CSSB 149(FIN): "An Act revising the laws governing financial institutions and relating to trust companies, the Alaska Small Loans Act, and the Premium Financing Act; amending Alaska Rule of Criminal Procedure 17 and Alaska Rule of Civil Procedure 45(b); and providing for an effective date."
00CS FOR SENATE BILL NO. 149(FIN) 01 "An Act revising the laws governing financial institutions and relating to trust 02 companies, the Alaska Small Loans Act, and the Premium Financing Act; 03 amending Alaska Rule of Criminal Procedure 17 and Alaska Rule of Civil 04 Procedure 45(b); and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 06.01.010(e) is amended to read: 07 (e) An exam fee or other charge assessed to a state [STATE-CHARTERED] 08 financial institution under this section may not exceed a fee or other charge assessed 09 for the same type of exam or service to a similarly situated federally-chartered 10 financial institution. 11 * Sec. 2. AS 06.01.010(f) is amended to read: 12 (f) In this section "deposit institution" means a state financial [AN] institution 13 [CHARTERED UNDER THIS TITLE] that has obtained authority from the department 14 to receive deposits of the type eligible to be insured by an agency of the federal
01 government. 02 * Sec. 3. AS 06.01 is amended by adding a new section to read: 03 Sec. 06.01.015. EXAMINATIONS. (a) Financial institutions regulated under 04 this title are subject to at least one examination each year. The department may 05 conduct additional examinations at its discretion. 06 (b) The department shall select one or more competent persons to make 07 examinations of financial institutions. The examiner shall take and subscribe an oath 08 that 09 (1) the examiner will honestly and impartially examine into and report 10 the condition of the institution as to assets and liabilities and other information 11 required by the department; 12 (2) the examiner will not disclose the information the examiner obtains 13 through the examination to a person other than the department; 14 (3) at the time of employment, the examiner is not obligated to, or the 15 owner of an interest in, the institution and is not an officer or shareholder of the 16 institution; 17 (4) the examiner does not own more than five percent of the voting 18 shares in another financial institution in the state; and 19 (5) the examiner is not an officer or employee of another financial 20 institution in the state. 21 (c) The department shall promptly call to the attention of the directors of an 22 institution irregularities in the conduct of the financial institution's business and any 23 violations. The department shall send a copy of the report of examination to the 24 institution examined. 25 * Sec. 4. AS 06.01.020(a) is amended to read: 26 (a) Notwithstanding other provisions of this title, the department 27 [COMMISSIONER] may by regulation authorize financial institutions, except licensees 28 subject to AS 06.20 or AS 06.40, to exercise any of the powers conferred upon, or to 29 be subject to any of the limitations imposed upon, a [FEDERALLY CHARTERED 30 BANK, TRUST COMPANY, SAVINGS ASSOCIATION, FEDERALLY 31 CHARTERED CREDIT UNION, OR OTHER] federally chartered financial institution
01 doing business in this state with deposits insured by an agency of the federal 02 government [WHICH IS SUBJECT TO THE REGULATIONS OF THE UNITED 03 STATES COMPTROLLER OF THE CURRENCY, THE FEDERAL RESERVE 04 BOARD, THE FEDERAL HOME LOAN BANK BOARD, THE FEDERAL DEPOSIT 05 INSURANCE CORPORATION, THE NATIONAL CREDIT UNION 06 ADMINISTRATOR, OR THE SUCCESSOR OR SUCCESSORS OF THEM], if the 07 department [COMMISSIONER] finds that the exercise of the power or imposition of 08 the limitation both 09 (1) serves the public convenience and advantage; and 10 (2) equalizes and maintains the quality of competition between state 11 [STATE-CHARTERED] financial institutions and [CORRESPONDING] federally 12 chartered financial institutions. 13 * Sec. 5. AS 06.01 is amended by adding a new section to read: 14 Sec. 06.01.025. RECORDS OF DEPARTMENT. (a) Information in the 15 records of the department obtained through the administration of this title is 16 confidential, is not subject to subpoena, and may be revealed only with the consent of 17 the department. 18 (b) The department shall retain reports of examinations for five years. 19 * Sec. 6. AS 06.01.030 is repealed and reenacted to read: 20 Sec. 06.01.030. ORDERS AND INJUNCTIONS; NOTICE AND HEARINGS. 21 (a) Whenever it appears to the department that a person is engaging, has engaged, or 22 is about to engage in an unsafe or unsound practice in conducting the business of a 23 financial institution, or is violating, has violated, or is about to violate a provision of 24 this title or a regulation adopted or order issued under this title, the department may 25 (1) issue and serve on the person a notice of intent to issue an order 26 directing the person to cease and desist from continuing the act or practice, or 27 imposing a penalty under AS 06.01.035(e) - (g); or 28 (2) bring an action in the superior court to enjoin the act or practice. 29 (b) A notice issued under (a)(1) of this section must contain a statement of the 30 facts constituting the alleged violation or the unsafe or unsound practice, and must give 31 reasonable notice of and an opportunity for a hearing to determine whether an order
01 to cease and desist the act or practice should be issued. If a hearing is not requested 02 within 30 days, or if the person served or the person's representative fails to appear 03 at the hearing, the person is considered to have consented to the issuance of the order, 04 and the department may issue the order to cease and desist. If the department finds 05 at the hearing that a violation or an unsafe or unsound practice has been established, 06 the department may issue the order to cease and desist. 07 (c) A cease and desist order issued under (b) of this section may impose a 08 penalty under AS 06.01.035(e) - (g) and may require the person to cease and desist 09 from the act or practice and to take affirmative action to correct the conditions 10 resulting from the act or practice. 11 (d) Notwithstanding the other provisions of this section, the department may 12 issue a temporary cease and desist order at the same time that the department issues 13 a notice under (a)(1) of this section. The department may not issue a temporary cease 14 and desist order under this subsection without a prior hearing unless the order is issued 15 for the sole purpose of preserving the status quo and preventing damage to a financial 16 institution pending completion of any hearing. A temporary cease and desist order 17 issued under this subsection remains in effect until a final order is issued under (b) of 18 this section or until otherwise terminated by the department, except that the order may 19 not remain in effect for more than 60 days. 20 (e) Except for notices issued under (a)(1) of this section, the department shall 21 give public notice of each proposed action, but the department is not required to hold 22 a hearing before taking the action unless it receives written opposition to the proposed 23 action. Written opposition must be filed with the department within the time specified 24 by the department. In cases involving extraordinary circumstances requiring immediate 25 action, the department may take action without notice and public hearing, but upon 26 application to rescind the action taken, the department shall promptly hold a hearing 27 on the application. 28 (f) Hearings required or authorized under this title are not subject to 29 AS 44.62.330 - 44.62.630, except as required by AS 44.62.560 and 44.62.570. The 30 department shall adopt regulations, consistent with the provisions of this title, 31 establishing procedures for hearings held under this section.
01 (g) For the purpose of hearings, investigations, or other proceedings under this 02 title, and except as otherwise provided in this title, the department or an officer 03 designated by the commissioner may administer oaths and affirmations, subpoena 04 witnesses, compel the attendance of witnesses, take evidence, and require the 05 production of books, papers, correspondence, memoranda, agreements, or other 06 documents or records that the department considers relevant or material to the inquiry. 07 (h) In this section, "unsafe or unsound practice" means 08 (1) operating a bank while it is in an unsafe or unsound condition; 09 (2) doing an act that violates a law or order of the department, or the 10 bank's articles or bylaws; or 11 (3) doing an act reasonably likely to result in a bank's condition 12 becoming unsafe or unsound. 13 * Sec. 7. AS 06.01 is amended by adding a new section to read: 14 Sec. 06.01.035. PENALTIES. (a) A person who knowingly violates, or 15 causes another person to violate, a provision of this title, or a regulation or order of 16 the department under this title, for which a specific remedy is not provided, is guilty 17 of a class A misdemeanor. 18 (b) A person who, without first receiving a license or certificate of authority 19 from the department, participates in an activity that requires a license or certificate of 20 authority under this title, is guilty of a class A misdemeanor. 21 (c) A person is guilty of a class C felony if the person, with intent to deceive 22 the department, the commissioner, or a person authorized to examine the affairs of a 23 financial institution, knowingly 24 (1) makes or causes a false statement or report to be made; 25 (2) enters a false figure, statement, or entry in the books of a financial 26 institution; or 27 (3) makes or circulates a false report or statement about the condition 28 of a financial institution. 29 (d) A director, officer, or employee of a financial institution who receives a 30 deposit, after having been notified by regulatory authorities that the institution is 31 insolvent and without the department's prior approval, is guilty of a class C felony.
01 (e) In addition to other penalties applicable under this section, if a person other 02 than a financial institution knowingly or intentionally violates, or causes another person 03 to violate, a provision of this title, or a regulation or order of the department under this 04 title, the department may issue an order against the person imposing a civil penalty of 05 not more than $2,500 a day for a single violation, and not more than $25,000 for 06 multiple violations that constitute a single proceeding or a series of related 07 proceedings. 08 (f) In addition to other penalties applicable under this section, if a financial 09 institution knowingly or intentionally violates a provision of this title, or a regulation 10 or order of the department under this title, the department may issue an order against 11 the institution imposing a civil penalty of not more than $5,000 a day for a single 12 violation, and not more than $50,000 for multiple violations that constitute a single 13 proceeding or a series of related proceedings. 14 (g) For violations not covered by (e) or (f) of this section, and in addition to 15 other penalties applicable under this section, if a person, including a financial 16 institution, violates, or causes another person to violate, a provision of this title, or a 17 regulation or order of the department under this title, the department may issue an 18 order against the person imposing a civil penalty of not more than $500 a day for a 19 single violation, and not more than $5,000 for multiple violations that constitute a 20 single proceeding or a series of related proceedings. 21 (h) A financial institution that fails to file a report or make payments required 22 by the department within the time specified in this title is subject to a penalty of not 23 more than $100 a day for each day the report or payment is late. A financial 24 institution is considered to have transmitted a report or payment when the institution 25 mails the report or payment, properly addressed to the department and with the 26 appropriate postage. 27 (i) In addition to other penalties applicable under this section, the department 28 shall dismiss an employee of the department who violates AS 06.05.065(a). An 29 employee dismissed under this subsection is forever disqualified from holding a 30 position in the department relating to the regulation of financial institutions. An 31 employee who is dismissed under this subsection may appeal the dismissal under
01 AS 39.25 (State Personnel Act), unless the employee is in the exempt or partially 02 exempt service under AS 39.25.110 - 39.25.120. 03 * Sec. 8. AS 06.01 is amended by adding a new section to read: 04 Sec. 06.01.048. REGULATIONS. Regulations required or authorized under 05 this title shall be adopted under AS 44.62 (Administrative Procedure Act). 06 * Sec. 9. AS 06.05.005 is repealed and reenacted to read: 07 Sec. 06.05.005. POWERS OF DEPARTMENT. (a) The department shall 08 (1) exercise general supervision over all state financial institutions and 09 their subsidiaries and affiliated corporations; 10 (2) adopt regulations necessary to implement this chapter, including 11 regulations providing for the retention and preservation of bank records; 12 (3) review and approve or disapprove applications for new state banks 13 under AS 06.05.345, new bank branches under AS 06.05.399, and international or 14 interstate branch banks under AS 06.05.555; 15 (4) issue permits authorizing bank holding companies to do business 16 in this state under AS 06.05.235 and 06.05.570; 17 (5) determine for each state bank the amount of paid-in capital 18 necessary to operate under AS 06.05.305(a); 19 (6) review and approve transfers of bank ownership under 20 AS 06.05.327; 21 (7) perform examinations of state banks, branch banks, and subsidiaries 22 under AS 06.01.015. 23 (b) The department may 24 (1) relieve a bank from the examination requirements of AS 06.01.015 25 if the bank's deposits are insured by the Federal Deposit Insurance Corporation or 26 another agency of the United States that insures bank deposits; 27 (2) approve under AS 06.05.166(f) the operation of a branch bank on 28 a schedule different than normal banking days; 29 (3) approve under AS 06.05.426 the operation by a state bank of an 30 automated teller machine at a location other than the bank's premises; 31 (4) approve certain bank subsidiaries under AS 06.05.272;
01 (5) approve under AS 06.05.205(d) the acceptance by a bank of the 02 bank's stock or of the stock of the bank's holding company as security for a loan in 03 certain circumstances; 04 (6) restrict the withdrawal of deposits from a state bank where the 05 department finds that extraordinary circumstances make restriction necessary for the 06 proper protection of depositors; 07 (7) require a state bank to 08 (A) maintain its capital and reserve accounts in amounts 09 determined appropriate by the department, considering the size of the bank; 10 (B) observe the methods and standards that the bank adopts for 11 determining the value of various types of assets; 12 (C) charge off part or all of an asset that has not been lawfully 13 acquired; 14 (D) write down an asset to its market value; 15 (E) record liens and other interests in property; 16 (F) obtain a financial statement from a borrower or prospective 17 borrower to the extent that the bank can obtain the statement; 18 (G) obtain insurance against damage to real property taken as 19 security; 20 (H) search, or obtain insurance of, the title to real property 21 taken as security; 22 (I) maintain adequate insurance against other risks as the 23 department determines necessary and appropriate for the protection of 24 depositors and the public; 25 (J) charge off that portion of an asset classified as a loss, or 26 charge off or reserve up to 50 percent of loans classified as doubtful, in a state 27 or federal report of examination; or 28 (K) charge off all debts owed to the bank in which interest is 29 past due and unpaid for a period of six months, unless the debt principal is 30 adequately secured and the bank is in the process of collection; 31 (8) require the board of directors of a bank to hold a meeting under
