CSHB 106(L&C): "An Act relating to the authorizations for certain state financial institutions of certain powers and limitations; relating to confidential records of depositors and customers of certain financial institutions; relating to the Alaska Banking Code, Mutual Savings Bank Act, Alaska Small Loans Act, and Alaska Credit Union Act; amending Rule 45, Alaska Rules of Civil Procedure, Rules 17 and 37, Alaska Rules of Criminal Procedure, and Rule 24, Alaska Bar Rules; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 106(L&C) 01 "An Act relating to the authorizations for certain state financial institutions of certain 02 powers and limitations; relating to confidential records of depositors and customers of 03 certain financial institutions; relating to the Alaska Banking Code, Mutual Savings 04 Bank Act, Alaska Small Loans Act, and Alaska Credit Union Act; amending Rule 45, 05 Alaska Rules of Civil Procedure, Rules 17 and 37, Alaska Rules of Criminal Procedure, 06 and Rule 24, Alaska Bar Rules; and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 09 to read: 10 PURPOSE. The primary purpose of this Act is to implement banking and other 11 financial institution reforms in AS 06 in response to P.L. 106-102 (Gramm-Leach-Bliley Act) 12 in order to further this state as an attractive place for investment and other commerce 13 involving banking and other financial institutions.
01 * Sec. 2. AS 06.01.015(a) is amended to read: 02 (a) Financial institutions regulated under this title are subject to at least one 03 examination every 18 months [EACH YEAR]. The department may conduct 04 additional examinations at its discretion. 05 * Sec. 3. AS 06.01.020(a) is amended to read: 06 (a) Notwithstanding other provisions of this title, the department may by 07 order [REGULATION] authorize state financial institutions, except licensees subject 08 to AS 06.20 or AS 06.40, to exercise any of the powers conferred upon, or to be 09 subject to any of the limitations imposed upon, a federally chartered financial 10 institution doing business in this state with deposits insured by an agency of the 11 federal government [,] if the department finds that the exercise of the power or 12 imposition of the limitation both 13 (1) serves the public convenience and advantage; and 14 (2) equalizes and maintains the quality of competition between state 15 financial institutions and federally chartered financial institutions. 16 * Sec. 4. AS 06.01 is amended by adding a new section to read: 17 Sec. 06.01.028. Depositor and customer records confidential. (a) The 18 records of financial institutions relating to their depositors and customers and the 19 information in the records are confidential. A financial institution may not disclose 20 the records and information to another person except when, and only to the extent that, 21 (1) the disclosure is authorized in writing by the depositor or customer; 22 (2) the disclosure is required by federal or state statute or regulation or 23 by an order directed to the financial institution and issued by a court or administrative 24 agency of competent jurisdiction; 25 (3) the disclosure is made to the holder of a negotiable instrument 26 drawn on the financial institution as to whether the drawer has sufficient funds in the 27 financial institution to cover the instrument; or 28 (4) an inquiry has been made by a financial institution or by a credit- 29 reporting agency regulated under 15 U.S.C. 1681-1681u (Fair Credit Reporting Act), 30 as amended, solely for the express purpose of determining the credit worthiness of the 31 depositor or customer as an applicant for credit, and the information disclosed by the
01 financial institution or the entity making the inquiry under this paragraph pertains only 02 to the payment habits of the depositor or customer in connection with loans and other 03 credit accommodations and does not pertain to records concerning deposit balances in 04 savings or checking accounts. 05 (b) When disclosure of financial institution records is compelled by a 06 subpoena, a search warrant, or another court or administrative agency order under 07 (a)(2) of this section, the court or administrative agency shall provide in the order for 08 the reimbursement of the financial institution for the reasonable costs incurred in 09 complying with the order. 10 (c) Unless otherwise provided in this subsection, when disclosure of financial 11 institution records is required under a court or administrative agency order under 12 (a)(2) of this section, the financial institution shall notify the depositor or customer of 13 the disclosure before the disclosure is made. If notification before disclosure is not 14 possible, the financial institution shall notify the customer or depositor of the 15 disclosure as soon as practicable after the disclosure is made. However, notification 16 either before or after disclosure may not be made if disclosure is made under a court or 17 administrative agency order under (a)(2) of this section and the document requiring 18 disclosure requires on its face that the financial institution not notify or inform the 19 depositor or customer, or the document requiring disclosure is, or is accompanied by, 20 a court order that expressly directs the financial institution not to notify or inform the 21 depositor or customer. 22 (d) Nothing in (a) - (c) of this section prohibits a financial institution from 23 disclosing information to a person if 24 (1) the disclosure is necessary to 25 (A) provide the services of the financial institution to a 26 depositor or customer; or 27 (B) market financially related products or services of the 28 financial institution and its marketing partners; and 29 (2) the person receiving the information has a written agreement with 30 the financial institution to be bound by the requirements of (a) - (c) of this section. 31 (e) A financial institution or any other person who intentionally violates this
