in the case of a capital stock
constituent final bank, the merger or
consolidation shall be approved by the affirmative
vote of the holders of at least two-thirds of the
issued and outstanding shares of each class of the
capital stock. Such vote shall be taken at
separate meetings of the shareholders called for
the purpose of considering the proposed merger or
consolidation, and not less than ten days' notice
of the time, place and purpose of such meeting
shall be mailed to the last-known address of each
shareholder. Any person entitled to notice under
this subsection may waive such notice in
accordance with section 33-700. The vote may
approve the merger or consolidation either upon
the terms of the agreement as approved and
executed by the governing board or organizers or
with such additions or amendments as may be so
approved at such shareholders' or incorporators'
meetings of each of the constituent banks.
(e) In the case of a merger or consolidation
involving at least one mutual constituent bank,
after adoption of the merger or consolidation
agreement, notice thereof shall be published once
each week for two consecutive weeks in one or more
newspapers having a circulation in the town in
which the main office of each such mutual
constituent bank is located. Copies of the record
of the meetings adopting the agreement of merger
or consolidation, and setting forth the agreement
in full, attested by the secretary and president
of the respective meetings, shall be certified to
and filed in the office of each such mutual
constituent bank, there to remain, subject to
public inspection, for fifteen days.
(f) Upon application by the constituent banks,
and upon receipt of a copy of the agreement of
merger or consolidation, certified by the
secretaries of the respective constituent final
banks and certified by the agents for the
organizers of the respective constituent temporary
banks as having been duly approved in accordance
with [subsections (b) and (d)] SUBSECTION (b) of
this section, [and of notification from the
constituent banks that all approvals required
under federal law, including approvals needed for
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,] the commissioner shall
determine whether such merger or consolidation
will promote public convenience, whether benefits
to the public clearly outweigh possible adverse
effects, including, but not limited to, an undue
concentration of resources and decreased or unfair
competition, and whether the terms thereof are
reasonable and in accordance with law and sound
public policy. The commissioner, if the
commissioner so determines, shall approve the
merger or consolidation. The commissioner shall
not approve such merger or consolidation: (1) If
it involves the acquisition of a Connecticut bank
that has not been in existence and continuously
operating for at least five years, unless the
commissioner waives this requirement; or (2) if
the resulting bank including all insured
depository institutions which are affiliates of
the resulting bank, upon consummation of the
merger or consolidation, would control thirty per
cent or more of the total amount of deposits of
insured depository institutions in this state,
unless the commissioner permits a greater
percentage of such deposits. In addition, the
commissioner shall not approve such merger or
consolidation unless the commissioner considers
whether: (A) The investment and lending policies
of the constituent banks, or the proposed
investment and lending policies of the resulting
bank, are consistent with safe and sound banking
practices and will benefit the economy of this
state; (B) the services or proposed services of
the resulting bank are consistent with safe and
sound banking practices and will benefit the
economy of this state; (C) the constituent banks
have sufficient capital to ensure, and agree to
ensure, that the resulting bank will comply with
applicable minimum capital requirements; (D) the
constituent banks have sufficient managerial
resources to operate the resulting bank in a safe
and sound manner; and (E) the proposed merger or
consolidation will not substantially lessen
competition in the banking industry of this state.
The commissioner shall not approve such merger or
consolidation unless the commissioner makes the
findings required by section 36a-34, AS AMENDED,
and, in the case of a merger or consolidation of a
mutual banking institution, determines that the
interests of depositors are protected or served by
the agreement of merger or consolidation. After
approval of the merger or consolidation by the
commissioner, a copy of the agreement and a copy
of the commissioner's approval shall be filed in
the office of the Secretary of the State. THE
RESULTING BANK SHALL NOT COMMENCE BUSINESS UNLESS
ITS INSURABLE ACCOUNTS AND DEPOSITS ARE INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ITS
SUCCESSOR AGENCY.