01 AS 06.05.438(f); 02 (9) order the removal of a board member of a bank under 03 AS 06.05.435(g); 04 (10) order a bank to suspend the payment of dividends under 05 AS 06.05.441(b); 06 (11) require a bank to increase its capital accounts under 07 AS 06.05.305(c); 08 (12) take possession of a bank in the manner provided in 09 AS 06.05.468(c), and operate, reorganize, or liquidate the bank under AS 06.05.470 -06.05.474 after taking possession 10 under this paragraph; 11 (13) issue an order under AS 06.01.030 that the department determines 12 is necessary to ensure compliance with this chapter and regulations adopted under this 13 chapter; and 14 (14) exercise other powers expressly or implicitly granted in this 15 chapter. 16 * Sec. 10. AS 06.05.045(a) is amended to read: 17 (a) Each state bank shall make at least four reports of condition each year to 18 the department on days designated by, and on forms prescribed by, the department. 19 The report shall be signed by a duly authorized officer of the bank, and shall be 20 verified [BY AN OATH OF THE PRESIDENT, VICE PRESIDENT, OR CASHIER 21 AND] by at least three directors who certify [, CERTIFYING AND SUBSCRIBING] 22 under oath that they and each of them have personal knowledge of the facts stated in 23 the report and that the facts are true. The reports shall exhibit in detail and under 24 appropriate heads the resources and liabilities of the bank, and must be received by the 25 department within 30 calendar days after the end of the period covered by the report. 26 * Sec. 11. AS 06.05.065(a) is amended to read: 27 (a) A bank examiner of the department who deals with the regulation of 28 financial [LENDING] institutions, a special agent selected by the department to do 29 work relating to financial [LENDING] institutions, the commissioner or deputy 30 commissioner, or the director of banking may not be an officer, employee, director, 31 trustee, attorney, shareholder [STOCKHOLDER], or partner of a financial
01 [LENDING] institution, or receive, directly or indirectly, a payment or gratuity from 02 a financial [LENDING] institution. A person subject to this section may not borrow 03 money from a financial [STATE-CHARTERED LENDING] institution that has a 04 certificate of authority under this title, except as provided in this section. 05 * Sec. 12. AS 06.05.065(b) is amended to read: 06 (b) A person subject to this section may 07 (1) be a depositor in a financial [LENDING] institution; 08 (2) purchase shares of a savings and loan association on the same terms 09 available to the public; 10 (3) be a member of an employee credit union; 11 (4) be indebted to a state financial [STATE-CHARTERED LENDING] 12 institution upon an installment debt incurred by the employee in the purchase of 13 goods for personal use only and transferred to the financial [LENDING] institution 14 in the regular course of business [BY A SELLER OF GOODS], including debts for 15 [BUT NOT LIMITED TO] household goods, mobile homes, motor vehicles, or boats; 16 or 17 (5) be indebted to a state financial institution for a mortgage loan 18 secured by the person's primary residence, if the loan closed before the person 19 became an employee subject to this section [PURCHASED BY THE EMPLOYEE 20 FOR PERSONAL USE ONLY]. 21 * Sec. 13. AS 06.05.075 is amended to read: 22 Sec. 06.05.075. STANDARDS [IN REGULATIONS]. The department, in the 23 exercise of its authority [THE POWER TO ADOPT REGULATIONS] under this 24 chapter, shall act in the interests of promoting and maintaining a sound and 25 competitive banking system, the security of deposits and customers, the 26 [PRESERVATION OF THE] liquid position of banks, and [IN] the prevention of 27 [INTEREST OF PREVENTING] injurious credit expansions and contractions. 28 * Sec. 14. AS 06.05.100 is amended to read: 29 Sec. 06.05.100. DEPOSIT OF MINOR OR PERSON UNDER DISABILITY. 30 Where a deposit is made in a bank by or on behalf of a minor or a person under 31 disability in the [DEPOSITOR'S OWN] name of the minor or person under
01 disability, the bank may pay the money on check or order of that person as in other 02 cases. 03 * Sec. 15. AS 06.05.120 is amended to read: 04 Sec. 06.05.120. NOTICE OF CHARGES. A bank or other financial institution 05 that levies a charge for the establishment or maintenance of personal nonbusiness 06 demand deposit accounts shall clearly post a schedule of the charges in each of its 07 places of business where these accounts are opened. 08 * Sec. 16. AS 06.05.160 is amended to read: 09 Sec. 06.05.160. TRANSMITTING MONEY AND FOREIGN EXCHANGE. 10 A bank may accept for transmission and transmit money, and may buy and sell foreign 11 exchange to the extent necessary to meet the reasonably anticipated needs of 12 customers. 13 * Sec. 17. AS 06.05.166(a) is amended to read: 14 (a) A bank organized under or doing business under the laws of the state or 15 a national bank may remain closed on the legal holidays described in AS 44.12.010 - 16 44.12.025 [AS 44.12.010, 44.12.020 AND 44.12.025, EXCEPT THAT A BANK MAY 17 NOT BE CLOSED FOR MORE THAN THREE CONSECUTIVE DAYS]. The bank 18 shall post a notice of holiday closing in the place of business affected at least seven 19  days in advance. [A BANK MAY OPERATE A BRANCH BANK ON A 20 DIFFERENT SCHEDULE APPROVED BY THE DEPARTMENT IF OPERATION 21 ON A DIFFERENT SCHEDULE WILL PROVIDE BETTER SERVICE.] 22 * Sec. 18. AS 06.05.166(c) is amended to read: 23 (c) In an emergency, [AS DEFINED BY THE DEPARTMENT,] a bank [, IN 24 THE REASONABLE AND PROPER EXERCISE OF ITS DISCRETION,] may elect 25 [DETERMINE] not to open any of its banking offices on a business or banking day 26 [,] or, [IF] having opened, to close any banking office. The [DURING THE 27 OCCURRENCE OF AN EMERGENCY. IF COMMUNICATION FACILITIES ARE 28 OPERATIVE, THE] bank shall notify the department [, OR IN THE CASE OF A 29 NATIONAL BANK THE COMPTROLLER OF THE CURRENCY,] of the 30 nonopening or the closing before taking the action, if possible, and as soon as 31 possible, in any event. Any act relating to the banking office that [HAS NOT BEEN
01 OPENED OR THAT] has been closed for any period of time under this subsection 02 may be performed on the next [SUCCEEDING] business day that the office is open 03 [REOPENED] for business. No liability or loss of rights of any kind on the part of 04 any person, firm, or corporation or of the bank results from the nonopening or closing, 05 and the rights of all parties are suspended during the nonopening or closing. 06 * Sec. 19. AS 06.05.166 is amended by adding new subsections to read: 07 (d) In addition to legal holidays, a bank's board of directors may declare a 08 closing of the bank on any other normal business day, if the department authorizes the 09 closure, the bank posts notice of the closing in the place of business affected at least 10 15 days in advance, and the bank maintains all normal processing and clearing 11 operations on the closed day. 12 (e) Under (a) or (d) of this section, a bank may not be closed for more than 13 three consecutive days. 14 (f) A bank may operate a branch bank on a different schedule approved by the 15 department if the department determines that operation on a different schedule will 16 provide better service or otherwise benefit the public. 17 * Sec. 20. AS 06.05.175(a) is amended to read: 18 (a) The bank records pertaining to depositors and customers are confidential 19 and may not be made public except when 20 (1) [WHEN] the bank, customer, or depositor is compelled to disclose 21 the contents of the records by a court order; [,] 22 (2) [WHEN] their disclosure is required by federal or state law or 23 regulation; [,] 24 (3) [WHEN] disclosure is authorized in writing by the depositor or 25 customer; [,] 26 (4) [WHEN] disclosure is made to the holder of a negotiable instrument 27 drawn on the bank as to whether the drawer has sufficient funds in the bank to cover 28 the instrument; [,] or 29 (5) [WHEN] an inquiry has been made by a bank, savings association, 30 or savings and loan association regulated under this title, or by a credit-reporting 31 agency regulated under 15 U.S.C. 1681-1681t (Fair Credit Reporting Act) solely for
01 the express purpose of determining the credit worthiness of the depositor or customer 02 as an applicant for credit, and the information disclosed by the bank or the entity 03 making the inquiry under this paragraph pertains only to the payment habits of the 04 depositor or customer in connection with loans and other credit accommodations and 05 does not pertain to records concerning deposit balances in savings or checking 06 accounts. 07 * Sec. 21. AS 06.05.175(b) is amended to read: 08 (b) When disclosure of bank records is required or allowed under (a)(1) or (2) 09 of this section, the bank shall notify the depositor or customer of the disclosure. If 10 notification before disclosure is not possible, the bank shall immediately notify the 11 customer or depositor of the disclosure or inquiry. However, notification may not be 12 made if disclosure is made under a search warrant or under a court order 13 [SUBPOENA] issued [BY OR] at the behest of a grand jury. 14 * Sec. 22. AS 06.05.175 is amended by adding a new subsection to read: 15 (d) When disclosure of bank records is compelled by a court order under (a)(1) 16 of this section, the court shall provide in the order for the reimbursement of the bank 17 for the reasonable costs incurred in complying with the order. 18 * Sec. 23. AS 06.05.200(a) is amended to read: 19 (a) A [COMMERCIAL] bank [THAT IS NOT A MEMBER OF THE 20 FEDERAL RESERVE SYSTEM] shall maintain a reserve fund sufficient to 21 maintain liquidity and meet all reasonable demands of depositors, as provided in 22 regulations adopted by the department [TOTAL RESERVES EQUAL TO THE 23 FOLLOWING PERCENTAGES OF THE AGGREGATE AMOUNT OF ITS 24 DEPOSITS, EXCLUSIVE OF DEPOSITS OF THE UNITED STATES, THE STATE 25 OF ALASKA, BOROUGH AND MUNICIPAL GOVERNMENTS AND OTHER 26 DEPOSITS OF PUBLIC MONEY THAT ARE SECURED AS REQUIRED BY LAW: 27 (1) 20 PERCENT OF ITS DEMAND DEPOSITS; AND 28 (2) EIGHT PERCENT OF ITS TIME AND SAVINGS DEPOSITS]. 29 * Sec. 24. AS 06.05.200(d) is amended to read: 30 (d) If the reserve fund [RESERVES] of a [COMMERCIAL] bank falls 31 [FALL] below the amount required by the department to be maintained under [BY]
01 this section, the department may prohibit the bank from making [MAY NOT 02 MAKE] any new loans or other investments or paying [PAY] any dividends until the 03 bank's reserve fund has [ITS RESERVES HAVE] been restored to the amount 04 required under this section. 05 * Sec. 25. AS 06.05.205(b) is repealed and reenacted to read: 06 (b) The total outstanding loans of a state bank to a person may not be more 07 than 25 percent of the total capital accounts of the bank, and the total outstanding 08 loans to a person that are not fully secured may not be more than 15 percent of the 09 total capital accounts of the bank. Unearned income may not be included in 10 determining the amount a bank may loan under this subsection. The following are not 11 considered when determining compliance with this subsection: 12 (1) the discount of bills of exchange drawn in good faith against actual 13 existing values; 14 (2) loans secured by gold, gold dust, or bullion; 15 (3) loans secured by the assignment of specifically identified deposit 16 accounts of the bank with a balance equal to or greater than the total balance of the 17 loan; 18 (4) loans secured by fully insured cannery products or other products 19 in transit; in this paragraph, "products in transit" means the following products, unless 20 the products contain substances added for a purpose other than processing or finishing: 21 (A) hard mineral products, including coal, tin, iron, copper, and 22 silver, in the form of ores or smelted ingots; 23 (B) raw or refined liquid material products, including gas, oil, 24 or petrochemicals; 25 (C) agricultural products, including potatoes, grains, carrots, 26 hay, berries, and meat products; 27 (D) timber products, including logs, chips, pulp, lumber, and 28 peat moss; 29 (E) manufactured products using native materials, including 30 animal hides, vegetation, bone products, horn products, and raw or processed 31 animal furs; and
01 (F) raw or processed fish or fish products; 02 (5) loans with warehouse receipts as collateral security; and 03 (6) discounted commercial or business paper actually owned by the 04 person negotiating the paper. 05 * Sec. 26. AS 06.05.205(c) is amended to read: 06 (c) The restrictions contained in [(a) AND] (b) of this section do not apply to 07 a loan guaranteed by, or to a commitment or agreement to take over or to purchase by, 08 a department, bureau, board, commission, or establishment of the United States or the 09 state, including a corporation wholly owned, directly or indirectly, by the United 10 States or the state, provided that the guarantee, agreement or commitment is 11 unconditional and to [SHALL] be performed by payment in cash or its equivalent 12 within 60 days after demand. 13 * Sec. 27. AS 06.05.205(d) is repealed and reenacted to read: 14 (d) Except with the written prior approval of the department for an acquisition 15 or merger with another financial institution, or except with the written prior approval 16 of the department in order to prevent loss upon an indebtedness previously contracted 17 in good faith, a bank may not 18 (1) accept as security for a loan the capital stock of 19 (A) the bank; or 20 (B) the bank's parent holding companies, unless the stock of the 21 holding companies is publicly traded on a nationally recognized exchange; or 22 (2) loan money that is to be used to purchase the capital stock of the 23 bank or a parent holding company of the bank. 24 * Sec. 28. AS 06.05.205 is amended by adding a new subsection to read: 25 (g) The department shall adopt regulations to determine when a loan made to 26 one person may be attributed to other persons under (b) of this section, taking into 27 consideration the purpose of the loan, the use of the loan proceeds, the anticipated 28 sources of repayment of the loan, the borrower's ownership percentage, and other 29 relevant factors. 30 * Sec. 29. AS 06.05.207 is repealed and reenacted to read: 31 Sec. 06.05.207. REAL ESTATE LOANS. (a) A bank may, subject to the
