CHAPTER 165
FORMERLY
SENATE BILL NO. 95
AS AMENDED BY SENATE AMENDMENT NOS. 2 AND 3
AN ACT TO AMEND CHAPTERS 1, 3, 7, 8, 9, 21, AND 27 Of TITLE 5, DELAWARE CODE, AND CHAPTER 303 OF 68 DEL. LAWS RELATING TO BANKS, BUILDING AND LOANS AND OTHER FINANCIAL INSTITUTIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (two-thirds of all members elected to each house thereof concurring therein):
Section 1. Amend subsection (15) of Section 101 of Title 5, Delaware Code, by deleting the number "50" immediately preceding the word "percent" and inserting in lieu thereof the number "25".
Section 2. Amend Section 101 of Title 5, Delaware Code, by adding a new subsection (17) to read as follows:
"(17) 'Affiliate' means a person that directly, or indirectly through 1 or more intermediaries, controls or is controlled by, or is under common control with, the person specified."
Section 3. Amend Section 101 of Title 5, Delaware Code, by adding a new subsection (18) to read as follows:
"(18) 'Person' means an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated association or any other form of entity not specifically listed herein."
Section 4. Amend Section 101 of Title 5, Delaware Code, by adding a new subsection (19) to read as follows:
(19) 'Control' means the power, directly or indirectly, to direct the management or policies of a banking organization or other financial institution or to vote 25 percent or more of any class of voting securities of such banking organization or other financial institution."
Section 5. Amend Section 108 of Title 5, Delaware Code, by adding the following new sentence after the first sentence:
"To the extent that a licensee subject to the provisions of Chapter 22 or 29 of this title is examined solely for purposes of determining compliance with state law and consumer protection statutes, the above shall not apply unless the Commissioner finds that an actual conflict may arise." and by deleting the words "This prohibition, however," and inserting in lieu thereof "The prohibition contained above".
Section 6. Amend subsection (a) of Section 124 of Title 5, Delaware Code, by adding
the following sentence to the end thereof:
"In order to protect the confidentiality of the contents of the examination report or other related documents, the Commissioner may prescribe regulations to prevent the disclosure of confidential information relating to the examination of any institution under his supervision."
Section 7. Amend subsection (a) of Section 127 of Title 5, Delaware Code, by deleting the words May 1, 1978, and May 1st each year thereafter" immediately following the words "to the Council on Banking by" as they appear in the third sentence and inserting in lieu thereof "July 1 each year". Further amend subsection (a) of Section 127 of Title 5, Delaware Code, by deleting the phrase ",as approved by the Council," immediately following the words "The rates for examinations" as they appear in the fourth sentence.
Section 8. Amend subsection (b) of Section 127 of Title 5, Delaware Code, by deleting the words "May 1, 1978, and June 1 each year thereafter" immediately following the words "to the Council on Banking by" as they appear in the fifth sentence and inserting in lieu thereof "July 1 each year". Further amend subsection (b) of Section 127 of Title 5, Delaware Code, by deleting the sixth sentence beginning with the words The rates as approved" in its entirety, and inserting in lieu thereof The rates shall be invoiced to the institutions on July 15 each year, and are due and payable on August 1 each year."
Section 9. Amend subsection (d) of Section 127 of Title 5, Delaware Code, by deleting existing subsection (d) in its entirety and inserting in lieu thereof a new subsection (d) to read as follows:
"(d) The Chairman of the Council on Banking may appeal to the Secretary of Finance any rates specified in subsections (a) and (b) of this section which the Council on Banking believes have been computed incorrectly, and the Secretary of Finance shall make the final determination and revise the rates if necessary."
Section 10. Amend subsection (1) of Section 167 of Title 5, Delaware Code, by deleting the word "deemed" immediately preceding the words "to constitute control" and inserting in lieu thereof the word "presumed". Further amend subsection (1) of Section 167 of Title 5, Delaware Code, by deleting the words "or a Delaware bank holding company" as they appear in the second sentence.
Section 11. Amend Section 167 of Title 5, Delaware Code, by deleting
subparagraph (3) in its entirety.
Section 12. Amend subsection (a) of Section 302 of Title 5, Delaware Code, by deleting the words "a bank or trust company or invest said payments in a savings and loan association" immediately following the words "shall deposit all payments in a trust account with" and inserting in lieu thereof "an insured institution".
Section 13. Amend subsection (b) of Section 302 of Title 5, Delaware Code, by deleting the words ", except where payment is made pursuant to §303 of this title" immediately following the words "contract or plan".
Section 14. Amend Section 305 of Title 5, Delaware Code, by deleting the words "a bank or trust company or invested in a savings and loan association" immediately following the words "after receipt thereof, with and inserting in lieu thereof an insured Institution".