(g) Upon the completion of a merger or
consolidation (1) the constituent banks shall
become a Connecticut bank by the name provided in
the certificate of incorporation of the resulting
bank; (2) the corporate existence of the
constituent banks shall be continued by and in the
resulting bank; (3) the resulting bank shall
possess all the rights, privileges and franchises
of each of the constituent banks including the
authority to exercise fiduciary powers without
further express authority of the commissioner,
except that the resulting bank shall be empowered
to exercise only those powers that are provided by
the laws of this state to the resulting bank and
trust company, savings bank or savings and loan
association, as the case may be; (4) the entire
assets, business, good will and franchises of each
of the constituent banks shall be vested in the
resulting bank without any deed or transfer,
provided the constituent banks may execute such
deeds or instruments of conveyance as may be
convenient to confirm the same; (5) the resulting
bank shall assume and be liable for all debts,
accounts, undertakings, contractual obligations
and liabilities of the constituent banks and shall
exercise and be subject to all the duties,
relations, obligations, trusts and liabilities of
each of the constituent banks, whether as debtor,
depository, registrar, transfer agent, executor,
administrator, trustee or otherwise, and shall be
liable to pay and discharge all such debts and
liabilities, to perform all such duties and to
administer all such trusts in the same manner and
to the same extent as if the resulting bank had
itself incurred the obligation or liability or
assumed the duty, relation or trust; (6) all
rights of creditors and all liens upon the
property of any of such constituent banks shall be
preserved unimpaired; and (7) the resulting 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 any of such constituent
banks whether made or created to take effect prior
to or after such merger or consolidation, and the
same shall inure to and vest in such resulting
bank. No suit, action or other proceeding pending
at the time of the merger or consolidation before
any court or tribunal in which any of such
constituent banks is a party shall be abated or
discontinued because of such merger or
consolidation but may be continued and prosecuted
to final effect by or against the resulting bank.
The resulting bank shall have the right to use the
name of any of the constituent banks whenever it
can do any act or discharge any duty or obligation
or endorse any right under such name more
conveniently or with greater advantage to itself
or to any person to whom it holds any relation of
trust or owes any duty under any contract or
conveyance, and no other corporation shall take or
use the name of any of such constituent banks.
(h) Upon the effectiveness of the agreement of
merger or consolidation, the shareholders, if any,
of the constituent banks, except to the extent
that they have received cash, property or other
securities of the resulting bank or shares or
other securities of any other corporation in
exchange for or upon conversion of their shares,
shall be shareholders of a capital stock resulting
bank. Unless such agreement otherwise provides,
the resulting bank may require each shareholder to
surrender such shareholder's certificates of stock
in the constituent bank and in that event no
shareholder, until such surrender of that
shareholder's certificates, shall be entitled to
receive a certificate of stock of the resulting
bank or to vote thereon or to collect dividends
declared thereon, or to receive cash, property or
other securities of the resulting bank, or shares
or other securities of any other corporation. Any
shareholder of any such constituent bank who
dissents from the merger or consolidation is
entitled to assert dissenters' rights under
sections 33-855 to 33-872, inclusive. The rights
and obligations of the objecting shareholders and
the bank shall be determined in accordance with
said sections. The stock of a capital stock
resulting bank up to an amount of the combined
stock of the constituent banks shall be exempt
from any franchise tax.
(i) A mutual savings bank or a mutual savings
and loan association and a capital stock bank
shall not merge or consolidate if the resulting
bank is to be a capital stock bank, unless prior
to or as part of such merger or consolidation, the
mutual savings bank or mutual savings and loan
association first converts to a capital stock bank
in accordance with section 36a-136, AS AMENDED BY
SECTION 4 OF THIS ACT, provided the commissioner
may waive any of the provisions of section
36a-136, AS AMENDED BY SECTION 4 OF THIS ACT, if
the commissioner certifies in writing that the
protection of depositors and other creditors of
one of the merging or consolidating banks or
associations requires that the merger or
consolidation proceed without delay. No such
conversion shall be required if the resulting bank
is to be a mutual savings bank or a mutual savings
and loan association.