01 requirements of this chapter, make or acquire a loan secured primarily by a first lien 02 on an interest in improved or unimproved real property, including leases, if 03 (1) the making of the loan is consistent with written lending policies 04 of the bank and regulations adopted by the department; 05 (2) before the loan is made or acquired, the bank secures and maintains 06 in its files, evidence of merchantable title and a determination of the value of the 07 property by a person familiar with the real property values in the vicinity where the 08 real property is located; and 09 (3) insurance against loss from fire on all buildings on the real property 10 that are included in the value of the property is acquired by the borrower or the bank 11 and is not allowed to lapse. 12 (b) A bank may, subject to the requirements of this chapter, make or acquire 13 a loan secured by a junior lien on real property if 14 (1) payments on the loan secured by all senior liens are current and the 15 bank retains in its records a written report of the status and balance of the senior liens 16 as of the date the junior lien loan is made or acquired; and 17 (2) all requirements of (a) of this section are met. 18 * Sec. 30. AS 06.05.210(a) is amended to read: 19 (a) Subject to the same terms and conditions applicable to other loans, a 20 director, [AN] officer, or employee of a state bank may borrow up to $100,000, or 21 up to $250,000 for the director's, officer's, or employee's primary residence 22 [$10,000] from the bank at the discretion of the chief executive or managing officer 23 of the bank. A loan to a director, officer, or employee that makes the total 24 amount owed to the bank by the director, officer, or employee [LOANS] in excess 25 of the limits in this subsection [$10,000], or loans of any amount to the chief 26 executive or managing officer of the bank, shall have the prior approval of the board 27 of directors, shall be reported to the department within 30 days and shall be secured 28 by adequate collateral. [FOR THE PURPOSE OF THIS SECTION, AN OVERDRAFT 29 IS CONSIDERED A LOAN.] 30 * Sec. 31. AS 06.05.211(a) is amended to read: 31 (a) A bank may, subject to the requirements of this chapter, make or acquire
01 a loan secured by a first lien on a forest tract if 02 (1) the making of the loan is consistent with written lending policies 03 of the bank and regulations adopted by the department [AMOUNT OF THE 04 LOAN DOES NOT EXCEED 60 PERCENT OF THE APPRAISED VALUE OF THE 05 GROWING TIMBER, LAND AND IMPROVEMENTS ON IT OFFERED AS 06 SECURITY]; 07 (2) before the loan is made or acquired, the bank secures and 08 maintains in its files evidence of a determination of the value of the property 09 [TERMS AND CONDITIONS OF THE LOAN ARE ADEQUATE TO ENSURE 10 THAT THE LOAN BALANCE WILL NOT AT ANY TIME EXCEED 60 PERCENT 11 OF THE ORIGINAL APPRAISED VALUE OF THE PROPERTY REMAINING AS 12 SECURITY]; and 13 (3) [THE TERM OF THE LOAN DOES NOT EXCEED 15 YEARS 14 AND THE ANNUAL PRINCIPAL PAYMENTS EQUAL AT LEAST SIX AND 15 TWO-THIRDS PER CENT OF THE AMOUNT LOANED; AND 16 (4)] the loan is secured by an amortized mortgage, deed of trust, or 17 assignment of a federal or state timber sale contract. 18 * Sec. 32. AS 06.05.212(a) is amended to read: 19 (a) A director, officer, or employee of a state bank may not [WHO] 20 knowingly, wilfully, and persistently overdraw [OVERDRAWS] the director's, 21 officer's, or employee's account or permit [WHO PERMITS] a customer to do so [, 22 IS ENGAGED IN AN UNSOUND BANKING PRACTICE AND SUBJECT TO THE 23 PROVISIONS OF AS 06.01.030]. 24 * Sec. 33. AS 06.05.215 is repealed and reenacted to read: 25 Sec. 06.05.215. LIABILITY OF DIRECTORS AND OFFICERS FOR 26 CERTAIN LOANS. A director, executive officer, managing officer, or issuing officer 27 of a state bank who knowingly or with gross negligence approves or permits the funds 28 of the bank to be lent or overdrafts to be made in an unsafe or unsound manner, or in 29 violation of an order of the department, the bank's lending policies, this title, or a 30 regulation adopted under this title, is personally liable to the bank for all the loans and 31 overdrafts. The bank may enforce the liability against the director or officer by an
01 action in a court of competent jurisdiction. 02 * Sec. 34. AS 06.05.225 is amended to read: 03 Sec. 06.05.225. APPLICATION OF OTHER LAWS TO LOANS INSURED 04 UNDER NATIONAL HOUSING ACT [AS 06.05.220]. The laws [NO LAW] of the 05 state prescribing or limiting interest rates upon loans do not apply [APPLIES] to loans 06 insured [MADE] under 12 U.S.C. 1706c (National Housing Act) [AS 06.05.220]. 07 * Sec. 35. AS 06.05.230 is amended to read: 08 Sec. 06.05.230. INVESTMENT IN PROPERTY [REAL ESTATE] AND 09 BANKING PREMISES. A bank may acquire, purchase, hold, and convey [AND 10 HYPOTHECATE] real and personal property for the following purposes only: 11 (1) that which is [REAL PROPERTY] necessary for the convenient 12 transaction of, or the promotion of, its business, including buildings containing 13 banking offices, equipment, furniture and fixtures, art work, leasehold improvements, 14 [AND] parking lots, and, with the prior approval of the department, real property 15 reasonably anticipated to be necessary for future expansion of the bank, if the 16 book asset value of the purchase or investment does not exceed 60 percent of the 17 capital [ACCOUNT] and [THE] surplus [ACCOUNT] of the bank; [THE PURCHASE 18 OR INVESTMENT MAY CONSIST OF STOCK IN A BANK BUILDING 19 CORPORATION, IN WHICH CASE IT MUST INCLUDE ALL OBLIGATIONS OF 20 THE BUILDING CORPORATION TO THE BANK;] 21 (2) the satisfaction of or on account of debts previously contracted in 22 the course of its business; 23 (3) the purchase at sale under judgment, decree, lien, or mortgage 24 foreclosure, against security held by it. 25 * Sec. 36. AS 06.05.231(a) is amended to read: 26 (a) A bank may invest not more than 10 percent of its paid-in and unimpaired 27 capital and surplus in a bank service corporation if 28 (1) the bank submits an application requesting permission to invest in 29 a bank service corporation to the department, accompanied by complete information 30 concerning feasibility, rates and competitive organizations, and the department consents 31 in writing to the investment before it is made; and
01 (2) the total investment under this section and AS 06.05.230(1) [AND 02 06.05.232] does not exceed the combined capital, surplus and undivided profits. 03 * Sec. 37. AS 06.05.235(a) is amended to read: 04 (a) Except as provided in [(b) OR (e) OF] this section or in AS 06.05.570, it 05 is unlawful for a person [COMPANY] to own, control or hold with power to vote 25 06 percent or more of a class of voting securities or other capital stock of one or more 07 state banks or domestic bank holding companies subject to regulation under this 08 chapter. However, when it becomes a bona fide necessity to avoid loss for a creditor 09 to accept shares of stock in one or more state banks or domestic bank holding 10 companies constituting more than 25 percent of the ownership or control of a state 11 bank or domestic bank holding company in payment of indebtedness owing to the 12 creditor, shares of stock may be accepted, but the shares of the one or more state 13 banks or domestic bank holding companies exceeding that 25 percent shall be promptly 14 disposed of under the supervision of the department. 15 * Sec. 38. AS 06.05.235(b) is amended to read: 16 (b) A domestic bank holding company that maintains its principal office and 17 place of business in the state and conducts its principal operations in the state, may 18 acquire and own all or a [ANY] portion of the voting securities or other capital stock 19 of, or all or substantially all of the assets of, one or more banks or bank holding 20 companies. The department may require a domestic bank holding company to post a 21 bond with the department in an amount not more than [EQUAL TO] the paid-in 22 capital and paid-in surplus represented by the proportion of state bank stock directly 23 or indirectly owned, held, or controlled by it, under conditions the department may 24 prescribe, to assure full protection of the public. Before a domestic bank holding 25 company may acquire a bank or bank holding company doing business in the 26 state, the domestic bank holding company shall apply for and obtain a permit 27 from the department. In considering whether to issue a permit, the department 28 shall consider the benefits to the public, the preservation of a competitive banking 29 industry, and the maintenance of a safe and sound bank industry. The domestic 30 bank holding company is subject to an examination by the department or a competent 31 person designated by the department when the department considers it necessary, but
01 not less than once each year. The domestic bank holding company shall pay an 02 examination fee under AS 06.01.010. 03 * Sec. 39. AS 06.05.235(g) is amended to read: 04 (g) For the purpose of this section and AS 06.05.570, a trust company 05 organized under AS 06.25 that is engaged in the business of banking shall be 06 considered a state bank. 07 * Sec. 40. AS 06.05.235 is amended by adding a new subsection to read: 08 (i) The provisions of this section do not apply to a person that 09 (1) acquires or holds voting securities or other capital stock of a bank 10 or bank holding company only for a reasonable period of time in connection with the 11 underwriting of securities; 12 (2) is a state agency; 13 (3) is a trustee or agent of an independent federal financial regulatory 14 agency; or 15 (4) under a plan of financial restructuring that is intended to prevent 16 the failure of a state bank and that is approved by the department, 17 (A) acquires or receives 25 percent or more of a class of voting 18 securities or other capital stock of the bank or bank holding company subject 19 to the plan, and owns, controls, or holds, with the power to vote, the securities 20 acquired or received in excess of 24.99 percent of that class for a period of 21 time that permits the distribution or resale of the securities or other capital 22 stock on a reasonable basis; or 23 (B) purchases or receives securities under the plan and, after the 24 purchase or receipt, owns, controls, or holds, with a power to vote, less than 25 25 percent of a class of voting securities or other capital stock of the bank or 26 bank holding company subject to the plan but subsequently, solely through the 27 action or inaction of others, including the bank or bank holding company, 28 owns, controls, or holds, with a power to vote, 25 percent or more of a class 29 of voting securities or other capital stock of the bank or bank holding company; 30 the exemption in this subparagraph does not apply if the department 31 determines, after notice and opportunity for hearing under AS 06.01.030, that
01 the ownership, control, or holding of the securities or stock exceeding 24.99 02 percent of a class, other than under a plan to promptly dispose of the securities 03 or stock under the supervision of the department, permits the organization in 04 any manner to control the election of a majority of the board of directors or 05 trustees, or to directly or indirectly exercise a controlling influence over the 06 management or policies of the bank or bank holding company. 07 * Sec. 41. AS 06.05.240 is amended to read: 08 Sec. 06.05.240. ACQUISITION OF PROPERTY TO SATISFY OR PROTECT 09 PREVIOUS LOAN. A state bank may take property of any kind [, INCLUDING 10 SHARES OF ITS OWN CAPITAL STOCK,] to satisfy or protect a loan previously 11 made in good faith and in the ordinary course of business. A bank may not take the 12 capital stock of the bank or of the bank's parent holding companies unless it 13 complies with AS 06.05.205(d). The property shall be entered on the books at cost, 14 or fair market value, whichever is less. Property acquired to satisfy or protect previous 15 loans shall be disposed of over periods of time as the department may prescribe 16 [PRESCRIBES] by regulation. 17 * Sec. 42. AS 06.05.245 is amended to read: 18 Sec. 06.05.245. DISPOSITION OF PROPERTY NOT NEEDED IN THE 19 CONDUCT OF A BANKING BUSINESS. All real [ESTATE] and personal property 20 not necessary for the convenient transaction or promotion of a [CONSERVATIVE] 21 banking business under AS 06.05.230 that comes into the possession of a state bank 22 shall be disposed of as soon as possible [UNDER THE REGULATIONS OF THE 23 DEPARTMENT]. If the real [ESTATE] or personal property is not sold within the 24 time limit prescribed by the department in regulations, it shall be written off and may 25 not be carried as an asset of the bank. 26 * Sec. 43. AS 06.05.255(a) is amended to read: 27 (a) The aggregate amount of outstanding liabilities of a state bank for money 28 borrowed exclusive of (1) capital notes and debentures issued under AS 06.05.307, (2) 29 obligations incurred in connection with the purchase of bank premises under 30 AS 06.05.230(1), and (3) agreements to repurchase securities, earlier sold by the 31 bank, at the end of a stated period [BORROWING FOR EMERGENCY
01 PURPOSES AS PERMITTED BY THE DEPARTMENT], may not at any time exceed 02 15 percent of the bank's total assets, [THE TOTAL AMOUNT OF ITS 03 UNIMPAIRED CAPITAL AND ONE-HALF OF ITS UNIMPAIRED SURPLUS] or 04 a larger amount if approved by the department. 05 * Sec. 44. AS 06.05.260(a) is amended to read: 06 (a) A bank may not give preference to a depositor or creditor by pledging any 07 of the assets of a bank as collateral security except 08 (1) to the state to secure state funds, or to a municipal corporation or 09 other public corporation, municipal utility or municipal utility board, or political 10 subdivision of the state to secure its funds, and to the United States as may be required 11 to make the bank a depository for United States funds; 12 (2) to secure a mortgage or deed of trust in connection with the 13 purchase of banking premises as provided in AS 06.05.230, if the only property 14 pledged is property purchased in the transaction; or 15 (3) to a federal reserve bank or federal home loan bank in the 16 manner required by the applicable laws, regulations, and rules of the federal 17 reserve bank or federal home loan bank, as applicable. 18 * Sec. 45. AS 06.05 is amended by adding a new section to read: 19 Sec. 06.05.262. UNAUTHORIZED ASSUMPTION OF LIABILITY. Except 20 as expressly permitted in this chapter, a state bank may not assume liability as an 21 insurer or as a guarantor or endorser of a security instrument or obligation unless the 22 bank has a property interest in or with respect to the instrument or obligation. This 23 section does not apply to warranty deeds issued by a bank. 24 * Sec. 46. AS 06.05.270(a) is amended to read: 25 (a) In addition to loans and acquisitions expressly authorized by this chapter, 26 a state bank may deal in, underwrite, and invest in for its own account the obligations 27 that the department by regulation authorizes the bank to deal in, underwrite, or 28 invest in for its own account 29 [(1) DIRECT OR GUARANTEED OBLIGATIONS OF THE UNITED 30 STATES, EITHER DIRECTLY OR IN THE FORM OF SECURITIES OF, OR 31 OTHER INTERESTS IN, AN OPEN-END MANAGEMENT TYPE INVESTMENT
