House Bill No. 5277
               House Bill No. 5277

              PUBLIC ACT NO. 98-178


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of  public  act   97-317,   is  repealed  and  the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

Approved June 4, 1998