Sec. 3. Section 36a-135 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) (1) Any mutual savings bank, federal
mutual savings bank, mutual savings and loan
association, or federal mutual savings and loan
association may convert into a mutual savings
bank, federal mutual savings bank, mutual savings
and loan association, or federal mutual savings
and loan association, in accordance with the
provisions of this section and any regulations the
commissioner may adopt in accordance with chapter
54 as are necessary to allow such conversions on
an equitable basis, provided this section does not
apply to the conversion of a mutual federal bank
into another mutual federal bank.
(2) Any conversion pursuant to this section
involving the conversion of or to a federal mutual
savings bank or federal mutual savings and loan
association shall be authorized only if permitted
by federal law and shall be subject to all
requirements prescribed by federal law.
(3) The converting institution shall file with
the commissioner a proposed plan of conversion, a
copy of the proposed certificate of incorporation,
and a certificate by the secretary of the
converting institution that the proposed plan of
conversion has been approved, in accordance with
subdivision (4) of this subsection, by the
governing board, and, in the case of a converting
savings and loan association, federal savings bank
or federal savings and loan association, the
depositors or members thereof.
(4) The plan of conversion shall require the
approval of a majority of the governing board of
the converting institution. In the case of a
converting savings and loan association, the plan
of conversion shall also require the favorable
vote of not less than fifty-one per cent of the
votes cast by depositors of such association at a
special meeting called to consider such
conversion. In the case of a converting federal
savings bank or federal savings and loan
association, the plan of conversion shall require
any vote of depositors or members prescribed by
federal law.
(5) In the case of a converting savings and
loan association, any depositor may, within
fifteen days after written notice given such
depositor of such conversion, signify to such
association, in writing, such depositor's dissent
therefrom. Any such dissenting depositor shall
not, as a result of the conversion, become a
depositor of the converted institution, and shall
be entitled to receive from the converted
institution the value of such depositor's savings
account in the converting association, to be
ascertained by an appraisal, made as the governing
board of the converted institution prescribes. If
the value so fixed is not satisfactory to such
depositor, such depositor may appeal to the
commissioner, who shall make a reappraisal, which
is final. If the reappraisal exceeds the value
fixed by the governing board, the converted
institution shall pay the expenses thereof. If the
reappraisal does not exceed the value fixed by the
governing board, the appellant shall pay the
expenses thereof. The value so ascertained shall
be a debt due such depositor from such converted
institution. Any depositor of a converting
association who does not dissent in accordance
with this subdivision shall become a depositor of
the converted institution and shall receive,
without payment, a withdrawable deposit account or
accounts in the converted institution equal in
withdrawable amount to the withdrawal value of
such depositor's deposit account or accounts in
the converting association.
[(6) The commissioner, at the commissioner's
discretion, may hold a public hearing on any
proposed plan of conversion filed under this
section.]
(b) In any conversion of a mutual savings bank
or mutual savings and loan association to a
federal mutual savings bank or federal mutual
savings and loan association under this section:
(1) The commissioner shall approve a
conversion under this subsection if the
commissioner determines that the converting
institution has complied with all applicable
provisions of law. [and that approvals needed for
deposit insurance by the Federal Deposit Insurance
Corporation or its successor agency have been
obtained.]
(2) After receipt of the commissioner's
approval, the converting institution shall
promptly file such approval with the Secretary of
the State and with the town clerk of the town in
which its principal office is located. Upon such
filing, and upon the receipt of all necessary
approvals required under federal law, the
converting institution shall cease to be a mutual
savings bank or mutual savings and loan
association and shall become a federal mutual
savings bank or federal mutual savings and loan
association, as the case may be. THE CONVERTED
INSTITUTION SHALL NOT COMMENCE BUSINESS UNLESS ITS
INSURABLE ACCOUNTS AND DEPOSITS ARE INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ITS
SUCCESSOR AGENCY.
(c) In any conversion under this section
involving the conversion to a mutual savings bank
or mutual savings and loan association:
(1) The commissioner shall approve a
conversion under this subsection if the
commissioner determines that: (A) The converting
institution has complied with all applicable
provisions of law; [and that approvals needed for
deposit insurance by the Federal Deposit Insurance
Corporation or its successor agency have been
obtained;] (B) the converting institution has
equity capital at least equal to the minimum
equity capital required for the organization of a
Connecticut bank; and (C) the proposed conversion
will serve the public necessity and convenience.