01 section is liable to a depositor or customer in an amount equal to the actual damages 02 caused by the disclosure of the confidential records or information of the financial 03 institution pertaining to the depositor or customer. A financial institution or other 04 person who takes an action under this section while relying in good faith on any 05 provision of this section is not liable under this section to any person for the action. 06 (f) In this section, "financial institution" means a person subject to the 07 regulation of the department under this title, including a BIDCO licensed under 08 AS 10.13 (Alaska BIDCO Act). 09 * Sec. 5. AS 06.01.040 is amended to read: 10 Sec. 06.01.040. Examination policy. It shall be the policy of the department 11 to conduct, whenever reasonably possible, joint examinations with the Federal Deposit 12 Insurance Corporation or with the National Credit Union Administration of those 13 institutions subject to this title whose accounts are insured through [THAT 14 CORPORATION] those agencies. 15 * Sec. 6. AS 06.01.050(3) is amended to read: 16 (3) "financial institution" means an institution subject to the regulation 17 of the department under this title; in this paragraph, "institution" includes a 18 commercial bank, savings bank, credit union, premium finance company, small 19 loan company, bank holding company, financial holding company, trust company 20 and savings and loan association. 21 * Sec. 7. AS 06.01.050 is amended by adding a new paragraph to read: 22 (4) "state financial institution" means a financial institution that is 23 organized under this title or that is subject to examination by the department under this 24 title. 25 * Sec. 8. AS 06.05.005(a) is amended to read: 26 (a) The department shall 27 (1) exercise general supervision over all state financial institutions and 28 their subsidiaries and affiliated corporations; 29 (2) adopt regulations necessary to implement this chapter, including 30 regulations providing for the retention and preservation of state bank records; 31 (3) review and approve or disapprove applications for new state banks
01 under AS 06.05.344 [AS 06.05.345], new bank branches under AS 06.05.399, and 02 international bank branches or interstate state bank branches [BRANCH BANKS] 03 under AS 06.05.555; 04 (4) issue permits authorizing certain acquisitions by bank holding 05 companies [TO DO BUSINESS IN THIS STATE] under AS 06.05.235 and 06 06.05.570; 07 (5) determine for each state bank the amount of paid-in capital 08 necessary to operate under AS 06.05.305(a); 09 (6) review and approve transfers of state bank ownership under 10 AS 06.05.327; 11 (7) perform examinations of state banks, branch banks, and 12 subsidiaries under AS 06.01.015. 13 * Sec. 9. AS 06.05.050 is repealed and reenacted to read: 14 Sec. 06.05.050. Publication of reports. (a) Condensed forms of all reports 15 of condition required by AS 06.05.045(a) shall be immediately 16 (1) published by the state bank in a newspaper of general circulation 17 published in the place where the state bank is located; if a newspaper of general 18 circulation is not published in that place, the report shall be published in the 19 newspaper of general circulation published nearest to that place; or 20 (2) posted 21 (A) at the primary Internet website of the state bank; and 22 (B) in the lobby of the principal office and all branches of the 23 state bank. 24 (b) Notice of the publication or posting of the reports of condition under (a) of 25 this section shall be posted in the lobby of the principal office and all branches of the 26 state bank. Upon request, a copy of a report of condition shall be supplied to any 27 person at no cost. 28 * Sec. 10. AS 06.05.065(a) is amended to read: 29 (a) A bank examiner of the department who deals with the regulation of 30 financial institutions, a special agent selected by the department to do work relating to 31 financial institutions, the commissioner or deputy commissioner, or the director of
01 banking may not be an officer, employee, director, trustee, attorney, shareholder, or 02 partner of a financial institution, or receive, directly or indirectly, a payment or 03 gratuity from a financial institution. A person subject to this section may not borrow 04 money from a state financial institution [THAT HAS A CERTIFICATE OF 05 AUTHORITY UNDER THIS TITLE], except as provided in this section. 06 * Sec. 11. AS 06.05.065(b) is amended to read: 07 (b) A person subject to this section may 08 (1) be a depositor in a financial institution; 09 (2) purchase shares of a savings and loan association on the same 10 terms available to the public; 11 (3) be a member of an employee credit union; 12 (4) be indebted to a state financial institution upon an installment debt 13 incurred by the employee in the purchase of goods for personal use only and 14 transferred to the financial institution in the regular course of business, including debts 15 for household goods, mobile homes, motor vehicles, or boats; or 16 (5) retain a preexisting extension of credit that was incurred before 17 commencement of the employment that subjected the person to this section; any 18 renegotiation of a preexisting extension of credit shall be treated as a new 19 extension of credit that is subject to the prohibitions of this section [BE 20 INDEBTED TO A STATE FINANCIAL INSTITUTION FOR A MORTGAGE 21 LOAN SECURED BY THE PERSON'S PRIMARY RESIDENCE, IF THE LOAN 22 CLOSED BEFORE THE PERSON BECAME AN EMPLOYEE SUBJECT TO THIS 23 SECTION]. 24 * Sec. 12. AS 06.05.205 is repealed and reenacted to read: 25 Sec. 06.05.205. Loans and extensions of credit. (a) The total loans and 26 extensions of credit by a state bank to a person outstanding at one time and not fully 27 secured, as determined in a manner consistent with (b) of this section, by collateral 28 having a market value at least equal to the amount of the loan or extension of credit 29 may not exceed 15 percent of the unimpaired capital and unimpaired surplus of the 30 state bank. 31 (b) The total loans and extensions of credit by a state bank to a person