01 COMPANY OR INVESTMENT TRUST REGISTERED UNDER 15 U.S.C. 80a-1 - 02 80a-64 (INVESTMENT COMPANY ACT OF 1940), IF 03 (A) THE PORTFOLIO OF THE INVESTMENT COMPANY 04 OR INVESTMENT TRUST IS LIMITED TO OBLIGATIONS OF THE 05 UNITED STATES GOVERNMENT AND REPURCHASE AGREEMENTS 06 FULLY COLLATERALIZED BY THE OBLIGATIONS; AND 07 (B) THE INVESTMENT COMPANY OR INVESTMENT 08 TRUST TAKES DELIVERY OF THE COLLATERAL DIRECTLY OR 09 THROUGH AN AUTHORIZED CUSTODIAN; 10 (2) GENERAL OBLIGATIONS OF THE STATE OF ALASKA AND 11 ITS POLITICAL SUBDIVISIONS; 12 (3) GENERAL OBLIGATIONS OF A STATE OF THE UNITED 13 STATES OR ITS POLITICAL SUBDIVISIONS; 14 (4) REVENUE OBLIGATIONS OF THE STATE OF ALASKA OR 15 ITS POLITICAL SUBDIVISIONS SUBJECT TO THE LIMITATION OF (b) OF 16 THIS SECTION; 17 (5) REVENUE OBLIGATIONS OF A STATE OF THE UNITED 18 STATES OR ITS POLITICAL SUBDIVISIONS SUBJECT TO THE LIMITATION 19 OF (b) OF THIS SECTION; 20 (6) OBLIGATIONS OF INSTRUMENTALITIES OF THE UNITED 21 STATES GOVERNMENT INCLUDING, BUT NOT LIMITED TO FEDERAL 22 INTERMEDIATE CREDIT BANKS, FEDERAL LAND BANKS, THE FEDERAL 23 NATIONAL MORTGAGE ASSOCIATION, AND BANKS FOR COOPERATIVES; 24 (7) COMMERCIAL PAPER OF PRIME OR EQUIVALENT 25 QUALITY AS RATED BY A RECOGNIZED NATIONAL RATING SERVICE 26 SUBJECT TO THE LIMITATION OF (b) OF THIS SECTION; 27 (8) SECURED CORPORATE OBLIGATIONS RATED WITHIN THE 28 THREE HIGHEST GRADES OF A NATIONAL RATING SERVICE SUBJECT TO 29 THE LIMITATION OF (b) OF THIS SECTION; 30 (9) OBLIGATIONS OF THE INTERNATIONAL BANK FOR 31 RECONSTRUCTION AND DEVELOPMENT, THE INTER-AMERICAN
01 DEVELOPMENT BANK, OR THE AFRICAN DEVELOPMENT BANK, SUBJECT 02 TO THE LIMITATION OF (b) OF THIS SECTION; 03 (10) STOCK IN THE FEDERAL NATIONAL MORTGAGE 04 ASSOCIATION, A FEDERAL RESERVE BANK, OR A FEDERAL HOME LOAN 05 BANK; 06 (11) THE STOCKS, BONDS, AND OTHER SECURITIES OF 07 (A) A CORPORATION LICENSED UNDER AS 10.13; OR 08 (B) A CORPORATION ATTEMPTING TO BECOME 09 LICENSED UNDER AS 10.13 IF THE CORPORATION INTENDS TO USE 10 THE PROCEEDS TO FULFILL THE TASKS NECESSARY TO BECOME 11 LICENSED UNDER AS 10.13]. 12 * Sec. 47. AS 06.05 is amended by adding a new section to read: 13 Sec. 06.05.272. BANK SUBSIDIARIES. (a) A state bank may purchase or 14 establish, and operate, one or more subsidiaries engaged in any of the following 15 activities, if the subsidiary has the necessary licenses and permits and the operation is 16 not detrimental to the bank's business: 17 (1) real property ownership, development, and leasing; 18 (2) insurance sales and service; 19 (3) securities brokerage; 20 (4) other activities authorized in regulations adopted under this section; 21 or 22 (5) other activities approved by the department. 23 (b) Under this section, a bank may invest in subsidiaries an amount equal to 24 the lesser of 20 percent of its total assets or 50 percent of its total capital accounts. 25 Loans to subsidiaries are considered investments subject to the limitations of this 26 subsection. 27 (c) A subsidiary of a state bank is subject to examination by the department 28 as part of the examination of the bank under AS 06.01.015. 29 * Sec. 48. AS 06.05.275(b) is amended to read: 30 (b) A bank may discount, invest in, negotiate, and issue trade acceptances and 31 bank acceptances if
01 (1) the terms of the draft require presentation for payment within 180 02 days of issuance, exclusive of days of grace, and it is drawn to finance the purchase 03 of goods with maturity and payment in accordance with the terms of the purchase 04 agreement; 05 (2) the terms of the draft require presentation for payment within 180 06 days of issuance, exclusive of days of grace, and it is secured by shipping documents 07 transferring or securing title to goods, or by receipt of a licensed or bonded warehouse 08 securing title to readily marketable goods; or 09 (3) the draft is drawn by a bank outside the continental limits of the 10 United States for the purpose of furnishing dollar exchange for trade and its terms 11 require presentation for payment within 90 days of issuance. 12 * Sec. 49. AS 06.05 is amended by adding a new section to read: 13 Sec. 06.05.301. APPLICABILITY OF CORPORATIONS CODE. (a) Except 14 for national banks with a principal place of business in the state, and interstate and 15 international banks with a certificate of authority under AS 06.05.555, a corporation 16 may not engage in the banking business unless the corporation is organized under 17 AS 10.06 (Alaska Corporations Code) and this title. 18 (b) The provisions of AS 10.06 (Alaska Corporations Code) apply to state 19 banks, except those provisions inconsistent with this chapter. The provisions 20 inconsistent with this chapter include AS 10.06.010(4) - (8), 10.06.105(a), 10.06.325, 21 10.06.356, 10.06.358 - 10.06.360, 10.06.370, 10.06.385 - 10.06.388, 10.06.420(i), 22 10.06.430, 10.06.453, 10.06.460(b), 10.06.485, 10.06.522 - 10.06.868, 10.06.915, 23 10.06.960, and 10.06.990(30) and (36). 24 * Sec. 50. AS 06.05.305 is amended to read: 25 Sec. 06.05.305. CAPITAL STRUCTURE. (a) A corporation may not 26 commence and operate a banking business in the state in a community with a 27 population of 35,000 or more unless the corporation has paid-in capital in an amount 28 acceptable to the department, but not less than $2,000,000, [OF AT LEAST 29 $250,000] and paid-in surplus equal to 20 percent of paid-in capital. A corporation 30 may not commence and operate as a bank in the state in a community with a 31 population less than 35,000 unless the corporation has paid-in capital in an
01 amount acceptable to the department, but not less than $1,000,000, and paid-in 02 surplus equal to 20 percent of paid-in capital. A bank may not operate any 03 branches unless it has an aggregate paid-in capital and paid-in surplus in amounts 04 acceptable to the department [OF AT LEAST $800,000]. 05 (b) The capital [STOCK] of a state bank may not be reduced to an amount less 06 than is required by the department [IN THIS CHAPTER] for capital under (a) of 07 this section. A reduction of capital [STOCK, CANCELLATION OF STOCK 08 CERTIFICATES,] or [REDUCING OF] the liability of the shareholders 09 [STOCKHOLDERS] is not valid until it is approved by the department. 10 (c) If a state bank fails to maintain its total [ADJUSTED] capital accounts and 11 loan loss reserves in an amount equal to the [SUBSTANDARD] assets classified as 12 substandard [AS REPORTED] by the Federal Deposit Insurance Corporation or by 13 the state in the [A] bank's latest report of examination, the department shall consider 14 the failure as endangering the safety of depositors [THE DEPOSITOR] and may direct 15 the bank's directors to increase the capital accounts in an amount sufficient to cover 16 substandard assets. 17 * Sec. 51. AS 06.05.310 is repealed and reenacted to read: 18 Sec. 06.05.310. CORRECTION OF IMPAIRMENT OF CAPITAL. If the 19 department determines that the order is necessary for the protection of depositors, the 20 department may issue an order under AS 06.01.030 to require a state bank to increase 21 its capital accounts or to reduce its deposits. In making a decision whether to issue 22 an order under this section, the department shall consider the 23 (1) quality of management; 24 (2) quality and liquidity of assets; 25 (3) history of earnings and retention of earnings; 26 (4) quality and character of ownership; 27 (5) potential volatility of deposit structure; 28 (6) quality and cost of bank operations; and 29 (7) capacity to meet present and future needs of the area served, 30 considering the bank's competition. 31 * Sec. 52. AS 06.05.320 is amended to read:
01 Sec. 06.05.320. BANK PURCHASES OF OWN SHARES [PROHIBITED]. 02 Except in accordance with written approval of the department, a [A] bank may not 03 purchase its own capital stock. 04 * Sec. 53. AS 06.05.327 is amended to read: 05 Sec. 06.05.327. CHANGE IN OUTSTANDING VOTING SHARES [STOCK]. 06 Before [IF] a change may occur [OCCURS OR IS ABOUT TO OCCUR] in the 07 outstanding voting shares [STOCK] of a state bank that will result in a change in the 08 control of the bank, or before [IF] any sales or transfers by or to a person, corporation 09 or other legal entity of the aggregate of 10 percent or more of the voting shares 10 [STOCK] of a state bank may be made, the transaction must be approved by [ARE 11 ABOUT TO BE CONSUMMATED, THE PRESIDENT OR OTHER CHIEF 12 EXECUTIVE OFFICER OF THE BANK IMMEDIATELY UPON OBTAINING 13 KNOWLEDGE OF THE CHANGE IN THE CONTROL OF THE BANK OR THE 14 CONTEMPLATED OR CONSUMMATED SALE OR TRANSFER OF STOCK, 15 SHALL REPORT THESE FACTS TO] the department. 16 * Sec. 54. AS 06.05.342(a) is amended to read: 17 (a) Subscription agreements and accompanying prospectuses or offering 18 circulars, whether for a proposed state bank or for an increase in capital of an existing 19 state bank, shall be submitted to the department for approval before their use. The 20 department shall determine whether the subscription agreements or offering circulars 21 provide full and accurate disclosure of the material terms of the offering. The 22 department may order the incorporators not to accept any stock subscriptions or to 23 cease accepting subscriptions if the department [IT] determines that the incorporators 24 are not acting lawfully or in good faith. 25 * Sec. 55. AS 06.05 is amended by adding a new section to read: 26 Sec. 06.05.344. APPLICATION FOR APPROVAL OF STATE BANK. (a) 27 Before the department issues a certificate of incorporation under AS 10.06.910 for a 28 state bank, the incorporators of a proposed state bank shall obtain the approval of the 29 department. In applying for the approval, the incorporators shall file with the 30 department 31 (1) an application in the form and containing the information the
01 department requires, including 02 (A) for each incorporator and proposed director, and for each 03 preincorporation subscriber of more than five percent of the capital stock, any 04 past and present connection with a bank other than as a customer on terms 05 generally available to the public; 06 (B) the name, residence, and occupation of each 07 preincorporation subscriber and the number of shares subscribed for by the 08 subscriber; 09 (C) the address of the proposed place of business of the bank 10 or, if an address is not available, a legal description of the proposed place of 11 business; and 12 (2) the proposed articles of incorporation; and 13 (3) all applicable fees, payable to the department, for the filing. 14 (b) Investigation expenses incurred by the department in processing an 15 application for approval of a proposed bank shall be charged to and paid by the 16 applicant under AS 06.01.010. When submitting the application to the department, the 17 applicant shall pay to the department $2,000 in partial payment of the investigation 18 expenses incurred by the department. If the investigation expenses incurred by the 19 department are less than $2,000, the department shall promptly refund the excess to 20 the applicant. 21 (c) The department shall notify the incorporators of its decision whether to 22 accept an application for a proposed state bank. If the application and accompanying 23 documents required by (a) of this section do not conform to the requirements of this 24 chapter and the regulations adopted under this chapter, the department shall return the 25 documents with an explanation of the defects. If the department does not act within 26 30 days of receipt of the application, the application is considered to be accepted. 27 Acceptance of the application does not constitute approval. 28 (d) The incorporators shall publish notice of the department's acceptance of 29 the application for a proposed state bank and acceptance of the articles of incorporation 30 once each week for two successive weeks in a newspaper of general circulation 31 published in the community proposed as the bank's principal place of business. If
01 there is no newspaper of general circulation in the community, the notice shall be 02 published in a newspaper of general circulation near the community. The first 03 publication of the notice must appear within 15 days after the application and articles 04 of incorporation have been accepted by the department. The notice must state 05 (1) the name of the proposed state bank; 06 (2) that the proposed bank is to be incorporated under this chapter and 07 AS 10.06; 08 (3) the purpose of the proposed bank; and 09 (4) the names and addresses of the incorporators and the initial board 10 of directors as the names and addresses appear in the articles of incorporation. 11 (e) To prove that the publication required by (d) of this section was made, the 12 incorporators shall file with the department an affidavit of the publisher of the 13 newspaper in which the notice was published. 14 (f) Upon acceptance of an application for approval of a proposed state bank, 15 the department shall conduct an investigation to determine whether 16 (1) the convenience and needs of the public will be served by the bank; 17 (2) the population density and economic characteristics of the area 18 primarily to be served by the bank afford reasonable promise of adequate support for 19 the bank; 20 (3) the character and fitness of the incorporators and the members of 21 the initial board of directors command the confidence of the community and warrant 22 the belief that the business of the bank will be honestly and efficiently conducted; 23 (4) the proposed capital structure of the bank meets the requirements 24 set by the department under AS 06.05.305; 25 (5) the bank will have personnel with adequate knowledge and 26 experience to conduct its business and officers of good character and financial 27 responsibility; 28 (6) the addition of the bank is not detrimental to a sound and 29 competitive banking system; and 30 (7) other relevant facts and circumstances exist that bear on the bank 31 and its relation to the community.
01 (g) The department shall approve or deny an application within six months 02 after the application for approval has been accepted. The time may be extended by 03 up to six additional months when the department determines that an extension is 04 warranted by exceptional circumstances. Within 60 days after the second publication 05 of the notice required by (d) of this section, a person opposing approval of the 06 application may file written objections with the department. When it approves or 07 denies the application, the department shall notify the incorporators and a person who 08 requested in writing to be notified, and, if the application is denied, the department 09 shall state the reasons for its decision and return all copies of the articles of 10 incorporation. 11 (h) If the department approves the application, the department shall endorse 12 the approval on the articles of incorporation, file the articles of incorporation, and issue 13 a certificate of incorporation under AS 10.06.910. 14 * Sec. 56. AS 06.05.345(a) is amended to read: 15 (a) In addition to those items required under AS 10.06.208, the [THE 16 INCORPORATORS SHALL EXECUTE] articles of incorporation of a state bank [, 17 WHICH] must specify 18 (1) [THE NAME ASSUMED BY THE BANK; 19 (2)] the judicial district in which the bank is to be located and the 20 community where the bank is to conduct its principal place of business; 21 (2) [(3) THE NATURE OF ITS BUSINESS; 22 (4)] the amount of its capital stock, which shall be divided into shares 23 having a par value of not less than $1 each; 24 (3) that there will [(5) THE NUMBER OF DIRECTORS OF WHOM 25 THERE MUST] be at least five but no more than 25 directors; and 26 (4) [(6)] the period for which the bank is organized, if limited. 27 * Sec. 57. AS 06.05.345(l) is repealed and reenacted to read: 28 (l) A bank may amend its articles of incorporation in a manner consistent with 29 its articles and bylaws, AS 10.06, and this chapter by a vote of its shareholders 30 representing at least a majority of the capital at a regular meeting or at a special 31 meeting called for the purpose.