(2) After receipt of the commissioner's
approval, the converting institution 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
converting institution ceases to be the type of
institution from which it converted and becomes a
mutual savings bank or mutual savings and loan
association, as the case may be. THE CONVERTED
INSTITUTION SHALL NOT COMMENCE BUSINESS UNLESS ITS
INSURABLE ACCOUNTS AND DEPOSITS ARE INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ITS
SUCCESSOR AGENCY. Upon such conversion, the
converted institution possesses 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, business and good will of the
converting institution are transferred to and
vested in it without any deed or instrument of
conveyance provided the converting institution may
execute any deed or instrument of conveyance as is
convenient to confirm such transfer. The converted
institution is subject to all of the duties,
relations, obligations, trusts and liabilities of
the converting institution, whether as debtor,
depository, registrar, transfer agent, executor,
administrator, trustee or otherwise, and is liable
to pay and discharge all such debts and
liabilities, to perform all such duties and to
administer all such trusts in the same manner and
to the same extent as if the converted institution
had itself incurred the obligation or liability or
assumed the duty, relation or trust. All rights of
creditors of the converting institution and all
liens upon the property of such institution are
preserved unimpaired and the converted institution
is 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 converting institution and
whether made or created to take effect prior to or
after the conversion.
(3) The persons named as directors in the
certificate of incorporation of the converted
institution shall be its directors until the first
annual election of directors after the conversion
or until the expiration of their terms as
directors, and have the power to take all
necessary actions and to adopt bylaws concerning
the business and management of such converted
institution.
Sec. 4. Subsection (j) of section 36a-136 of
the general statutes is repealed and the following
is substituted in lieu thereof:
(j) The commissioner shall approve a
conversion under this section if the commissioner
determines that: (1) The converting institution
has complied with all applicable provisions of
law; (2) the conversion would not result in any
reduction of the converting institution's amount
of equity capital, less any subordinated debt
reorganized as bona fide capital; (3) the
conversion would not result in a taxable
reorganization of the converting institution under
the Internal Revenue Code of 1986, or any
subsequent corresponding internal revenue code of
the United States, as from time to time amended;
[(4) approvals needed for deposit insurance by the
Federal Deposit Insurance Corporation or its
successor agency have been obtained;] and [(5)]
(4) the plan of conversion is fair to depositors.
THE CONVERTED INSTITUTION SHALL NOT COMMENCE
BUSINESS UNLESS ITS INSURABLE ACCOUNTS AND
DEPOSITS ARE INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ITS SUCCESSOR AGENCY.
Sec. 5. Section 36a-137 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) (1) Any capital stock Connecticut bank or
capital stock federal bank may convert into any
other capital stock Connecticut bank or capital
stock federal bank upon the approval of the
conversion by the commissioner, provided this
section does not apply to the conversion of a
capital stock federal bank to another capital
stock federal bank. The requirements of the
commissioner's approval and subdivisions (3) to
(6), inclusive, of this subsection do not apply to
the conversion of a capital stock Connecticut bank
into a national banking association.
(2) Any conversion pursuant to this section
involving the conversion of or to a capital stock
federal bank shall be authorized only if permitted
by federal law and shall be subject to all
requirements prescribed by federal law.
(3) The converting bank shall file with the
commissioner a proposed plan of conversion, a copy
of the proposed certificate of incorporation and a
certificate by the secretary of the converting
bank that the proposed plan of conversion and
proposed certificate of incorporation have been
approved in accordance with subdivision (4) of
this subsection by the governing board and the
shareholders.
(4) The plan of conversion and proposed
certificate of incorporation shall require the
approval of a majority of the governing board of
the converting bank and, in the case of a
converting Connecticut bank, the favorable vote of
not less than two-thirds of the holders of each
class of the bank's capital stock cast at a
meeting called to consider such conversion. In the
case of a converting federal bank, the plan of
conversion shall require any vote of shareholders
prescribed by federal law.