01 outstanding at one time and fully secured by readily marketable collateral having a 02 market value, as determined by reliable and continuously available price quotations, at 03 least equal to the amount of the money outstanding, may not exceed 10 percent of the 04 unimpaired capital and unimpaired surplus of the state bank. The limitation in this 05 subsection is separate from and in addition to the limitation contained in (a) of this 06 section. 07 (c) The limitations contained in (a) and (b) of this section are subject to the 08 following exceptions: 09 (1) loans or extensions of credit arising from the discount of 10 commercial or business paper evidencing an obligation to the person negotiating it 11 with recourse are not subject to a limitation based on unimpaired capital and 12 unimpaired surplus; 13 (2) the purchase of bankers' acceptances described in AS 06.05.275 14 and issued by other banks are not subject to a limitation based on unimpaired capital 15 and unimpaired surplus; 16 (3) loans or extensions of credit secured by bills of lading, warehouse 17 receipts, or similar documents transferring or securing title to readily marketable 18 staples are subject to a limitation of 35 percent of unimpaired capital and unimpaired 19 surplus in addition to the general limitations if the market value of the staples securing 20 each additional loan or extension of credit at all times equals or exceeds 115 percent of 21 the outstanding amount of the loan or extension of credit; in order to be considered 22 under this paragraph, the staples must be fully covered by insurance whenever it is 23 customary to insure those staples; 24 (4) loans or extensions of credit secured by bonds, notes, certificates of 25 indebtedness, or treasury bills of the United States or by other such obligations fully 26 guaranteed as to principal and interest by the United States are not subject to a 27 limitation based on unimpaired capital and unimpaired surplus; 28 (5) loans or extensions of credit to, or secured by unconditional takeout 29 commitments or guarantees of, any department, agency, bureau, board, commission, 30 or establishment of the United States or a corporation wholly owned directly or 31 indirectly by the United States are not subject to a limitation based on unimpaired
01 capital and unimpaired surplus; 02 (6) loans or extensions of credit secured by a segregated deposit 03 account in the lending state bank are not subject to a limitation based on unimpaired 04 capital and unimpaired surplus; 05 (7) loans or extensions of credit to a bank or to a receiver, conservator, 06 superintendent of banks, or other agent in charge of the business and property of that 07 bank, if approved by the department, are not subject to a limitation based on 08 unimpaired capital and unimpaired surplus; 09 (8) loans or extensions of credit arising from the discount of negotiable 10 or non-negotiable installment consumer paper that carries a full recourse endorsement 11 or unconditional guarantee by the person transferring the paper are subject under this 12 section to a maximum limitation equal to 25 percent of unimpaired capital and 13 unimpaired surplus, notwithstanding the collateral requirements set out in (b) of this 14 section; however, if the state bank's files or the knowledge of its officers of the 15 financial condition of each maker of that consumer paper is reasonably adequate, and 16 an officer of the state bank designated for that purpose by the board of directors of the 17 state bank certifies in writing that the state bank is relying primarily upon the 18 responsibility of each maker for payment of the loans or extensions of credit and not 19 upon any full or partial recourse endorsement or guarantee by the transferor, the 20 limitations of (a) and (b) of this section as to the loans or extensions of credit of each 21 such maker are the sole applicable loan limitations; 22 (9) loans or extensions of credit secured by shipping documents or 23 instruments transferring or securing title covering livestock or giving a lien on 24 livestock when the market value of the livestock securing the obligation is not at any 25 time less than 115 percent of the face amount of the note covered are subject under 26 this section, notwithstanding the collateral requirements set out in (b) of this section, 27 to a maximum limitation equal to 25 percent of unimpaired capital and unimpaired 28 surplus; 29 (10) loans or extensions of credit, arising from the discount by dealers 30 in dairy cattle of paper given in payment for dairy cattle and carrying a full recourse 31 endorsement or unconditional guarantee of the seller, that are secured by the cattle
01 being sold are subject under this section, notwithstanding the collateral requirements 02 set out in (b) of this section, to a maximum limitation equal to 25 percent of 03 unimpaired capital and unimpaired surplus. 04 (d) Except with the written prior approval of the department for an acquisition 05 or merger with another financial institution, or except with the written prior approval 06 of the department in order to prevent loss upon an indebtedness previously contracted 07 in good faith, a state bank may not 08 (1) accept as security for a loan the capital stock of the state bank; 09 (2) accept as security for a loan the capital stock of the state bank's 10 parent holding companies, unless the stock of the holding companies is publicly traded 11 on a nationally recognized exchange; or 12 (3) loan money that is to be used to purchase the capital stock of the 13 state bank or a parent holding company of the state bank. 14 (e) The department may adopt regulations to administer and carry out the 15 purposes of this section, including, notwithstanding any contrary provision of this 16 section, regulations to define or further define terms used in this section in order to 17 establish limits or requirements other than those specified in this section for particular 18 classes or categories of loans or extensions of credit. 19 (f) For purposes of this section, the department may determine when a loan 20 putatively made to a person shall be attributed to another person. 21 (g) In this section, "person" means an individual, sole proprietorship, 22 partnership, joint venture, association, trust, estate, business trust, corporation, or any 23 similar entity or organization. 24 * Sec. 13. AS 06.05.209(b) is amended to read: 25 (b) A state bank may issue a credit card or other similar credit granting device 26 to a customer for obtaining money, goods, services, or anything else of value, and, 27 notwithstanding AS 45.45.010, the state bank, when credit is extended under this 28 section, may impose a service charge at a monthly rate as agreed upon by contract 29 between the state bank and the customer receiving the credit granting device 30 [THAT RESULTS IN AN ANNUAL RATE NOT IN EXCESS OF 17 PERCENT ON 31 THE OUTSTANDING BALANCE. HOWEVER, IN ADDITION, WHEN CASH IS