01 * Sec. 58. AS 06.05.350(a) is repealed and reenacted to read: 02 (a) At any time after receiving a certificate of incorporation, a bank may apply 03 to the department for a certificate of authority to engage in the banking business. 04 Before receiving a certificate of authority, a bank may not perform an act other than 05 to perfect its organization, obtain and equip a place of business, obtain subscriptions 06 and payment for its shares, and otherwise prepare to do business. If a bank violates 07 this subsection by transacting business before it receives a certificate of authority, the 08 directors and officers who wilfully authorized or participated in the action are 09 personally, jointly, and severally liable for the debts and liabilities of the bank incurred 10 before the certificate of authority is issued. 11 * Sec. 59. AS 06.05.350(b) is amended to read: 12 (b) The department shall issue a certificate of authority to engage in the 13 banking business to a proposed state bank if, upon review of the information required 14 by this chapter, including the following, it approves the application: 15 (1) certification by an officer [TO THE DEPARTMENT] by affidavit 16 that the capital and surplus [AND UNDIVIDED PROFITS] required by the department 17 have been fully paid in cash; 18 (2) a list of all shareholders [STOCKHOLDERS], giving the name, 19 address, and number of shares held by each [HAS BEEN FILED WITH THE 20 DEPARTMENT]; 21 (3) bylaws of the corporation [HAVE BEEN ADOPTED AND FILED 22 WITH THE DEPARTMENT]; 23 (4) evidence satisfactory to the department that the bank has 24 [RECEIVED APPROVAL OF ITS APPLICATION FOR INSURANCE FROM THE 25 FEDERAL DEPOSIT INSURANCE CORPORATION; 26 (5) THE BANK HAS] complied with all the requirements of this 27 chapter and any conditions imposed by the department and has advised the department 28 in writing of any changes that have occurred in the facts reflected in the material it 29 filed under AS 06.05.344 [AS 06.05.345]. 30 * Sec. 60. AS 06.05.350 is amended by adding a new subsection to read: 31 (d) Except as authorized under this section, a person may not
01 (1) engage in the business of receiving deposits, discounting evidences 02 of indebtedness, or receiving money for transmission; 03 (2) represent that the person is, or acts for, a bank; or 04 (3) use an artificial or corporate name that purports to be or suggests 05 that it is the name of a bank. 06 * Sec. 61. AS 06.05.355(a) is repealed and reenacted to read: 07 (a) The department may require a state bank, either at the time the bank 08 applies for a certificate of authority or during the bank's existence, to become a 09 member of the Federal Deposit Insurance Corporation. 10 * Sec. 62. AS 06.05.355(c) is amended to read: 11 (c) Relinquishment of membership without giving notice and obtaining the 12 department's consent, involuntary loss of membership, or failure to become a member 13 after the department directs the bank to become a member constitutes cause for 14 the department to take possession of the bank in the manner provided by this chapter. 15 * Sec. 63. AS 06.05.385 is amended to read: 16 Sec. 06.05.385. ORGANIZATIONAL MEETING [FIRST MEETING OF 17 STOCKHOLDERS AND DIRECTORS]. (a) A state bank may not call an 18 organizational meeting under AS 10.06.223 until all [AFTER THE] capital and 19 surplus have been fully paid [, THE INCORPORATORS SHALL CALL A MEETING 20 OF THE STOCKHOLDERS ON 10 DAYS' NOTICE TO ELECT DIRECTORS AND 21 ADOPT BYLAWS, AND DIRECT THE CALL, ON FIVE DAYS' NOTICE, OF THE 22 FIRST MEETING OF DIRECTORS FOR THE ELECTION OF OFFICERS]. 23 (b) Bylaws shall be adopted and may be amended by a vote of the holders of 24 a majority of the outstanding voting shares voted at a meeting of the shareholders 25 [STOCKHOLDERS]. If not provided in the articles of incorporation, the bylaws 26 must indicate the organizational structure of the bank and specifically designate 27 the offices that will be held by the executive or managing officers of the bank. 28 The bank shall file with the department copies of the original bylaws of the bank 29 and any amendments adopted for the bylaws [THE BYLAWS MAY PROVIDE 30 FOR THEIR AMENDMENT BY THE BOARD OF DIRECTORS OF ANY 31 PROVISIONS OTHER THAN THOSE RELATING TO THE DUTIES, TERM OF
01 OFFICE, REMUNERATION, REIMBURSEMENT OR INDEMNIFICATION OF A 02 DIRECTOR]. 03 * Sec. 64. AS 06.05.399 is amended to read: 04 Sec. 06.05.399. APPLICATION FOR CERTIFICATE OF AUTHORITY FOR 05 BRANCH BANK OR CHANGE OF LOCATION. (a) Before operating a branch 06 bank at [AS] a permanent location or a mobile facility branch bank, or changing the 07 location of the principal office or [OF] a branch of the bank at a permanent location, 08 a state bank must apply to the department [COMMISSIONER] for a certificate of 09 authority to do so. The application must be in the form and contain the information 10 the department [COMMISSIONER] requires to enable the department 11 [COMMISSIONER] to determine whether a certificate of authority should be issued, 12 including [BUT NOT LIMITED TO] the address at which the state bank or branch at 13 a permanent location will operate. Investigation expenses incurred by the department 14 in processing applications shall be charged to and paid by the applicant as provided 15 in AS 06.01.010. At the time of submitting the application to the department 16 [COMMISSIONER], the applicant shall pay to the department $1,000 [$500] in partial 17 payment of those investigation expenses incurred by the department. If the 18 investigation expenses incurred by the department do not exceed $1,000 [$500], the 19 remainder shall be promptly refunded to the applicant. In this subsection, "mobile 20 facility branch bank" means a branch bank that moves from one location to 21 another to provide banking services and that is located in or serves remote areas 22 of the state not being adequately served by permanently located banks or bank 23 branches. 24 (b) The department shall notify the state bank of its action on the application 25 for a branch bank or for a change of location. If the application and the accompanying 26 documents do not conform to the requirements of (a) of this section, the department 27 shall return them with an explanation of the defects in them. If the department does 28 not respond within 30 days of its receipt of the application, the application [IT] shall 29 be considered to have been accepted. 30 (c) The state bank shall publish notice of [THE ACCEPTANCE BY THE 31 DEPARTMENT OF] the application for a branch bank or for a [APPROVAL TO]
01 change in location in the manner provided in AS 06.05.344(d) - (e) [AS 06.05.345(f) 02 AND (g)]. The notice shall state the proposed location for the facility. 03 (d) Upon acceptance of an application for a certificate of authority to operate 04 a branch bank or for approval to change location, the department shall conduct an 05 investigation to ascertain whether 06 (1) the addition of the proposed facility in the community is consistent 07 with [NOT DETRIMENTAL TO] a sound and competitive banking system; 08 (2) the population density and other economic characteristics of the area 09 primarily to be served afford reasonable promise of adequate support for the proposed 10 facility [A BRANCH AT A PERMANENT LOCATION OR MOBILE FACILITY 11 BRANCH BANK OR A RELOCATED PRINCIPAL OFFICE OR BRANCH AT A 12 PERMANENT LOCATION]; 13 (3) the capital structure of the state bank is adequate in relation to the 14 anticipated business and costs of operating at the proposed location; 15 (4) the name is not deceptively similar to that of another branch or 16 bank and is not otherwise misleading. 17 (e) No later than 150 days after the application for a certificate of authority 18 to operate a branch bank or to change location has been accepted, the department shall 19 make a determination whether to approve the application. Within 30 days after the 20 second publication of the notice referred to in (c) of this section, a [ANY] person 21 opposing the pending application may file written objections with the department. 22 When it approves or denies the application, the department shall notify the bank and 23 any other person who requested in writing to [THAT THE PERSON] be notified; and 24 if the application is denied, the department shall state the reasons for its decision. 25 (f) The department shall issue a certificate of authority to operate a branch 26 bank or to change location if 27 (1) all conditions imposed by the department in granting the certificate 28 have been fulfilled; and 29 (2) the requirements of this chapter are satisfied [; 30 (3) APPROVAL OF THE APPLICATION FOR INSURANCE HAS 31 BEEN RECEIVED FROM THE FEDERAL DEPOSIT INSURANCE
01 CORPORATION]. 02 (g) If the rights conferred by a certificate of authority are not exercised within 03 one year from the date of its issuance under this section, the certificate lapses. 04 * Sec. 65. AS 06.05 is amended by adding a new section to article 4 to read: 05 Sec. 06.05.426. AUTOMATED TELLER MACHINES. (a) A state bank may 06 establish, maintain, and operate an automated teller machine on the premises of the 07 main office or a branch office of the bank. 08 (b) A state bank may establish, maintain, and operate an automated teller 09 machine at a location other than bank premises with the prior approval of the 10 department. An automated teller machine operated off bank premises shall be made 11 available on a nondiscriminatory basis for use by other banks authorized to do business 12 in the state and their customers, upon the agreement of the other banks to pay a fair 13 and equitable amount for the use of the machine. 14 (c) For each automated teller machine that a state bank proposes to establish 15 or operate under (b) of this section, the state bank shall submit an application to the 16 department for the machine. The application must contain the following: 17 (1) the location and general description of the surrounding area, 18 including a description of any business establishment in which the machine will be 19 located; 20 (2) the name of the manufacturer and owner of the machine; 21 (3) the manner of operation, including whether the machine is on-line 22 and the kinds of transactions the machine will perform; 23 (4) the names of the other banks that will share the machine's services; 24 and 25 (5) other information required by the department. 26 (d) A state bank may invest in a corporation organized to operate machines 27 that perform automated teller services for two or more banks, if each bank owns part 28 of the capital stock of the corporation. 29 * Sec. 66. AS 06.05.435(a) is amended to read: 30 (a) The affairs of every bank incorporated under this chapter shall be managed 31 by not less than five directors, nor more than 25 [, WHO SHALL BE ELECTED BY
01 THE STOCKHOLDERS AND HOLD OFFICE FOR ONE YEAR AND UNTIL 02 THEIR SUCCESSORS ARE ELECTED AND HAVE QUALIFIED]. A majority of 03 the board of directors shall be bona fide residents of the state and a majority 04 constitutes a quorum for the transaction of business. 05 * Sec. 67. AS 06.05.435(c) is amended to read: 06 (c) Unless otherwise approved by the department, each [EACH] director 07 of a bank shall own, in the director's own right or jointly with the director's spouse, 08 free of any encumbrance, capital stock of the bank in an amount equal to at least 09 $1,000 in par value. 10 * Sec. 68. AS 06.05.435 is amended by adding new subsections to read: 11 (f) A bank shall report within 30 days to the department a change in directors, 12 including a statement of the business and professional affiliations of new directors. 13 (g) The department may issue an order under AS 06.01.030 removing a person 14 from the board of directors or prohibiting a person from being on the board, if the 15 department determines that 16 (1) due to the competence, experience, character, or integrity of the 17 person, it is not in the best interests of the depositors or the public for the person to 18 be or remain on the board; 19 (2) the person is dishonest or reckless in managing the affairs of the 20 bank; 21 (3) the person has persistently violated this title, the regulations adopted 22 under this title, or the orders of the department under this title or under the regulations 23 adopted under this title; 24 (4) the person has been indicted for a felony or other crime involving 25 moral turpitude or breach of trust; or 26 (5) the person has filed a petition in bankruptcy either in an individual 27 capacity or in the name of a corporation in which the person owns a majority of the 28 shares. 29 * Sec. 69. AS 06.05.437 is amended to read: 30 Sec. 06.05.437. OFFICERS. (a) The officers of a bank shall be chosen 31 [ELECTED] by the board of directors. An officer may not be appointed to serve
01 [ELECTED] for a period longer than one year. If a [AN OFFICER MAY BE 02 REMOVED BY THE BOARD OF DIRECTORS AT ANY TIME BUT REMOVAL 03 DOES NOT PREJUDICE ANY RIGHTS THAT THE OFFICER MAY HAVE TO 04 DAMAGES FOR BREACH OF CONTRACT OF EMPLOYMENT. THE] president 05 of a bank or other chief officer responsible for the management of the bank is not a 06 director, the officer must be an ex officio [A] member of the board of directors 07 without the power to vote. 08 (b) A bank shall report within 30 days to the department any changes among 09 executive officers [AND DIRECTORS], including in its report a statement of the 10 business and professional affiliations of new executive officers [AND DIRECTORS]. 11 * Sec. 70. AS 06.05.437 is amended by adding a new subsection to read: 12 (c) If the department determines that an officer or employee of the bank has 13 been negligent, dishonest, reckless, or incompetent in the performance of official 14 duties, the department may order the board to remove the officer or employee from 15 office, after giving the board and the officer or employee an opportunity for a hearing 16 under AS 06.01.030. If the board neglects or refuses to remove the officer or 17 employee from office and if losses due to the negligence, dishonesty, recklessness, or 18 incompetence of the officer or employee accrue to the bank after the neglect or refusal, 19 the order of the department is conclusive evidence of the negligence of the board under 20 this subsection in an action brought against the board, or a member of the board, for 21 recovery of the losses. 22 * Sec. 71. AS 06.05.438(a) is amended to read: 23 (a) The board of directors of each bank shall hold a meeting at least once each 24 month for at least 10 months in each calendar year [TO GENERALLY 25 INVESTIGATE THE AFFAIRS OF THE BANK]. 26 * Sec. 72. AS 06.05.438 is amended by adding new subsections to read: 27 (e) Unless prohibited by the articles or bylaws of the state bank, the board of 28 directors or a committee of the board may validly conduct a meeting by 29 communicating simultaneously with each other by means of conference telephones or 30 similar communications equipment. 31 (f) The department may require a meeting of the board of directors of a state
01 bank to be held in the manner and at the time and place the department directs when, 02 in the judgment of the department, a violation of this title has occurred or is about to 03 occur. A report of an examination required or allowed by this title, the conclusions 04 drawn from the examination by the department, recommendations made by the 05 department, and other matters concerning the operation and condition of the bank may 06 be presented to the board of directors by the department. If the department presents 07 a report of examination or other information is presented to the board, each member 08 of the board of directors shall furnish to the department a statement, on forms to be 09 supplied by the department, that the member has read and is familiar with the 10 recommendations of the department. 11 * Sec. 73. AS 06.05.440 is amended to read: 12 Sec. 06.05.440. AUTHORITY TO DECLARE DIVIDENDS. The directors of 13 a bank transacting business in the state may declare a dividend out of the net profits, 14 subject to any restrictions under AS 06.05.307(c) and after complying with 15 AS 06.05.441 - 06.05.445. 16 * Sec. 74. AS 06.05.441 is amended to read: 17 Sec. 06.05.441. CONDITIONS PRECEDENT TO DIVIDEND 18 DECLARATION AND PAYMENT. (a) Before a bank dividend is declared [,] or the 19 net profits for the period covered by the dividend disposed of, and after the 20 restoration of any undivided profits or surplus under AS 06.05.442, not less than 21 one-fifth of these net profits shall be carried to the bank surplus account until the 22 surplus account equals [AMOUNTS TO] 100 percent of the paid-in capital of the 23 bank. 24 (b) The department may require a bank to suspend the payment of any 25 dividends until all orders or requirements of this section and AS 06.05.442 [MADE 26 BY THE DEPARTMENT] have been complied with. 27 * Sec. 75. AS 06.05.442 is amended to read: 28 Sec. 06.05.442. RESTORATION OF SURPLUS BEFORE PAYMENT OF 29 DIVIDENDS. A loss sustained by a bank in excess of its undivided profits and any 30 capital contingency reserves [RESERVE] shall be charged to its surplus account or, 31 with the approval of the department, carried as negative undivided profits. The
01 bank's undivided profits and [. ITS] surplus account shall thereafter be reimbursed 02 from earnings, and no dividends may be declared or paid by the bank [IN EXCESS 03 OF ONE-HALF OF ITS NET EARNINGS] until any negative undivided profits are 04 eliminated and the surplus account is restored to at least the amount from which the 05 surplus was originally reduced [OR AN AMOUNT EQUAL TO 100 PERCENT OF 06 PAID-IN CAPITAL]. 07 * Sec. 76. AS 06.05.445 is repealed and reenacted to read: 08 Sec. 06.05.445. DETERMINING NET PROFITS. (a) A bank may not declare 09 or pay a dividend in an amount greater than its net undivided profits then on hand. 10 (b) In determining net profits for the purpose of declaring a dividend, a bank 11 may not include in its calculations 12 (1) loan loss reserves and losses in excess of reserves, including loans 13 or other credits upon which interest for a period of six months is due and unpaid, 14 unless the loan or credit is well secured and in the process of collection; 15 (2) interest accrued but not collected on loans or other credits upon 16 which the interest due is more than 90 days delinquent; 17 (3) interest collected but not earned; 18 (4) assets or depreciation that the department has required to be charged 19 off; 20 (5) the appreciation of any asset above its actual cost to the bank; and 21 (6) any accrued expenses, interest or taxes due from the bank. 22 * Sec. 77. AS 06.05.450 is amended to read: 23 Sec. 06.05.450. SHAREHOLDERS [STOCKHOLDERS] LIST. Each bank 24 shall keep a record of [BOOK IN WHICH IT SHALL ENTER] the name and 25 residence of each shareholder [STOCKHOLDER] of the bank, the class and number 26 of shares held by each, the time when each person became a shareholder 27 [STOCKHOLDER], and all transfers of stock, stating the time when made, the number 28 of shares, and by whom transferred. A list of current shareholders [THE 29 STOCKHOLDERS] shall be available for inspection in the bank office by any 30 shareholder on demand [SHOWING THE NUMBER OF SHARES HELD BY EACH 31 STOCKHOLDER OF RECORD].