(5) Any shareholder of a converting
Connecticut bank who, on or before the date of the
shareholders' meeting to vote on such conversion,
objects to the conversion by filing a written
objection with the secretary of the bank may,
within ten days after the effective date of such
conversion, make written demand upon the converted
bank for payment of such shareholder's stock; and
thereafter such shareholder's rights shall be the
same as those of a shareholder who dissents from
the merger of two or more capital stock
Connecticut banks.
[(6) The commissioner, in the commissioner's
discretion, may hold a public hearing on any
proposed plan of conversion under this section.]
(b) In any conversion under this section of a
Connecticut capital stock bank to a capital stock
federal bank other than a national banking
association:
(1) The commissioner shall approve a
conversion under this subsection if the
commissioner determines that the converting bank
has complied with all applicable provisions of
law. [, and that approvals needed for deposit
insurance by the Federal Deposit Insurance
Corporation or its successor agency have been
obtained.]
(2) After receipt of the commissioner's
approval, the converting bank shall promptly file
the approval with the Secretary of the State and
with the town clerk of the town in which its
principal office is located. Upon filing, and upon
the receipt of all necessary approvals required
under federal law, the converting bank ceases to
be a capital stock Connecticut bank and becomes a
capital stock federal bank. THE CONVERTED BANK
SHALL NOT COMMENCE BUSINESS UNLESS ITS INSURABLE
ACCOUNTS AND DEPOSITS ARE INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ITS SUCCESSOR
AGENCY.
(c) In any conversion under this section
involving the conversion to a capital stock
Connecticut bank:
(1) The commissioner shall approve a
conversion under this subsection if the
commissioner determines that: (A) The converting
bank has complied with all applicable provisions
of law; [, and that approvals needed for deposit
insurance by the Federal Deposit Insurance
Corporation or its successor agency have been
obtained;] (B) the converting bank has equity
capital at least equal to the minimum equity
capital for the organization of a Connecticut
bank; and (C) the proposed conversion will serve
public necessity and convenience.
(2) After receipt of the commissioner's
approval, the converting 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 converting bank
shall cease to be the type of bank from which it
converted and shall become a bank and trust
company, capital stock savings bank or capital
stock savings and loan association, as the case
may be. THE CONVERTED CONNECTICUT BANK SHALL NOT
COMMENCE BUSINESS UNLESS ITS INSURABLE ACCOUNTS
AND DEPOSITS ARE INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ITS SUCCESSOR AGENCY.
Upon such conversion, the converted Connecticut
bank possesses 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 Connecticut
bank into which it converted, and all of the
assets, business and good will of the converting
bank are transferred to and vested in it without
any deed or instrument of conveyance, provided the
converting bank may execute any deed or instrument
of conveyance as is convenient to confirm such
transfer. The converted Connecticut bank is
subject to all of the duties, relations,
obligations, trusts and liabilities of the
converting bank, whether as debtor, depository,
registrar, transfer agent, executor,
administrator, trustee or otherwise, and is liable
to pay and discharge all such debts and
liabilities, to perform all such duties and to
administer all such trusts in the same manner and
to the same extent as if the converted Connecticut
bank had itself incurred the obligation or
liability or assumed the duty, relation or trust.
All rights of creditors of the converting bank and
all liens upon the property of such bank are
preserved unimpaired and the converted Connecticut
bank is 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 converting bank and whether
made or created to take effect prior to or after
the conversion.
(3) The persons named as directors in the
certificate of incorporation shall be the
directors of the converted Connecticut bank until
the first annual election of directors after the
conversion 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.
(4) No such converted Connecticut bank shall
exercise any of the fiduciary powers granted to
Connecticut banks by law until express authority
therefor has been given by the commissioner,
unless such powers were legally exercised by the
bank at the time of conversion.
(5) The franchise tax required to be paid by
capital stock Connecticut banks on an increase of
capital stock shall be paid upon the capital stock
of any such converted Connecticut bank converting
from a capital stock federal bank, the amount
subject to such tax to be determined by deducting
from the entire amount of such stock, the amount
of the capital stock of the capital stock federal
bank upon which such tax was paid during its
existence as a capital stock Connecticut bank, if
such capital stock federal bank came into
existence by virtue of conversion from a capital
stock Connecticut bank or by virtue of merger or
consolidation of a capital stock Connecticut bank
with a capital stock federal bank.