01 ADVANCED UNDER THIS SECTION, THE BANK MAY IMPOSE A SETUP 02 CHARGE THAT DOES NOT EXCEED THREE PERCENT OF THE FUNDS 03 ADVANCED, OR $12, WHICHEVER IS LESS, EXCEPT THAT ON LOANS OF 04 UNDER $100 A MINIMUM NOT EXCEEDING $3 MAY BE CHARGED]. 05 * Sec. 14. AS 06.05.210(a) is amended to read: 06 (a) Subject to the same terms and conditions applicable to other loans, a 07 director or executive [,] officer [, OR EMPLOYEE] of a state bank may borrow up to 08 $100,000, or up to $250,000 for the director's or executive [,] officer's [, OR 09 EMPLOYEE'S] primary residence, from the state bank at the discretion of the chief 10 executive or managing officer of the state bank. A loan to a director or executive [,] 11 officer [, OR EMPLOYEE] that makes the total amount owed to the state bank by the 12 director or executive [,] officer [, OR EMPLOYEE] in excess of the limits in this 13 subsection, or loans of any amount to the chief executive or managing officer of the 14 state bank, shall have the prior approval of the board of directors, shall be reported to 15 the department within 30 days, and shall be secured by adequate collateral. 16 * Sec. 15. AS 06.05.210 is amended by adding a new subsection to read: 17 (c) Notwithstanding (a) of this section, loans to directors, executive officers, 18 and other officers and employees of a state bank are subject to the lending limits 19 imposed by AS 06.05.205 and the regulations adopted under that section. 20 * Sec. 16. AS 06.05 is amended by adding a new section to read: 21 Sec. 06.05.237. Financial holding companies. Notwithstanding the 22 provisions of AS 06.05.235 and regulations adopted under that section, a holding 23 company formed under this title may apply to the Federal Reserve System for status as 24 a financial holding company. If the status is granted, the financial holding company 25 has powers as a financial holding company authorized by the Federal Reserve System 26 if 27 (1) at the time of application, the holding company provides the 28 department with a complete copy of the application; 29 (2) the holding company provides the department with copies of all 30 correspondence concerning the application; 31 (3) the holding company provides the department with a copy of the
01 approval by the Federal Reserve System within 10 days after the holding company 02 receives the approval; and 03 (4) the department does not issue a letter denying financial holding 04 company status within 30 days after the approval by the Federal Reserve System. 05 * Sec. 17. AS 06.05.245 is amended to read: 06 Sec. 06.05.245. Disposition of property not needed in the conduct of a 07 banking business. All investments in real and personal property, regardless of how 08 acquired, not permitted [NECESSARY FOR THE CONVENIENT 09 TRANSACTION OR PROMOTION OF A BANKING BUSINESS] under 10 AS 06.05.230 that come [COMES] into the possession of a state bank shall be 11 disposed of as soon as possible. If the real or personal property is not sold within the 12 time limit set [PRESCRIBED] by the department in regulations, it shall be written off 13 and may not be carried as an asset of the state bank. 14 * Sec. 18. AS 06.05.272(b) is amended to read: 15 (b) Under this section, a state bank's total investment in its subsidiaries 16 may not exceed that which is permissible for a federally chartered bank's total 17 investment in all subsidiaries as set out in 12 U.S.C. 24a, as amended [BANK 18 MAY INVEST IN SUBSIDIARIES AN AMOUNT EQUAL TO THE LESSER OF 19 20 PERCENT OF ITS TOTAL ASSETS OR 50 PERCENT OF ITS TOTAL 20 CAPITAL ACCOUNTS]. Loans to subsidiaries are considered investments subject to 21 the limitations of this subsection. 22 * Sec. 19. AS 06.05.301(a) is amended to read: 23 (a) Except for national banks with a principal place of business in the state, 24 and interstate state banks and international banks with a certificate of authority under 25 AS 06.05.555, a corporation may not engage in the banking business unless the 26 corporation is organized under AS 10.06 (Alaska Corporations Code) and this title. 27 * Sec. 20. AS 06.05.350(d) is amended to read: 28 (d) Except as authorized under this section, a person may not 29 (1) engage in the business of receiving deposits, discounting evidences 30 of indebtedness, or receiving money for transmission; 31 (2) represent that the person is [, OR ACTS FOR,] a bank; or
01 (3) use any form of the word "bank" in the person's name unless 02 the person is a state bank formed under this title or a bank formed under the 03 authority of another state or an agency of the federal government, or unless it is 04 clear that the use does not represent that the person is a bank; the prohibition in 05 this paragraph does not apply to a food bank, blood bank, or similar 06 organization that cannot readily be confused with a bank [AN ARTIFICIAL OR 07 CORPORATE NAME THAT PURPORTS TO BE OR SUGGESTS THAT IT IS 08 THE NAME OF A BANK]. 09 * Sec. 21. AS 06.05.350 is amended by adding a new subsection to read: 10 (e) A person prohibited by (d)(3) of this section from using any form of the 11 word "bank" in its name may apply to the commissioner for authority to use a form of 12 the word "bank" in its name. 13 * Sec. 22. AS 06.05.426(b) is amended to read: 14 (b) A state bank may establish, maintain, and operate an automated teller 15 machine at a location other than bank premises by notifying the department 30 days 16 before the date of establishment [WITH THE PRIOR APPROVAL OF THE 17 DEPARTMENT]. An automated teller machine operated off bank premises shall be 18 made available on a nondiscriminatory basis for use by depositors of other 19 depository institutions [BANKS] authorized to do business in the state [AND THEIR 20 CUSTOMERS], upon the agreement of the other depository institutions [BANKS] to 21 pay a fair and equitable amount for the use of the machine. 22 * Sec. 23. AS 06.05.426(c) is repealed and reenacted to read: 23 (c) The notice required in (b) of this section must include 24 (1) the location and general description of the surrounding area, 25 including a description of the business establishment, if any, in which the machine will 26 be located; 27 (2) the manner of operation and the kinds of transactions that the 28 machine will perform; 29 (3) the names of the other depository institutions that will share the 30 machine's services; and 31 (4) other information required by the department.