01 * Sec. 78. AS 06.05.462(a) is amended to read: 02 (a) A national [CHARTER] bank located in the state may convert to a state 03 [CHARTER] bank or merge or consolidate with a state [CHARTER] bank, and a state 04 [CHARTER] bank may merge or consolidate with another state [CHARTER] bank, if 05 the merger or consolidation is consistent with federal and state law and approved by 06 the department. 07 * Sec. 79. AS 06.05.462(c) is amended to read: 08 (c) The department, in the exercise of its power to approve or disapprove 09 applications for merger or consolidation, shall act in the interests of promoting and 10 maintaining a sound banking system, the security of deposits and customers, the 11 preservation of the liquid position of banks, and in the interest of preventing injurious 12 credit expansions and contractions. [THE DEPARTMENT MAY ADOPT 13 REGULATIONS TO IMPLEMENT THIS SECTION.] 14 * Sec. 80. AS 06.05.462(d) is amended to read: 15 (d) A state [CHARTER] bank converting to or merging or consolidating with 16 a national [CHARTER] bank shall submit a copy of the application for national charter 17 or application to convert, merge, or consolidate to the department at the time those 18 documents are forwarded to the comptroller of the currency. 19 * Sec. 81. AS 06.05.466 is repealed and reenacted to read: 20 Sec. 06.05.466. DISSOLUTION BEFORE COMMENCEMENT OF 21 BUSINESS. If the department discovers, after it approves the articles of incorporation 22 for a bank but before it issues a certificate of authority to the bank, a reason why a 23 bank should not have been incorporated, or if a certificate of authority is not issued 24 within the later of one year after the issuance of the certificate of incorporation or the 25 time the department allows for satisfaction of conditions precedent to the issuance of 26 a certificate of authority, the bank shall voluntarily dissolve under AS 10.06.605 - 27 10.06.625 or may be involuntarily dissolved by the department under AS 10.06.633. 28 * Sec. 82. AS 06.05 is amended by adding a new section to read: 29 Sec. 06.05.468. CEASE AND DESIST; OPPORTUNITY FOR HEARING; 30 DEPARTMENT TAKEOVER. (a) A state bank may be closed and the department 31 may take possession of the bank if the bank voluntarily places its affairs and assets
01 under the department's control, or if the department finds 02 (1) the bank has violated an order of the department; 03 (2) the bank has violated a provision of this chapter or a regulation of 04 the department adopted under this chapter; 05 (3) the bank's capital is impaired or the bank is otherwise in an unsafe 06 or unsound condition; 07 (4) the bank's business is being conducted in an unlawful, unsafe, or 08 unsound manner; 09 (5) the bank is insolvent; 10 (6) the bank is unable to continue normal operations; 11 (7) a department examination of the bank is obstructed or impeded; 12 (8) the bank holding company that controls the bank refuses to permit 13 an examination as provided in AS 06.05.235; or 14 (9) the bank has lost, or received notice of the termination or 15 suspension of, its membership in the Federal Deposit Insurance Corporation or has 16 relinquished its membership in the Federal Deposit Insurance Corporation without the 17 consent of the department. 18 (b) Except as provided in (d) of this section, before the department may take 19 possession of a bank the department shall issue a notice to the board of directors of 20 the bank under AS 06.01.030(a) of the problems identified by the department and issue 21 an order to the board under AS 06.01.030(b) to correct the problems. The notice must 22 also specify that failure to comply with the order may result in the department taking 23 possession of the bank. 24 (c) If a bank fails to comply with an order issued under (b) of this section, the 25 department may take possession of the bank by posting upon the bank premises a 26 notice stating that the department is assuming possession under this chapter. 27 Department possession begins when the notice is posted. The notice shall also be filed 28 in the superior court of the judicial district in which the bank is located. The 29 department shall notify the local federal reserve bank if the bank is a member of the 30 Federal Reserve System. 31 (d) Notwithstanding the provisions of this section and AS 06.01.030, if, in the
01 opinion of the department, an emergency exists that will result in serious losses to the 02 depositors, the department may take possession of a bank without prior hearing. 03 Within two days after the department takes possession under this subsection, an 04 interested party may file with the department an application for an order vacating the 05 possession. The department shall grant the application if the department finds that the 06 department's action was not authorized under this chapter. 07 * Sec. 83. AS 06.05.470(b) is amended to read: 08 (b) [THE DEPARTMENT SHALL TAKE POSSESSION UNDER (A) OF 09 THIS SECTION BY POSTING UPON THE BANK PREMISES A NOTICE 10 STATING THAT IT IS ASSUMING POSSESSION UNDER THIS CHAPTER. ITS 11 POSSESSION IS CONSIDERED TO COMMENCE AT THE TIME OF POSTING OF 12 THE NOTICE. THE NOTICE SHALL ALSO BE FILED IN THE SUPERIOR 13 COURT OF THE JUDICIAL DISTRICT IN WHICH THE BANK IS LOCATED. 14 THE DEPARTMENT SHALL NOTIFY THE FEDERAL RESERVE BANK IF THE 15 BANK IN THE POSSESSION OF THE DEPARTMENT IS A MEMBER OF THE 16 FEDERAL RESERVE SYSTEM.] When the department has taken possession of a 17 state bank, it is vested with the full and exclusive power of management and control, 18 including the power [TO ASSESS OUTSTANDING CAPITAL STOCK UNDER 19 AS 06.05.310,] to continue or discontinue the business, to stop or limit the payment 20 of the bank's [ITS] obligations, to employ necessary assistants, to execute any 21 instrument in the name of the bank, to commence, defend, and conduct in the bank's 22 [ITS] name any action or proceeding in which the bank [IT] may be a party, to 23 terminate the [ITS] possession by restoring the bank to its board of directors, and to 24 reorganize or liquidate the bank under [IN ACCORDANCE WITH] this chapter. As 25 soon as practicable after taking possession, the department shall make an inventory of 26 the assets and file a copy of the inventory [IT] with the superior court. 27 * Sec. 84. AS 06.05.470(g) is amended to read: 28 (g) A judgment, lien, or attachment may not be enforced against 29 [EXECUTED UPON] any asset of the bank while it is in possession of the department. 30 Upon the election of the department in connection with a liquidation or reorganization, 31 (1) any lien or attachment, other than an attorney's or mechanic's lien,
01 obtained upon any asset of the bank during the department's possession or within four 02 months before commencement of that possession, may [SHALL] be vacated, except 03 liens created by the department while in possession; and 04 (2) any transfer of an asset of the bank made after or in contemplation 05 of its insolvency or in anticipation of the department's takeover, with intent to 06 effect a preference of one creditor over another creditor or to prevent the 07 distribution of the bank's assets according to law, is void. 08 * Sec. 85. AS 06.05 is amended by adding new sections to read: 09 Sec. 06.05.471. REORGANIZATION. (a) If the department decides to 10 reorganize a state bank, the department, after according a hearing to all interested 11 parties, shall enter an order proposing a reorganization plan. The department shall 12 send a copy of the plan to each depositor and creditor who will not receive payment 13 of a claim in full under the plan, and a notice that, unless within 30 days the plan is 14 disapproved in writing by persons holding one-third or more of the aggregate amount 15 of the claims, the department will reorganize the bank. 16 (b) A plan of reorganization may not be prescribed under this chapter unless, 17 in the opinion of the department, 18 (1) the plan is fair to all classes of depositors, creditors, and 19 shareholders; 20 (2) subject to a fair adjustment for new capital that a class will pay 21 under the plan, the face amount of the interest accorded to a class of depositors, 22 creditors, or shareholders under the plan does not exceed the value of the assets at 23 liquidation less the full amount of the claims of all prior classes; 24 (3) the plan provides for the issuance of common stock in an amount 25 that will provide an adequate ratio to deposits; 26 (4) any exchange of new common stock for obligations or stock of the 27 bank will be made 28 (A) in the inverse order of the priorities in liquidation of the 29 classes that will retain an interest in the bank; and 30 (B) upon terms that adjust in a fair manner any change in the 31 relative interest of the respective classes that will be produced by the exchange;
01 (5) the plan assures the removal of a director, officer, or employee 02 responsible for a problem identified by the department under AS 06.05.468(a) - (b), 03 including an unsafe, unsound, or unlawful action or the existence of an unsafe or 04 unsound condition; 05 (6) any merger or consolidation provided by the plan complies with this 06 chapter. 07 (c) When in the course of reorganization, supervening conditions render a plan 08 of reorganization unfair or its execution impractical, the department may modify the 09 plan or liquidate the bank. 10 Sec. 06.05.472. LIQUIDATION. (a) In liquidating a state bank, the 11 department may exercise any power incidental to liquidating a bank, but it may not, 12 without the approval of the superior court, 13 (1) sell an asset of the bank having an appraised value in excess of 14 $100,000; 15 (2) compromise or release a claim that exceeds $100,000, exclusive of 16 interest; 17 (3) make full payment on a claim, other than a claim upon an 18 obligation incurred by the department, before preparing and filing a schedule of the 19 department's determinations under AS 06.05.473(d)(3). 20 (b) Within six months after beginning the liquidation of a bank, the department 21 may terminate an executory contract for services or advertising to which the bank is 22 a party or an obligation of the bank as a lessee. A lessor who receives 60 days' notice 23 of the department's decision to terminate a lease does not have a claim for rent, other 24 than rent accrued to the date of termination, or for damages due to the termination. 25 (c) As soon as practical after beginning the involuntary liquidation of a bank, 26 the department shall take the steps necessary to terminate all fiduciary positions held 27 by the bank, to surrender all property held by the bank as a fiduciary, and to settle the 28 fiduciary accounts of the bank. 29 Sec. 06.05.473. CLAIMS. (a) As soon as practical after beginning the 30 liquidation of a state bank, the department shall 31 (1) mail notice of the liquidation proceedings to the last known post
01 office address of each depositor, creditor, lessee of a safe deposit box, or bailor of 02 property; 03 (2) post notice of the proceedings conspicuously on the premises of the 04 bank; and 05 (3) publish notice that the department determines to be appropriate for 06 the proceedings. 07 (b) The department shall mail with the notice sent under (a)(1) of this section 08 a statement of the amount shown on the bank's books to be the claim of the depositor 09 or creditor. The notice must also include a demand that a person who is entitled to 10 property held by the bank as bailee or in a safe deposit box of the bank withdraw the 11 property within 30 days. The notice must direct those depositors and creditors who 12 claim amounts different from the amounts in the notice to file their claims with the 13 bank under the procedure described in the notice and before a specified date. The 14 specified day may not be less than 60 days from the date of the first publication of the 15 notice. 16 (c) A safe deposit box whose contents have not been removed within 30 days 17 after demand shall be opened. The department shall retain the contents of the box and 18 the other unclaimed property held by the bank as bailee until the conclusion of the 19 liquidation proceedings. At the conclusion of the liquidation proceedings, the property 20 held by the department under this subsection is considered abandoned, and the 21 department shall turn the property over to the Department of Revenue for handling 22 under AS 34.45.110 - 34.45.780. 23 (d) Within six months after the last day specified in the notice for the filing 24 of claims, or within a longer period if allowed by the superior court, the department 25 shall 26 (1) reject a claim that it determines to be invalid; 27 (2) determine the amount, if any, owing to each known creditor or 28 depositor and the priority class of the person's claim under this chapter; 29 (3) prepare a schedule of its determinations for filing in the superior 30 court; 31 (4) publish a notice in a newspaper once each week for three successive
01 weeks, of the times and places where the schedule of determinations will be available 02 for inspection and the date when the department will file its schedule in court; the date 03 may not be sooner than 30 days after the first publication. 04 (e) Within 30 days after the filing with the superior court of the department's 05 schedule under (d)(3) of this section, a creditor, depositor, or stockholder may file with 06 the court an objection to a determination. The court shall hear and determine the filed 07 objections after the notice to the department and interested claimants that the court 08 establishes. If the court sustains an objection, the court shall direct that the schedule 09 be modified appropriately. 10 (f) After filing its schedule, the department may make partial distribution to 11 the holders of the claims that are undisputed or are allowed by the court, if an 12 adequate reserve is established for the payment of disputed claims. As soon as 13 practicable after the determination of all objections, the department shall make the final 14 distribution. 15 (g) The following claims have priority in liquidation proceedings, in the order 16 listed: 17 (1) obligations incurred by the department in liquidating the bank; 18 (2) wages and salaries of officers and employees earned during the 19 three-month period preceding the department's possession in an amount not exceeding 20 $3,000 for each person; 21 (3) fees and assessments owed by the bank to the department; 22 (4) deposits; 23 (5) claims secured by assets pledged under AS 06.05.260(a). 24 (h) After the payment of all other claims, including interest at the rate 25 established under AS 09.30.070, the department shall pay claims that are otherwise 26 valid but that were not filed within the time prescribed. 27 (i) If the sum available for a class of creditors is insufficient to provide 28 payment in full, the sum shall be distributed pro rata to the claimants in the class. 29 (j) When the department has liquidated a bank, any assets remaining after all 30 claims have been paid shall be distributed to the shareholders in accordance with their 31 respective interests.