(d) Notwithstanding the provisions of
subsection (a) of this section, no reorganized
savings institution shall have the power to
convert into a bank and trust company, capital
stock savings bank or capital stock savings and
loan association, as the case may be.
Sec. 6. Subsection (c) of section 36a-138 of
the general statutes is repealed and the following
is substituted in lieu thereof:
(c) The commissioner shall approve a
conversion under this section if the commissioner
determines that: (1) The converting institution
has complied with all applicable provisions of
law; [and that approvals needed for deposit
insurance by the Federal Deposit Insurance
Corporation or its successor agency have been
obtained;] (2) the proposed conversion will serve
public necessity and convenience; and (3) in the
case of a conversion to a mutual savings bank or
mutual savings and loan association, the
converting institution has equity capital at least
equal to the minimum equity capital required for
the organization of a Connecticut bank. THE
CONVERTED INSTITUTION SHALL NOT COMMENCE BUSINESS
UNLESS ITS INSURABLE ACCOUNTS AND DEPOSITS ARE
INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ITS SUCCESSOR AGENCY.
Sec. 7. Section 36a-185 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) The offer, invitation, request, agreement
or acquisition referred to in section 36a-184 may
be made unless the commissioner disapproves it
within sixty days after the acquisition statement
has been filed with the commissioner, or unless
within the first thirty days of such sixty days
the commissioner calls a public hearing [. The
commissioner may call such a hearing in the
commissioner's discretion and shall call such a
hearing if the bank or holding company named in
the acquisition statement:
(1) Files with the commissioner a written
request for a hearing no later than fifteen days
after the filing with the commissioner, or the
receipt by the bank or holding company, of the
acquisition statement, whichever is later; and
(2) With such written request, files a
statement of issues of fact which, if proved,
would constitute grounds for the commissioner's
disapproval under subsection (d) of this section.
Such hearing shall be called to commence within
sixty days of the filing of the acquisition
statement] IN ACCORDANCE WITH SECTION 11 OF THIS
ACT. The offer, invitation, request, agreement or
acquisition may be made prior to the expiration of
the sixty-day disapproval period if the
commissioner issues written notice of the
commissioner's intent not to disapprove the
action.
[(b) The commissioner shall give not less than
fifteen days' notice of the public hearing to the
person filing the acquisition statement and to the
bank or holding company referred to in the
acquisition statement. The commissioner may give,
or may require that the person filing the
acquisition statement give, not less than fifteen
days' notice of the hearing to the shareholders of
such bank or holding company and such other
interested persons as may be designated by the
commissioner to receive notice, in a form approved
by the commissioner. The commissioner may, in the
commissioner's discretion, require that a copy of
the acquisition statement accompany the notice to
the shareholders of such bank or holding company.
If the hearing was requested by the person filing
the acquisition statement, the notice to the
shareholders of such bank or holding company and a
copy of the acquisition statement, if required by
the commissioner, shall be mailed to them by such
bank or holding company at the expense of the
person filing the statement.
(c) Any such hearing shall be conducted in
accordance with chapter 54.
(d) The commissioner shall make a
determination as promptly as practicable after the
conclusion of such hearing. The determination
shall state either that the commissioner
disapproves the offer, invitation, request,
agreement or acquisition or that the commissioner
does not disapprove it.]