01 * Sec. 24. AS 06.05.426(d) is amended to read: 02 (d) A state bank may invest in a corporation organized to operate machines 03 that perform automated teller services for two or more depository institutions 04 [BANKS, IF EACH BANK OWNS PART OF THE CAPITAL STOCK OF THE 05 CORPORATION]. 06 * Sec. 25. AS 06.05.426 is amended by adding a new subsection to read: 07 (e) A person may not establish or operate an automated teller machine that 08 accepts deposits unless those deposits are insured by the Federal Deposit Insurance 09 Corporation or another agency of the United States that insures deposits. 10 * Sec. 26. AS 06.05.435(c) is amended to read: 11 (c) Unless otherwise approved by the department, each director of a state 12 bank shall own, in the director's own right or jointly with the director's spouse, free of 13 any encumbrance, common or preferred stock of the state bank or of an entity that 14 controls the state bank that has an aggregate par value of at least $1,000, an 15 aggregate shareholder's equity of at least $1,000, or an aggregate fair market 16 value of at least $1,000 [CAPITAL STOCK OF THE BANK IN AN AMOUNT 17 EQUAL TO AT LEAST $1,000 IN PAR VALUE]. 18 * Sec. 27. AS 06.05.435 is amended by adding new subsections to read: 19 (h) In the case of an entity that owns more than one bank, a director may use 20 the director's equity interest in the controlling entity to satisfy, in whole or in part, the 21 equity interest requirement for one or all of the controlled banks. 22 (i) The value of the common or preferred stock held by a director of a state 23 bank or of an entity that controls the state bank is valued as of the date purchased, or 24 as of the date on which the individual became a director, whichever value is greater. 25 * Sec. 28. AS 06.05.550 is amended to read: 26 Sec. 06.05.550. Authority of international bank, [OR] interstate state 27 bank, or interstate national bank to branch. (a) An international bank, [OR] an 28 interstate state bank, or an interstate national bank whose deposits are insured by 29 the Federal Deposit Insurance Corporation [,] may acquire a branch bank as the result 30 of a merger or consolidation of the international bank, [OR] interstate state bank, or 31 interstate national bank with, or the purchase of all or substantially all of the assets
01 of, a state bank, a national bank with its principal office in this state, or a branch of the 02 state bank or national bank, unless the state bank or national bank is a recently formed 03 bank. 04 (b) An international bank may establish a new branch bank in this state or 05 acquire a recently formed bank [,] if the department approves the establishment or 06 acquisition before the establishment or acquisition occurs. An interstate state bank or 07 interstate national bank may not establish a branch bank in this state unless the 08 establishment occurs through an acquisition under (a) of this section of a bank located 09 in the state. An interstate state bank or interstate national bank may not establish a 10 new branch bank in this state. 11 (c) An interstate state bank, interstate national bank, or international bank 12 that opens, occupies, or maintains a branch bank in the state has the same powers 13 under the laws of the state as a state or national bank of the same type. 14 * Sec. 29. AS 06.05.555(a) is amended to read: 15 (a) Before acquiring a branch bank under AS 06.05.550(a) or establishing a 16 branch bank under AS 06.05.550(b), an interstate state bank or international bank 17 shall file an application with the department for and receive a certificate of authority to 18 operate a branch bank. The application must include 19 (1) all information and fees required under AS 06.05.399; 20 (2) the name of the bank and the address of its principal office; 21 (3) if an international bank, the country under whose laws it is 22 organized; 23 (4) the amount of the bank's capital actually paid in cash and the 24 amount subscribed for and unpaid; 25 (5) a complete and detailed statement of the bank's financial condition; 26 (6) the names of all other states and countries in which the bank is 27 admitted or qualified to do business; 28 (7) a copy of the bank's charter, articles of incorporation, and bylaws, 29 as applicable; 30 (8) if an international bank, evidence satisfactory to the department 31 that the bank is authorized to conduct a banking business under the laws of the country
01 of its organization, and the nature of the bank's business; 02 (9) a properly executed designation of the department as the bank's 03 agent for service of process in an action or proceeding arising out of a transaction 04 involving the branch bank; the designation must include the name and address of the 05 officer, agent, or other person to whom the department is to forward the process; and 06 (10) other information necessary or appropriate for the department to 07 determine whether the bank is entitled to a certificate of authority from the 08 department. 09 * Sec. 30. AS 06.05.555(b) is amended to read: 10 (b) The department shall notify the interstate state bank or international bank 11 of its action on the application. If the application and the accompanying documents do 12 not comply with the requirements of (a) of this section, the department shall return 13 them with an explanation of the noncompliance. If the department does not respond 14 within 30 days of its receipt of the application, the application is considered to be 15 accepted. 16 * Sec. 31. AS 06.05.555(c) is amended to read: 17 (c) The interstate state bank or international bank shall publish notice of the 18 application in the manner provided in AS 06.05.344(d) - (e). The notice must state the 19 proposed location of the branch bank. 20 * Sec. 32. AS 06.05.555(d) is amended to read: 21 (d) Upon acceptance of the application, the department shall conduct an 22 investigation to determine that 23 (1) if an interstate state bank, 24 (A) the laws of the home state of the bank authorize a state 25 bank of this state to acquire a branch bank in the home state without conditions 26 or restrictions on the operations of the branch bank; and 27 (B) the bank supervisor of the home state of the bank has 28 agreed to provide to the department the examination reports that the 29 department determines sufficient to permit the department to determine on a 30 current basis the financial condition of the bank; 31 (2) the proposal is consistent with a sound and competitive banking