01 (k) Unclaimed funds remaining after the completion of the liquidation by the 02 department shall be handled under AS 34.45.110 - 34.45.780. 03 (l) When the assets have been distributed in accordance with this chapter, the 04 department shall file an accounting with the superior court. Upon approval of the 05 account, the department is relieved of liability in connection with the liquidation, and 06 the court shall cancel the certificate of authority of the bank and enter an order of 07 dissolution. When the order is filed, the department shall issue a certificate of 08 dissolution of the corporation. 09 Sec. 06.05.474. FEDERAL DEPOSIT INSURANCE CORPORATION AS 10 RECEIVER OR LIQUIDATOR. The department may appoint the Federal Deposit 11 Insurance Corporation as receiver for a state bank that the department has taken 12 possession of, if the deposits of the bank are insured by that corporation. Upon filing 13 with the court a certificate indicating the acceptance of the appointment by the Federal 14 Deposit Insurance Corporation, the possession of and title to all the assets, business, 15 and property of the bank are transferred to that corporation. The department is then 16 relieved of all responsibility and liability with respect to the reorganization or 17 liquidation of the bank. The Federal Deposit Insurance Corporation may liquidate, 18 reorganize, merge, or consolidate the bank in the manner permitted by the laws of the 19 United States or by this chapter, and possesses all the rights, powers, duties and 20 obligations of the department in the liquidation, reorganization, merger, or 21 consolidation of the bank under this chapter. 22 * Sec. 86. AS 06.05.540 is repealed and reenacted to read: 23 Sec. 06.05.540. DEFINITIONS. In this chapter, unless the context otherwise 24 requires, 25 (1) "automated teller machine," means a staffed or unstaffed electronic 26 device or terminal that permits a bank customer to accomplish various financial 27 transactions, including depositing or withdrawing funds, making loans, and transferring 28 funds between accounts, and includes a similar device or facility known or referred to 29 by another name or designation, including customer-bank communication terminal, 30 electronic fund transfer device, or 24-hour teller, but does not include a machine that 31 is operated by more than one bank;
01 (2) "bank" means a person doing a banking business, including persons 02 subject to the law of this or another jurisdiction; 03 (3) "banking" means performing activities that 04 (A) include, at a minimum, soliciting, receiving, or accepting 05 money or its equivalent on deposit, whether the deposit is made subject to a 06 check or is evidenced by a certificate of deposit, passbook, note, receipt, or 07 other writing; in this subparagraph, "deposit" does not include a deposit made 08 by an agent for a principal; and 09 (B) may also include the negotiation for and discounting of 10 promissory notes or other evidences of indebtedness, selling and buying money 11 or its equivalent, lending money on personal or real property or other security, 12 or performing other similar financial operations; 13 (4) "branch bank" includes an office, agency, or other place of business 14 located in the state and at which deposits are received, checks are paid, or money is 15 lent, but does not include either the principal office of a bank or an automated teller 16 machine; 17 (5) "capital" means the amount of outstanding common stock plus 18 outstanding and perpetual preferred stock; 19 (6) "capital accounts" includes capital, surplus, undivided profits, and 20 capital notes and debentures not maturing within one year from the date of the loan; 21 (7) "commissioner" means the commissioner of commerce and 22 economic development or a designee of the commissioner; 23 (8) "community" means a city, town, unincorporated village, or, in the 24 absence of one of the foregoing, a trade area; 25 (9) "department" means the Department of Commerce and Economic 26 Development; 27 (10) "domestic bank holding company" means a corporation that 28 maintains its principal office and place of business in the state and that has control 29 over a bank or another domestic bank holding company in one of the following ways: 30 (A) the corporation directly or indirectly or acting through one 31 or more other persons owns, controls, or has power to vote 25 percent or more
01 of a class of voting securities of the bank or holding company; 02 (B) the corporation controls in any manner the election of a 03 majority of the directors or trustees of the bank or holding company; or 04 (C) the department determines, after notice and opportunity for 05 hearing, that the corporation directly or indirectly exercises a controlling 06 influence over the management of the policies of the bank or holding company; 07 (11) "fiduciary" means a trustee, agent, executor, administrator, 08 committee, guardian or conservator for a minor or other incompetent person, a 09 receiver, a trustee in bankruptcy, an assignee for creditors, or the holder of a similar 10 position of trust; 11 (12) "financial institution" means an institution subject to the regulation 12 of the department under this title; 13 (13) "good faith" means honesty in fact in the transaction and a 14 reasonable ground for belief that the transaction is lawful, proper, or authorized; 15 (14) "impaired capital" or "impairment of capital" means that the value 16 of the bank's assets is less than the bank's liabilities plus 120 percent of the amount 17 of the bank's paid-in capital; 18 (15) "insolvent" means 19 (A) bank assets having a value less than the bank's liabilities, 20 other than liability on account of capital stock, capital notes, and debentures; 21 (B) failure to increase total adjusted capital accounts or reserves 22 after being ordered to do so under AS 06.05.305(c); or 23 (C) inability to meet obligations or demands as they become 24 due in the ordinary course of business; 25 (16) "international bank" means a corporation, partnership, or 26 association that is organized and operates under the laws of a country other than the 27 United States and that is authorized by its license or charter to carry on a banking 28 business; 29 (17) "interstate bank" means 30 (A) a corporation, partnership, or association organized under 31 the laws of another state and holding a charter, license, or certificate of
01 authority from another state to engage in a banking business; or 02 (B) a national bank, except a national bank whose principal 03 office, as designated in its articles of incorporation, is located in the state; 04 (18) "loans" includes 05 (A) all direct or indirect advances of funds to a person made on 06 the basis of an obligation of the person to repay the funds, or repayable from 07 specific property pledged by or on behalf of the person, guarantees, overdrafts, 08 letters of credit; 09 (B) a liability of a bank to advance funds to or on behalf of a 10 person under a contractual commitment; 11 (19) "national bank" means a bank chartered by the United States; 12 (20) "out-of-state bank holding company" means a company that 13 (A) is a bank holding company as defined in 12 U.S.C. 1841 14 (Bank Holding Company Act); is registered as a bank holding company with 15 the Board of Governors of the Federal Reserve System, with the federal reserve 16 bank of the Federal Reserve District in which the operations of the bank 17 holding company are principally conducted, or with a Federal Reserve Bank 18 that the Board of Governors may designate; maintains its principal office and 19 place of business outside the state; and principally conducts its operations out 20 of the state, as measured by total deposits held or controlled by it on the date 21 on which it becomes an out-of-state bank holding company; or 22 (B) a corporation, partnership, or association organized and 23 operating under the laws of a country other than the United States. 24 (21) "recently formed bank" means a state bank or national bank that 25 conducts a banking business in the state and that commenced the banking business in 26 the state on or after July 1, 1982, and that has not been in existence and continuously 27 operating in the state for a period of three years or more; "recently formed bank" does 28 not include 29 (A) a bank organized solely for the purpose of facilitating 30 acquisition of a bank that either has been in existence and continuously 31 operating in the state as a bank for a three-year period, or was conducting a
01 banking business in the state on or before June 30, 1982; 02 (B) a state bank that the department determines was not created 03 directly or indirectly by an acquiring interstate bank, international bank, or 04 out-of-state bank holding company, and that does not have the capacity to 05 continue to conduct its business independently in a manner consistent with the 06 public interest and the interest of depositors, creditors, and shareholders; or 07 (C) a national bank that the board of governors of the Federal 08 Reserve System, or their designee, determines is not chartered directly or 09 indirectly by an acquiring out-of-state bank holding company, and that does not 10 have the capacity to conduct its business independently in a manner consistent 11 with the public interest of depositors, creditors, and shareholders; 12 (22) "state bank" means a bank organized under this chapter; 13 (23) "state financial institution" means a financial institution organized 14 under this title; 15 (24) "subsidiary" means a corporation in which a bank owns more than 16 50 percent of the voting power of the corporation either directly or indirectly through 17 one or more other subsidiaries of the bank; 18 (25) "surplus" includes amounts paid in for stock in excess of the par 19 value of the stock, which are generally called capital surplus or paid-in surplus, plus 20 any amounts transferred to the account from undivided profits, which are generally 21 called earned surplus; 22 (26) "undivided profits" means the accumulated, undistributed net profit 23 of a bank, including any residue after 24 (A) provision for payment of taxes and expenses of operations; 25 (B) transfers to reserves allocated to a particular asset or class 26 of assets; 27 (C) losses estimated or sustained on a particular asset or class 28 of assets in excess of the amount of reserves allocated for the asset; 29 (D) transfers to surplus and capital; and 30 (E) amounts declared as dividends to shareholders; 31 (27) "unsafe or unsound condition," with respect to a bank, means
01 insolvency; impairment of capital; operating in violation of law, order of the 02 department, or its articles or bylaws; having less than the statutory or regulatory 03 requirements for capital, surplus, or reserves; or another condition that the department 04 determines threatens the safety of depositors or the soundness of the state banking 05 system. 06 * Sec. 87. AS 06.05 is amended by adding new sections to read: 07 ARTICLE 9. INTERNATIONAL AND INTERSTATE BANKS AND 08 OUT-OF-STATE BANK HOLDING COMPANIES. 09 Sec. 06.05.550. AUTHORITY OF INTERNATIONAL OR INTERSTATE 10 BANK TO BRANCH. (a) An international bank, or an interstate bank whose deposits 11 are insured by the Federal Deposit Insurance Corporation, may acquire a branch bank 12 as the result of a merger or consolidation of the international or interstate bank with, 13 or the purchase of all or substantially all of the assets of, a state bank, a national bank 14 with its principal office in this state, or a branch of the state bank or national bank, 15 unless the state bank or national bank is a recently formed bank. 16 (b) An international bank may establish a new branch bank in this state or 17 acquire a recently formed bank, if the department approves the establishment or 18 acquisition before the establishment or acquisition occurs. An interstate bank may not 19 establish a branch bank in this state unless the establishment occurs through an 20 acquisition under (a) of this section of a bank located in the state. An interstate bank 21 may not establish a new branch bank in this state. 22 (c) An interstate or international bank that opens, occupies, or maintains a 23 branch bank in the state has the same powers under the laws of the state as a state or 24 national bank of the same type. 25 Sec. 06.05.555. CERTIFICATE OF AUTHORITY FOR INTERSTATE AND 26 INTERNATIONAL BRANCHING. (a) Before acquiring a branch bank under 27 AS 06.05.550(a) or establishing a branch bank under AS 06.05.550(b), an interstate or 28 international bank shall file an application with the department for and receive a 29 certificate of authority to operate a branch bank. The application must include 30 (1) all information and fees required under AS 06.05.399; 31 (2) the name of the bank and the address of its principal office;
01 (3) if an international bank, the country under whose laws it is 02 organized; 03 (4) the amount of the bank's capital actually paid in cash and the 04 amount subscribed for and unpaid; 05 (5) a complete and detailed statement of the bank's financial condition; 06 (6) the names of all other states and countries in which the bank is 07 admitted or qualified to do business; 08 (7) a copy of the bank's charter, articles of incorporation, and bylaws, 09 as applicable; 10 (8) if an international bank, evidence satisfactory to the department that 11 the bank is authorized to conduct a banking business under the laws of the country of 12 its organization, and the nature of the bank's business; 13 (9) a properly executed designation of the department as the bank's 14 agent for service of process in an action or proceeding arising out of a transaction 15 involving the branch bank; the designation must include the name and address of the 16 officer, agent, or other person to whom the department is to forward the process; and 17 (10) other information necessary or appropriate for the department to 18 determine whether the bank is entitled to a certificate of authority from the department. 19 (b) The department shall notify the interstate or international bank of its action 20 on the application. If the application and the accompanying documents do not comply 21 with the requirements of (a) of this section, the department shall return them with an 22 explanation of the noncompliance. If the department does not respond within 30 days 23 of its receipt of the application, the application is considered to be accepted. 24 (c) The interstate or international bank shall publish notice of the application 25 in the manner provided in AS 06.05.344(d) - (e). The notice must state the proposed 26 location of the branch bank. 27 (d) Upon acceptance of the application, the department shall conduct an 28 investigation to determine that 29 (1) if an interstate bank, 30 (A) the laws of the home state of the bank authorize a state 31 bank of this state to acquire a branch bank in the home state without conditions
01 or restrictions on the operations of the branch bank; and 02 (B) the bank supervisor of the home state of the bank has 03 agreed to provide to the department the examination reports that the department 04 determines sufficient to permit the department to determine on a current basis 05 the financial condition of the bank; 06 (2) the proposal is consistent with a sound and competitive banking 07 system; 08 (3) the capital structure of the bank is adequate in relation to the 09 anticipated business and costs of operating the branch bank; 10 (4) the name of the bank is not deceptively similar to the name of 11 another branch bank or state bank and is not otherwise misleading; and 12 (5) the other requirements of this chapter have been met. 13 (e) Not later than 150 days after the department accepts an application by an 14 interstate or international bank for a certificate of authority to operate a branch bank, 15 the department shall make a determination whether to approve the application. Within 16 30 days after the second publication of the notice referred to in (c) of this section, a 17 person opposing the pending application may file written objections with the 18 department. When it approves or denies the application, the department shall notify 19 the bank and any other person who requested in writing to be notified, and if the 20 application is denied, the department shall state the reasons for its decision. 21 (f) The department shall issue a certificate of authority to an interstate or 22 international bank to operate a branch bank if 23 (1) the conditions imposed by the department in granting the certificate 24 have been fulfilled; and 25 (2) the requirements of this chapter are satisfied. 26 (g) If the rights conferred by a certificate of authority issued under this section 27 are not exercised within one year from the date of the issuance of the certificate under 28 this section, the certificate lapses. 29 Sec. 06.05.560. ASSET REQUIREMENTS FOR INTERNATIONAL BANKS. 30 (a) An international bank that operates one or more branch banks in the state shall 31 maintain in the state assets in an amount acceptable to the department, except that the