(b) The commissioner may disapprove any such
offer, invitation, request, agreement or
acquisition if the commissioner finds that:
(1) Upon completion of the acquisition, the
bank referred to in the acquisition statement
would be unable to satisfy the requirements for
the issuance of a certificate of incorporation or
a certificate of authority to carry on the
business of banking to the same extent and in the
same manner as it was authorized to carry on such
business immediately prior to the acquisition;
(2) The financial condition of the acquiring
person might jeopardize the financial stability of
such bank or holding company, or prejudice the
interests of depositors or security holders whose
securities will not be acquired by the acquiring
person;
(3) If a tender offer or exchange offer is
contemplated, its terms are unfair and inequitable
to the security holders of such bank or holding
company;
(4) The plans or proposals which the acquiring
person has to liquidate such bank or holding
company, to sell its assets or to merge or
consolidate it with any person, or to make any
other material change in its business or corporate
structure or management, are unfair or prejudicial
to depositors or to security holders of such bank
or holding company;
(5) The competence, experience and integrity
of the acquiring person are such that it would not
be in the interest of the depositors or of the
security holders of such bank or holding company
or in the public interest for such offer, request,
invitation, agreement or acquisition to be made;
or
(6) The benefits to the public are clearly
outweighed by the possible adverse effects,
including, but not limited to, an undue
concentration of resources and decreased or unfair
competition.
[(e)] (c) The commissioner shall disapprove
such offer, invitation, request, agreement or
acquisition if: (1) It involves the acquisition of
the voting securities or securities convertible
into voting securities of a bank that has not been
in existence and continuously operating for at
least five years, or a holding company, the
subsidiary banks of which have not been in
existence and continuously operating for at least
five years, unless the commissioner waives this
requirement or (2) the acquiring person, including
all insured depository institutions which are
affiliates of the person, upon consummation of the
acquisition, would control thirty per cent or more
of the total amount of deposits of insured
depository institutions in this state, unless the
commissioner permits a greater percentage of such
deposits. In making the determination to
disapprove or not to disapprove such offer,
invitation, request, agreement or acquisition, the
commissioner shall consider whether: (A) The
investment and lending policies of the bank
referred to in the acquisition statement are
consistent with safe and sound banking practices
and will benefit the economy of this state; (B)
the services or proposed services of the bank
referred to in the acquisition statement are
consistent with safe and sound banking practices
and will benefit the economy of this state; (C)
the proposed acquisition will not substantially
lessen competition in the banking industry of this
state; and (D) the acquiring person, if such
person would be the beneficial owner of
twenty-five per cent or more of any class of
voting securities of the bank or holding company
referred to in the acquisition statement, (i) has
sufficient capital to ensure, and agrees to
ensure, that the bank referred to in the
acquisition statement will comply with applicable
minimum capital requirements, and (ii) has
sufficient managerial resources to operate the
bank or holding company referred to in the
acquisition statement in a safe and sound manner.
The commissioner shall disapprove such offer,
invitation, request, agreement or acquisition
unless the commissioner can make the findings
required by section 36a-34, AS AMENDED.
Sec. 8. Subsection (b) of section 36a-192 of
the general statutes, as amended by section 3 of
public act 97-223, is repealed and the following
is substituted in lieu thereof:
(b) (1) Notwithstanding any other provision of
the general statutes, any mutual savings bank or
mutual savings and loan association may reorganize
so as to form a mutual holding company by: (A)
Causing a nonstock corporation to be organized
under the laws of this state; (B) (i) in the case
of a mutual savings bank, causing such nonstock
corporation to form a reorganized savings
institution by organizing a capital stock savings
bank in accordance with section 36a-193, as
amended by section 4 of [this act] PUBLIC ACT
97-223, or (ii) in the case of a mutual savings
and loan association, causing such nonstock
corporation to form a reorganized savings
institution by organizing a capital stock savings
and loan association in accordance with section
36a-193, as amended by section 4 of [this act]
PUBLIC ACT 97-223; (C) causing such nonstock
corporation to acquire a majority of the ordinary
voting shares of such reorganized savings
institution; and (D) merging the mutual savings
bank or mutual savings and loan association with
and into such reorganized savings institution in
accordance with the provisions of subdivision (2)
of this subsection and section 36a-125, AS AMENDED
BY SECTION 2 OF THIS ACT, except that subsections
(e), (f) and (i) of section 36a-125, AS AMENDED BY
SECTION 2 OF THIS ACT, shall not apply.