01 system; 02 (3) the capital structure of the bank is adequate in relation to the 03 anticipated business and costs of operating the branch bank; 04 (4) the name of the bank is not deceptively similar to the name of 05 another branch bank or state bank and is not otherwise misleading; and 06 (5) the other requirements of this chapter have been met. 07 * Sec. 33. AS 06.05.555(e) is amended to read: 08 (e) Not later than 150 days after the department accepts an application by an 09 interstate state bank or international bank for a certificate of authority to operate a 10 branch bank, the department shall make a determination whether to approve the 11 application. Within 30 days after the second publication of the notice referred to in (c) 12 of this section, a person opposing the pending application may file written objections 13 with the department. When it approves or denies the application, the department shall 14 notify the bank and any other person who requested in writing to be notified, and, if 15 the application is denied, the department shall state the reasons for its decision. 16 * Sec. 34. AS 06.05.555(f) is amended to read: 17 (f) The department shall issue a certificate of authority to an interstate state 18 bank or international bank to operate a branch bank if 19 (1) the conditions imposed by the department in granting the certificate 20 have been fulfilled; and 21 (2) the requirements of this chapter are satisfied. 22 * Sec. 35. AS 06.05 is amended by adding a new section to read: 23 Sec. 06.05.557. Notice filing for interstate national banks. An interstate 24 national bank acquiring a branch in this state under AS 06.05.550 shall file a notice of 25 the acquisition with the department along with a copy of the application filed with the 26 agency that primarily regulates the interstate national bank. The notice and copy of 27 the application shall be filed with the department at the same time the application is 28 filed with the agency that primarily regulates the interstate national bank. 29 * Sec. 36. AS 06.05.565(a) is amended to read: 30 (a) An interstate state bank or international bank operating a branch bank in 31 the state is subject to the provisions of this title [,] and the regulations adopted and
01 orders issued under this title, except for the residency requirements in 02 AS 06.05.435(a). 03 * Sec. 37. AS 06.05.565(c) is amended to read: 04 (c) A branch bank of an interstate state bank or international bank operating 05 in the state is subject to examination under AS 06.01.015 and assessments under 06 AS 06.01.010. Assessments under AS 06.01.010(d) are based on the branch bank's 07 total deposits in the state. 08 * Sec. 38. AS 06.05.565(d) is amended to read: 09 (d) When the department considers it necessary to protect the public interest, 10 the department or a competent person designated by the department may examine an 11 interstate state bank or international bank with a branch in the state. The interstate 12 state bank or international bank shall pay an examination fee established under 13 AS 06.01.010. 14 * Sec. 39. AS 06.05.565(e) is amended to read: 15 (e) The department may require periodic reports from an interstate state 16 bank or an interstate national bank [OUT-OF-STATE DEPOSITORY 17 INSTITUTION] that maintains a branch in this state and from a bank holding 18 company that controls the interstate state bank or interstate national bank [OUT- 19 OF-STATE DEPOSITORY INSTITUTION]. The reports shall be made under oath 20 and filed as frequently as required by the department. The reports must contain the 21 information and detail that the department determines to be appropriate to assure 22 continuing compliance of the interstate state bank or interstate national bank 23 [OUT-OF-STATE DEPOSITORY INSTITUTION] with the provisions 24 [PROVISION] of this title. 25 * Sec. 40. AS 06.05.565 is amended by adding a new subsection to read: 26 (g) An interstate national bank operating a branch bank in this state is subject 27 to the provisions of AS 06.05.548 and 06.05.550 and the regulations adopted and 28 orders issued under those sections. 29 * Sec. 41. AS 06.05.570(a) is amended to read: 30 (a) An out-of-state bank holding company may acquire and own all or a 31 portion of the voting securities or other capital stock of, or all or substantially all of the
01 assets of, one or more state banks, domestic bank holding companies, or national 02 banks conducting a banking business in the state, unless the state bank or national 03 bank is a recently formed bank. Before an out-of-state bank holding company may 04 acquire a state bank or bank holding company of a state bank doing business in this 05 state, the out-of-state bank holding company shall apply for and obtain a permit from 06 the department. In considering whether to issue a permit, the department shall 07 consider the benefits to the public, the preservation of a competitive banking industry, 08 and the maintenance of a safe and sound bank industry. To assure full protection of 09 the public, the department may require an out-of-state bank holding company that 10 directly or indirectly owns, holds, or controls stock in a state bank or domestic bank 11 holding company to post a bond with the department under conditions established by 12 the department. The amount of the bond may not be more than the product obtained 13 by multiplying the amount of paid-in capital and paid-in surplus of the state bank or 14 domestic bank holding company by the percentage of state bank or domestic bank 15 holding company stock directly or indirectly owned, held, or controlled by the out-of- 16 state bank holding company. 17 * Sec. 42. AS 06.05.990(13) is amended to read: 18 (13) "financial institution" means an institution subject to the 19 regulation of the department under this title; in this paragraph, "institution" 20 includes a commercial bank, savings bank, credit union, premium finance 21 company, small loan company, bank holding company, financial holding 22 company, trust company, and savings and loan association; 23 * Sec. 43. AS 06.05.990(19) is repealed and reenacted to read: 24 (19) "loan" includes an extension of credit resulting from direct or 25 indirect negotiations between a lender and a debtor; 26 * Sec. 44. AS 06.05.990(22) is amended to read: 27 (22) "recently formed bank" means a state bank or national bank that 28 conducts a banking business in the state and that commenced the banking business in 29 the state on or after July 1, 1982, and that has not been in existence and continuously 30 operating in the state for a period of three years or more; "recently formed bank" does 31 not include