01 amount may not be less than the amount of deposits payable at or through the branch 02 banks. 03 (b) The department shall determine the value of the assets maintained by the 04 international bank for purposes of this section. In making its determination, the 05 department may include as assets currency, bonds, notes, debentures, drafts, bills of 06 exchange, and other evidences of indebtedness owed by persons in the United States 07 and collectible in the United States in United States currency or, with the approval of 08 the department, in currency freely convertible into United States currency, but the 09 department may not include as assets prepaid expenses, customers' liability on prepaid 10 expenses, or amounts due from other offices, branches, or wholly owned subsidiaries 11 of the international bank. 12 (c) When the department takes possession of a branch bank of an international 13 bank under AS 06.05.468 and 06.05.470, the assets of the international bank in the 14 state shall be turned over to the department and disbursed as provided in 15 AS 06.05.470 - 06.05.473. 16 Sec. 06.05.565. APPLICABILITY OF TITLE TO INTERSTATE OR 17 INTERNATIONAL BRANCH. (a) An interstate or international bank operating a 18 branch bank in the state is subject to the provisions of this title, and the regulations 19 adopted and orders issued under this title, except for the residency requirements in 20 AS 06.05.435(a). 21 (b) In meeting the reserve requirements of AS 06.05.200(a) and applicable 22 regulations, the bank shall maintain the required reserve fund in the state, except that 23 assets held to meet the requirements of AS 06.05.560(a) may be applied to meet the 24 requirements of AS 06.05.200. 25 (c) A branch bank of an interstate or international bank operating in the state 26 is subject to examination under AS 06.01.015 and assessments under AS 06.01.010. 27 Assessments under AS 06.01.010(d) are based on the branch bank's total deposits in 28 the state. 29 (d) When the department considers it necessary to protect the public interest, 30 the department or a competent person designated by the department may examine an 31 interstate or international bank with a branch in the state. The interstate or
01 international bank shall pay an examination fee established under AS 06.01.010. 02 Sec. 06.05.570. OUT-OF-STATE BANK HOLDING COMPANIES. (a) An 03 out-of-state bank holding company may acquire and own all or a portion of the voting 04 securities or other capital stock of, or all or substantially all of the assets of, one or 05 more state banks, domestic bank holding companies, or national banks conducting a 06 banking business in the state, unless the state bank or national bank is a recently 07 formed bank. Before an out-of-state bank holding company may acquire a bank or 08 bank holding company doing business in this state, the out-of-state bank holding 09 company shall apply for and obtain a permit from the department. In considering 10 whether to issue a permit, the department shall consider the benefits to the public, the 11 preservation of a competitive banking industry, and the maintenance of a safe and 12 sound bank industry. To assure full protection of the public, the department may 13 require an out-of-state bank holding company that directly or indirectly owns, holds, 14 or controls stock in a state bank or domestic bank holding company to post a bond 15 with the department under conditions established by the department. The amount of 16 the bond may not be more than the product obtained by multiplying the amount of 17 paid-in capital and paid-in surplus of the state bank or domestic bank holding company 18 by the percentage of state bank or domestic bank holding company stock directly or 19 indirectly owned, held, or controlled by the out-of-state bank holding company. 20 (b) When the department considers it necessary, the department or a competent 21 person designated by the department may examine an out-of-state bank holding 22 company directly or indirectly owning, holding, or controlling state bank stock or 23 domestic bank holding company stock. The out-of-state bank holding company shall 24 pay an examination fee established under AS 06.01.010. 25 (c) The provisions of this section do not apply to a company that 26 (1) acquires or holds voting securities or other capital stock of a bank 27 or bank holding company for only a reasonable period of time in connection with the 28 underwriting of securities; 29 (2) is an agency of the United States or of a state, or if the majority of 30 the company is owned by the United States or a state; 31 (3) is an independent federal financial regulatory agency or a trustee
01 or agent of an independent federal financial regulatory agency; or 02 (4) under a plan of financial restructuring that is intended to prevent 03 the failure of a state bank and that is approved by the department, 04 (A) acquires or receives 25 percent or more of a class of voting 05 securities or other capital stock of the bank or bank holding company subject 06 to the plan, and owns, controls, or holds, with the power to vote, the securities 07 acquired or received in excess of 24.99 percent of that class for a period of 08 time that permits the distribution or resale of the securities or other capital 09 stock on a reasonable basis; or 10 (B) purchases or receives securities under the plan and, after the 11 purchase or receipt, owns, controls, or holds, with a power to vote, less than 12 25 percent of a class of voting securities or other capital stock of the bank or 13 bank holding company subject to the plan, if subsequently, solely through the 14 action or inaction of others, including the bank or bank holding company, 15 owns, controls, or holds, with a power to vote, 25 percent or more of a class 16 of voting securities or other capital stock of the bank or bank holding company; 17 the exemption in this subparagraph does not apply if the department 18 determines, after notice and opportunity for hearing under AS 06.01.030, that 19 the ownership, control, or holding of the securities or stock exceeding 24.99 20 percent of a class, other than under a plan to promptly dispose of the securities 21 or stock under the supervision of the department, would permit the organization 22 in any manner to control the election of a majority of the board of directors or 23 trustees, or to directly or indirectly exercise a controlling influence over the 24 management or policies of the bank or bank holding company. 25 * Sec. 88. AS 06.20.330(b) is amended to read: 26 (b) This chapter does not apply to individual loans by pawnbrokers or loan 27 shops where separate and individual loans do not exceed $500 [$200]. 28 * Sec. 89. AS 06.25.085 is amended to read: 29 Sec. 06.25.085. APPLICATION OF GENERAL BANKING LAWS. The 30 provisions of AS 06.05 that are consistent with this chapter [AS 06.05.005 - 31 06.05.085, 06.05.090, 06.05.270, 06.05.307, 06.05.320 - 06.05.327, 06.05.440 -
01 06.05.445, 06.05.462, 06.05.465 - 06.05.510, AND 06.05.525 - 06.05.545] apply to all 02 trust companies engaged in any phase of the business of banking as that term is 03 defined by AS 06.05.540 or AS 06.25.100. 04 * Sec. 90. AS 06.45.010(b) is amended to read: 05 (b) The commissioner may by regulation define the powers of 06 [STATE-CHARTERED] credit unions formed under this chapter and adopt 07 regulations to carry out the purposes of credit unions consistent with this chapter and 08 AS 06.01.020. 09 * Sec. 91. AS 06.45.020(c) is amended to read: 10 (c) At the time of presenting the articles of incorporation to the commissioner 11 the incorporators shall also submit proposed bylaws to the commissioner for approval. 12 Except to the extent the articles of incorporation provide the structure and 13 designate the offices, the bylaws shall provide the organizational structure of the 14 credit union and specifically designate those offices that will be held by the 15 executive or managing officers of the credit union. Copies of the original bylaws 16 of the credit union and any amendments of the bylaws shall be filed with the 17 commissioner. 18 * Sec. 92. AS 06.45.090(a) is amended to read: 19 (a) The business affairs of a credit union are managed by (1) a board of not 20 less than five directors; (2) a credit committee of not less than three members; and (3) 21 a supervisory committee of not less than three members or more than five members. 22 The members of the board of directors [AND THE MEMBERS OF THE CREDIT 23 COMMITTEE] shall be elected at the annual members meeting by and from the 24 members. The supervisory committee shall be appointed by the board of directors, and 25 a vacancy in the supervisory committee shall be filled by the board of directors. One 26 of the members of the supervisory committee may be a member of the board of 27 directors, other than the treasurer. The credit committee consists of an uneven 28 number of three or more members appointed by the board of directors for the 29 terms established by the bylaws. Members of the board of directors and of the credit 30 and supervisory committees hold office for terms as the bylaws may provide. 31 * Sec. 93. AS 06.45.110(a) is amended to read:
01 (a) At its first meeting after the annual meeting of the members, the board of 02 directors shall elect from its membership [A PRESIDENT, ONE OR MORE 03 VICE-PRESIDENTS, A SECRETARY, AND A TREASURER, WHO ARE] the 04 executive officers of the credit union. 05 * Sec. 94. AS 06.45.110 is amended by adding a new subsection to read: 06 (f) The board of directors shall appoint a president to act as chief executive 07 officer of the credit union and to be actively in charge of the operations of the credit 08 union. 09 * Sec. 95. AS 06.45.120(b) is amended to read: 10 (b) The board of directors shall 11 (1) act upon applications for membership; 12 (2) require an officer or employee having custody of or handling funds 13 to give bond with good and sufficient surety in an amount and character to be 14 determined by the board of directors in compliance with regulations adopted by the 15 commissioner and authorize the payment of the premium by the credit union; 16 (3) fill vacancies in the board of directors [AND IN THE CREDIT 17 COMMITTEE] until successors elected at the next annual meeting have qualified; 18 (4) have charge of investments other than loans to members; the board 19 of directors may designate a committee of not less than two to act as an investment 20 committee that [WHICH] has charge of making investments under rules and 21 procedures established by the board of directors; 22 (5) determine the maximum number of shares and share certificates and 23 the classes of shares and share certificates that may be held; 24 (6) subject to the limitations of this chapter, determine the interest rates 25 on loans, the security, and the maximum amount that may be loaned or provided in 26 lines of credit; 27 (7) subject to regulations adopted by the commissioner, authorize an 28 interest refund to members of record at the close of business on the last day of any 29 dividend period in proportion to the interest paid by the members during the dividend 30 period; and 31 (8) provide for compensation of officers and employees.
01 * Sec. 96. AS 06.45.140(c) is amended to read: 02 (c) The credit committee may delegate to a loan officer the power to approve 03 loans and lines of credit. [ONLY ONE MEMBER OF THE CREDIT COMMITTEE 04 MAY BE APPOINTED AS LOAN OFFICER.] A loan officer shall furnish to the 05 credit committee a record of each approved or unapproved application within seven 06 days of the filing of the application. 07 * Sec. 97. AS 10.06.005 is amended to read: 08 Sec. 10.06.005. PURPOSES. A corporation may be organized under this 09 chapter for any lawful purpose except for the purpose [PURPOSES] of [BANKING 10 AND] insurance. 11 * Sec. 98. AS 10.06.990(13) is amended to read: 12 (13) "corporation" or "domestic corporation" means a corporation for 13 profit subject to the provisions of this chapter, but does not include a foreign 14 corporation or a [STATE OR] national bank; 15 * Sec. 99. AS 34.45.210 is amended to read: 16 Sec. 34.45.210. PROPERTY OF BUSINESS ASSOCIATIONS HELD IN 17 COURSE OF DISSOLUTION. Intangible [EXCEPT FOR INTANGIBLE 18 PROPERTY DISTRIBUTABLE UNDER AS 06.05.465, INTANGIBLE] property 19 distributable in the course of a dissolution of a business association that remains 20 unclaimed by the owner for more than one year after the date specified for final 21 distribution is presumed abandoned. 22 * Sec. 100. AS 45.50.481 is amended by adding a new subsection to read: 23 (b) The exemption in (a)(3) of this section does not apply to an act or 24 transaction between a bank and its borrowers, depositors, or other customers or 25 potential customers. 26 * Sec. 101. AS 45.50.572(b) is amended to read: 27 (b) AS 45.50.562 - 45.50.596 do not forbid actions or arrangements authorized 28 or regulated under the laws of the United States that [WHICH] exempt these actions 29 or arrangements from application of the antitrust laws of the United States or under 30 the following statutes of this state: 31 (1) AS 06.05.235 and 06.05.570;
01 (2) AS 10.15; and 02 (3) AS 31.05.110. 03 * Sec. 102. AS 06.01.010(c); AS 06.05.015, 06.05.020, 06.05.025, 06.05.030, 06.05.035, 04 06.05.040, 06.05.055, 06.05.060, 06.05.065(d), 06.05.065(e), 06.05.065(f), 06.05.070, 05 06.05.080, 06.05.085, 06.05.090(c), 06.05.130, 06.05.175(c), 06.05.185, 06.05.190, 06.05.195, 06 06.05.200(b), 06.05.200(c), 06.05.205(a), 06.05.205(e), 06.05.205(f), 06.05.206, 06.05.208, 07 06.05.210(b), 06.05.220, 06.05.232, 06.05.235(c), 06.05.235(d), 06.05.235(e), 06.05.235(f), 08 06.05.235(h), 06.05.238, 06.05.255(c), 06.05.260(b), 06.05.270(b), 06.05.275(a), 06.05.275(c), 09 06.05.280(a), 06.05.280(b), 06.05.300, 06.05.307(d), 06.05.307(e), 06.05.325, 06.05.330, 10 06.05.345(b), 06.05.345(c), 06.05.345(d), 06.05.345(e), 06.05.345(f), 06.05.345(g), 11 06.05.345(h), 06.05.345(i), 06.05.345(j), 06.05.345(k), 06.05.360, 06.05.367, 06.05.380, 12 06.05.390, 06.05.395, 06.05.430, 06.05.435(b), 06.05.435(e), 06.05.443, 06.05.465, 13 06.05.470(a), 06.05.470(d), 06.05.470(f), 06.05.470(j), 06.05.470(k), 06.05.470(l), 14 06.05.470(m), 06.05.470(n), 06.05.470(o), 06.05.470(p), 06.05.470(q), 06.05.470(r), 15 06.05.470(s), 06.05.470(t), 06.05.470(u), 06.05.470(v), 06.05.470(w), 06.05.470(x), 16 06.05.470(y), 06.05.470(z), 06.05.480, 06.05.485, 06.05.490, 06.05.495, 06.05.500, 06.05.505, 17 06.05.510, 06.05.520, 06.05.525, 06.05.530; AS 06.20.320(b); AS 06.25.060, 06.25.070, 18 06.25.320; AS 06.30; AS 06.40.160(b); AS 06.45.320, and 06.45.330 are repealed. 19 * Sec. 103. TRANSITIONAL PROVISIONS. (a) On and after the effective date of this 20 Act, a bank incorporated in the state before the effective date of this Act is subject to the 21 provisions of AS 10.06 (Alaska Corporations Code), as amended by secs. 97 and 98 of this 22 Act, as if the bank were incorporated under AS 10.06 on the effective date of this Act. 23 (b) A bank that was formed under AS 06.05 before the effective date of this Act and 24 that is in existence on the effective date of this Act shall amend its articles of incorporation 25 to comply with this Act within 60 days after the date of its next annual shareholders' meeting 26 and shall file the amended articles with the Department of Commerce and Economic 27 Development. A bank that fails to comply with this subsection is guilty of violating 28 AS 06.05, as amended by secs. 9 - 87 of this Act, and is subject to the enforcement and 29 penalty provisions of AS 06.05, as amended in this Act. 30 * Sec. 104. CHANGES IN COURT RULES. AS 06.01.025, enacted by sec. 5 of this Act, 31 changes Alaska Rule of Criminal Procedure 17(c) and Alaska Rule of Civil Procedure 45(b)