(2) Upon application by the constituent banks,
and upon receipt of a copy of the agreement of
merger, [certified by the secretaries of the
constituent banks as having been duly approved in
accordance with subsections (b) and (d) of section
36a-125, and of notification from the constituent
banks that all approvals needed for 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,] the commissioner shall determine whether
the terms of the merger are reasonable and in
accordance with law and sound public policy. The
commissioner, if the commissioner so determines,
shall approve the merger. The commissioner shall
not approve the merger of the mutual savings bank
or mutual savings and loan association with and
into the reorganized savings institution if: (A)
The merger would be unfair or prejudicial to the
depositors of the mutual savings bank or mutual
savings and loan association; (B) the interest of
the public will not be served by the merger; (C)
disapproval is necessary to prevent unsafe and
unsound banking practices; or (D) the financial or
managerial resources of the constituent banks do
not warrant approval of the merger. After approval
of the merger by the commissioner, a copy of the
agreement and a copy of the commissioner's
approval shall be filed in the office of the
Secretary of the State. Upon completion of the
merger, the nonstock corporation shall be a mutual
holding company and persons who had ownership,
liquidation or voting rights with respect to the
mutual savings bank or mutual savings and loan
association shall continue to have such rights
solely with respect to such mutual holding
company.
Sec. 9. Section 4 of public act 97-209 is
repealed and the following is substituted in lieu
thereof:
(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]
PUBLIC ACT 97-209, 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] PUBLIC ACT 97-209.
(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)] (e) 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)] (f) 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] PUBLIC ACT 97-209, 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)] (g) 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)] (h) 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)] (i) 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. 10. Section 5 of public act 97-209 is
repealed and the following is substituted in lieu
thereof:
(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] PUBLIC ACT 97-209, 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)] (b) The commissioner shall not approve
the conversion unless the commissioner makes the
considerations, determinations and findings
required by subsections [(d), (e) and (f)] (c),
(d) AND (e) of this section.
[(d)] (c) 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)] (d) 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)] (e) 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)] (f) 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)] (g) 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)] (h) 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)] (i) 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. 11. (NEW) (a) The Commissioner of
Banking, in the commissioner's discretion, may
hold a hearing in connection with any application
filed with the commissioner and otherwise, with
respect to any matter within the commissioner's
jurisdiction, as the commissioner may determine.
In the case of an acquisition pursuant to section
36a-184 of the general statutes, the commissioner
shall call such a hearing if the bank or holding
company named in the acquisition statement:
(1) Files with the commissioner a written
request for a hearing not later than fifteen days
after the acquisition statement is filed with the
commissioner or the acquisition statement is
received by the bank or holding company, whichever
is later; and
(2) With such written request, files a
statement of issues of fact which, if proved,
would constitute grounds for the commissioner's
disapproval under subsection (b) of section
36a-185 of the general statutes, as amended by
section 5 of this act. Such hearing shall be
called to commence not later than sixty days after
the filing of the acquisition statement.
(b) The commissioner shall give not less than
fifteen days' notice of hearing held in connection
with an acquisition pursuant to section 36a-184 of
the general statutes to the person filing the
acquisition statement and to the bank or holding
company referred to in the acquisition statement.
The commissioner may give, or may require that the
person filing the acquisition statement give, not
less than fifteen days' notice of the hearing to
the shareholders of such bank or holding company
and such other interested persons as may be
designated by the commissioner to receive notice.
Any such notice to shareholders and other
interested persons shall be in a form approved by
the commissioner. The commissioner may, in the
commissioner's discretion, require that a copy of
the acquisition statement accompany the notice to
the shareholders of such bank or holding company.
If the hearing was requested by the person filing
the acquisition statement, the notice to the
shareholders of such bank or holding company and a
copy of the acquisition statement, if required by
the commissioner, shall be mailed to the
shareholders by such bank or holding company at
the expense of the person filing the statement.
The commissioner shall make a determination as
promptly as practicable after the conclusion of
such hearing. The determination shall state either
that the commissioner disapproves the offer,
invitation, request, agreement or acquisition or
that the commissioner does not disapprove it.
(c) Any hearing held under this section shall
be conducted in accordance with chapter 54 of the
general statutes.
Approved June 8, 1998