01 (A) a bank organized solely for the purpose of facilitating 02 acquisition of a bank that either has been in existence and continuously 03 operating in the state as a bank for a three-year period, or was conducting a 04 banking business in the state on or before June 30, 1982; 05 (B) a state bank that the department determines was not created 06 directly or indirectly by an acquiring interstate state bank, interstate national 07 bank, international bank, or out-of-state bank holding company, and that does 08 not have the capacity to continue to conduct its business independently in a 09 manner consistent with the public interest and the interest of depositors, 10 creditors, and shareholders; or 11 (C) a national bank that the board of governors of the Federal 12 Reserve System, or their designee, determines is not chartered directly or 13 indirectly by an acquiring out-of-state bank holding company, and that does 14 not have the capacity to conduct its business independently in a manner 15 consistent with the public interest of depositors, creditors, and shareholders; 16 * Sec. 45. AS 06.05.990(24) is amended to read: 17 (24) "state financial institution" means a financial institution that is 18 organized under this title or that is subject to examination by the department 19 under this title; 20 * Sec. 46. AS 06.05.990 is amended by adding new paragraphs to read: 21 (29) "extension of credit" means a negotiable instrument, and includes 22 promissory notes, acknowledgments of advance, due bills, invoices, overdrafts, 23 acceptances, and similar written or oral obligations or evidence of debt whether 24 secured or unsecured; in this paragraph, "negotiable instrument" has the meaning 25 given in AS 45.03.104; 26 (30) "financial holding company" means an existing, or newly formed, 27 domestic bank holding company that has been approved as a financial holding 28 company by the Federal Reserve System and not denied that status by the department 29 under AS 06.05.237; 30 (31) "interstate national bank" means a national bank whose principal 31 office, as designated in its articles of incorporation, is not located in this state;
01 (32) "interstate state bank" means a person organized under the laws of 02 another state and holding a charter, license, or certificate of authority from another 03 state to engage in a banking business. 04 * Sec. 47. AS 06.15.100 is repealed and reenacted to read: 05 Sec. 06.15.100. Prohibited conduct of trustees. A trustee may not 06 (1) receive remuneration as trustee except reasonable fees for 07 attendance at meetings of trustees or for services as a member of a committee of 08 trustees; 09 (2) use the position as trustee, or knowingly allow it to be used, to 10 obtain preferential terms in dealings with the mutual bank for which the person is 11 trustee; 12 (3) use the position as trustee, or knowingly allow it to be used, to 13 induce an actual or prospective borrower from the mutual bank for which the person is 14 trustee to purchase goods or services at a direct or indirect profit to the trustee. 15 * Sec. 48. AS 06.15 is amended by adding a new section to read: 16 Sec. 06.15.105. Trustee borrowing. A person may borrow money from the 17 mutual bank for which the person is trustee to the same extent that a director may 18 borrow money under AS 06.05.210. 19 * Sec. 49. AS 06.20.010 is amended by adding a new subsection to read: 20 (b) A person who is doing business under and as permitted by any law of the 21 state or of the United States relating to banks, savings banks, trust companies, building 22 and loan associations, or credit unions and who is exempt from the licensing 23 requirement in (a) of this section shall comply with all other provisions of this chapter. 24 * Sec. 50. AS 06.45.020(a) is amended to read: 25 (a) Seven or more natural persons who desire to form a credit union shall 26 subscribe before an officer competent to administer oaths, articles of incorporation in 27 duplicate that must state 28 (1) the name of the credit union; 29 (2) the location of the credit union and the territory in which it will 30 operate; 31 (3) the names and addresses of the subscribers to the certificate and the
01 number of shares each subscribed; 02 (4) the par value of the shares, which must [SHALL] be a minimum 03 of $5 each; 04 (5) the proposed field of membership specified in detail; 05 (6) the term of the existence of the credit union, which may be 06 perpetual; and 07 (7) the fact that the articles of incorporation are adopted to enable the 08 persons to avail themselves of the advantages of this chapter. 09 * Sec. 51. AS 06.45.060(5) is amended to read: 10 (5) make loans, the maturities of which may not exceed 20  years 11 except as provided in this chapter, and extend lines of credit to its members, to other 12 credit unions, and to credit union organizations and participate with other credit 13 unions, credit union organizations, or financial organizations in making loans to credit 14 union members in accordance with the following: 15 (A) loans to members shall be made in conformity with 16 regulations adopted by the commissioner, except that 17 (i) a residential real estate loan that [WHICH] is made 18 to finance the acquisition of a one- to four-family dwelling for the 19 principal residence of a credit union member that [WHICH] is secured 20 by a first lien on the dwelling may have a maturity not exceeding 30 21 years; 22 (ii) a loan to finance the purchase of a mobile home 23 that [, WHICH] is secured by a first lien on the mobile home, to be 24 used as the residence of a credit union member, or for the repair, 25 alteration, or improvement of a residential dwelling that is the residence 26 of a credit union member must [SHALL] have a maturity not to exceed 27 20  years unless the loan is insured or guaranteed under (iii) of this 28 subparagraph; 29 (iii) a loan secured by the insurance or guarantee of the 30 federal government, of a state government, or an agency of either may 31 be made for the maturity and under the terms and conditions specified
01 in the law under which the insurance or guarantee is provided; 02 (iv) a loan or aggregate of loans to a director or member 03 of the supervisory or credit committee of the credit union making the 04 loan that [WHICH] exceeds $20,000 [$5,000] plus pledged shares shall 05 be approved by the board of directors; 06 (v) loans to other members for which directors or 07 members of the supervisory or credit committee act as guarantor or 08 endorser shall be approved by the board of directors when the loans 09 standing alone or when added to an outstanding loan or loans of the 10 guarantor or endorser exceed $20,000 [$5,000]; 11 (vi) the rate of interest may not exceed the greater of 15 12 percent a year or the rate specified in AS 45.45.010(b); 13 (vii) the taking, receiving, reserving, or charging of a 14 rate of interest greater than is allowed by this paragraph, when 15 knowingly done, is considered a forfeiture of the entire interest that the 16 note, bill, or other evidence of debt carries with it, or that has been 17 agreed to be paid on the note, bill, or other evidence of debt; if a greater 18 rate of interest has been paid, the person by whom it has been paid or 19 the person's legal representatives may recover back from the credit 20 union taking or receiving it the entire amount of interest paid, but the 21 action must be commenced within two years from the time the usurious 22 collection was made; 23 (viii) a borrower may repay a loan before maturity in 24 whole or in part on any business day without penalty; 25 (ix) loans shall be paid or amortized under regulations 26 adopted by the commissioner that consider the needs or conditions of 27 the borrowers, the amounts and duration of the loans, the interests of 28 the members and the credit union, and other factors established in 29 regulations adopted by the commissioner; 30 (x) the total dollar amount of real estate loans and 31 mobile home loans outstanding may not exceed 25 percent of the assets
01 of the credit union without the written approval of the commissioner; 02 (xi) a credit union with assets of less than $3,000,000 03 may make real estate loans with maturities in excess of 15 years only 04 with the approval of the commissioner; 05 (B) a self-replenishing line of credit to a borrower may be 06 established to a stated maximum amount on terms and conditions that may be 07 different from terms and conditions established for another borrower; 08 (C) loans to other credit unions require the approval of the 09 board of directors of the loaning credit union; 10 (D) loans to credit union associations require the approval of 11 the board of directors of the credit union and may not exceed one percent of 12 the paid-in and unimpaired capital and surplus of the credit union; 13 (E) participation loans with other credit unions, credit union 14 associations, or financial organizations shall be made in accordance with 15 written policies of the board of directors of the credit union, except that a credit 16 union that originates a loan for which participation arrangements are made in 17 accordance with this section shall retain an interest not less than 10 percent of 18 the face amount of the loan; 19 * Sec. 52. AS 06.45.060(7) is amended by adding new subparagraphs to read: 20 (L) in bankers' acceptances issued by a financial institution 21 whose accounts are insured by an agency of the federal government; 22 (M) in stock of a federal home loan bank; the investment must 23 be limited to the minimum amount of stock required for membership in the 24 federal home loan bank, plus any additional stock purchase required to obtain 25 an advance of funds from a federal home loan bank; 26 (N) in obligations of, or issued by, a state or political 27 subdivision of the state, except that a credit union may not invest more than 10 28 percent of its unimpaired capital and surplus in the obligations of any one 29 issuer, exclusive of general obligations of the issuer; in this subparagraph, 30 "political subdivision of the state" includes an agency, corporation, or 31 instrumentality of a state or political subdivision;
01 * Sec. 53. AS 06.45.060 is amended by adding a new paragraph to read: 02 (16) issue solicited or unsolicited credit cards or other similar credit 03 granting devices to a member for obtaining money, goods, services or anything else of 04 value; notwithstanding (5)(A)(vi) of this section and AS 45.45.010, when credit is 05 extended under this section, the credit union may impose a service charge at a monthly 06 rate as agreed upon by contract between the credit union and the member receiving the 07 credit granting device, but the credit union may not hold the member liable for charges 08 made on a credit card or other credit granting device before its acceptance by the 09 member; before an unsolicited card is considered accepted by the member, the 10 member shall execute and furnish to the credit union a written statement of 11 acceptance; in addition, a credit union may charge fees for credit cards or other similar 12 credit granting devices. 13 * Sec. 54. AS 06.45 is amended by adding a new section to read: 14 Sec. 06.45.295. Automated teller machines. (a) A state credit union may 15 establish, maintain, and operate an automated teller machine on the premises of the 16 main office or a branch office of the state credit union. 17 (b) A state credit union may establish, maintain, and operate an automated 18 teller machine at a location other than credit union premises by notifying the 19 department 30 days before the date of establishment. An automated teller machine 20 operated off credit union premises shall be made available on a nondiscriminatory 21 basis for use by depositors of other depository institutions authorized to do business in 22 the state and their customers, upon the agreement of the other depository institutions 23 to pay a fair and equitable amount for the use of the machine. 24 (c) The notice required by (b) of this section must include 25 (1) the location and general description of the surrounding area, 26 including a description of the business establishment, if any, in which the machine will 27 be located; 28 (2) the manner of operation and the kinds of transactions that the 29 machine will perform; 30 (3) the names of the other depository institutions that will share the 31 machine's services; and
01 (4) other information required by the department. 02 (d) A state credit union may invest in a corporation organized to operate 03 machines that perform automated teller services for two or more depository 04 institutions. 05 (e) A person may not establish or operate an automated teller machine that 06 accepts deposits unless those deposits are insured by the National Credit Union Share 07 Insurance Fund or another agency of the United States that insures deposits. 08 * Sec. 55. AS 06.05.005(b)(3), 06.05.175, 06.05.272(d), 06.05.990(18); and 09 AS 06.20.330(a) are repealed. 10 * Sec. 56. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 INDIRECT COURT RULE AMENDMENTS. AS 06.01.028(b), added by sec. 4 of 13 this Act, has the effect of changing Rule 45, Alaska Rules of Civil Procedure, Rules 17 and 14 37, Alaska Rules of Criminal Procedure, and Rule 24, Alaska Bar Rules, because 15 AS 06.01.028(b) requires court orders compelling disclosure to provide for reimbursement of 16 a financial institution's reasonable costs of complying with the order. 17 * Sec. 57. The uncodified law of the State of Alaska is amended by adding a new section to 18 read: 19 TRANSITION: REGULATIONS. Notwithstanding sec. 60 of this Act, the 20 Department of Community and Economic Development may immediately proceed to adopt 21 regulations necessary to implement the changes made by this Act. The regulations take effect 22 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 23 statutory changes. 24 * Sec. 58. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 INSTRUCTION TO REVISOR. The revisor of statutes is instructed to change the 27 heading of 28 (1) AS 06.05.555 from "Certificate of authority for interstate and international 29 branching" to "Certificate of authority for interstate state bank and international bank 30 branching"; and 31 (2) AS 06.05.565 from "Applicability of title to interstate or international
01 banks, to out-of-state depository institutions, and to bank holding companies" to 02 "Applicability of title to interstate state banks, interstate national banks, international banks, 03 and bank holding companies." 04 * Sec. 59. Section 57 of this Act takes effect immediately under AS 01.10.070(c). 05 * Sec. 60. Except as provided in sec. 59 of this Act, this Act takes effect July 1, 2001.