Section 15. Amend subsection (a) of Section 770 of Title 5, Delaware Code, by adding the following new sentence after the first sentence:
For the purposes of this section, a branch office or place of business shall include any location, except as provided by Sections 771 and 772, at which deposits are received, or checks paid, or money lent."
Section 16. Amend Section 772 of Title 5, Delaware Code, by deleting the second sentence beginning with the words No certificate of authority" in its entirety. Further amend Section 772 of Title 5, Delaware Code, by deleting the word "bank" immediately preceding the words "installing and operating ft" as they appear in the third paragraph and inserting in lieu thereof the word "institution".
Section 17. Amend Chapter 7 of Title 5, Delaware Code, by adding a new section 794 to read as follows:
"§794. Conversion of a building and loan association.
(a) Notwithstanding any other provision of this title, a building and loan association with voting stock regulated pursuant to Chapter 17 of this title may become a bank which shall be deemed as having been formed under and which shall be governed' by the provisions of Chapter 7 of this title. The application for conversion filed with the Commissioner shall be in such form as the Commissioner shall from time to time prescribe, submitted and sworn to by the directors of the building and loan association. A 45-day comment period shall commence upon the date of the first notice required under subsection (b) herein.
(b) The Commissioner shall, at least once during each of the first 2 weeks following the filing of an application under this section, cause to be filed in a newspaper having statewide circulation, at the expense of the applicants, a notice of the filing of such application, which notice shall invite public inspection and comment hereon prior to the expiration of the 45-day period.
(c) If, based upon the application and any other information filed with the Commissioner in support of or objection to such application, the Commissioner shall have cause to believe that a certificate of public convenience and advantage would not be issued to the applicants, the Commissioner shall, not later than 45 days after the close of the comment period, advise applicants of such objection, together with support therefor. At the request of the applicants, the Commissioner shall forthwith proceed to give notice and conduct a hearing in accordance with the Administrative Procedures Act, Chapter 101, Title 29, Delaware Code.
(d) Upon a determination that the applicants have met the requirements of this section, the Commissioner shall issue a certificate certifying such compliance and ordering and approving a conversion of the building and loan association, which certificate shall be duly filed with the Secretary of State. From and after such filing, the resulting bank shall be governed by the provisions of Chapter 7 of this title and any other law of these State regulating banks generally.
(e) If an application is made for conversion of a building and loan pursuant to this section in connection with an application for acquisition of an existing bank pursuant to Subchapter IV of Chapter 8 of this title, the Commissioner may consider and approve or reject both applications concurrently.
(f) The resulting bank shall pay to the Office of the State Bank Commissioner a fee of $5,000 for the use of the State if there is an approval of the conversion. In addition, the resulting bank shall pay an investigation fee of $1,000 which shall not be refundable and which shall be submitted with the application for conversion."
Section 18. Amend subsection (3) of Section 842 of Title 5, Delaware Code, by inserting the following words immediately preceding the semi-colon: ", or a building and loan association which has become a bank pursuant to §794 of this title whose initial Delaware charter or authorization to conduct a building and loan business in Delaware bears an effective date not less than 5 years prior to the effective date of the acquisition of such building and loan association".
Section 19. Amend subsection (b) of Section 907 of Title 5, Delaware Code, by deleting the phrase "banking association, trust company, savings bank or savings society" immediately following the words "Every bank," and inserting in lieu thereof "trust company or savings bank".
Section 20. Amend subsection (a) of Section 909 of Title 5, Delaware Code, by deleting the words "or trust company including mutual savings banks and savings societies" immediately following the words No bank" and inserting in lieu thereof ", trust company or savings bank". Further amend subsection (a) of Section 909 of Title 5, Delaware Code, by deleting the words "or savings society" immediately following the words "in the case of a mutual savings bank".
Section 21. Amend subsection (b) of Section 909 of Title 5, Delaware Code, by renumbering existing subparagraphs (3) through (9) as subparagraphs (4) through (10). Further amend subsection (b) of Section 909 of Title 5, Delaware Code, by deleting the word "and" at the end of newly redesignated subparagraph (9). Further amend subsection (b) of Section 909 of Title 5, Oelaware Code, by deleting the period at the end of newly redesignated subparagraph (10) and inserting in lieu thereof "; and". Further Amend subsection (b) of Section 909 of Title 5, Delaware Code, by adding a new subparagraph (3) to read as follows:
"(3) Any loan, discount or extension of credit to an affiliate or subsidiary to the extent that any such loan, discount or extension of credit is to, or is secured or covered by, guaranties, reinsurance, or by commitments or agreements to take over or to purchase any such loan, discount or extension of credit made or issued by the United States or this State (both as defined in subparagraph (b)(1) above)."
Further Amend subsection (b) of Section 909 of Title 5, Delaware Code, by adding thereto a new subparagraph (11) to read as follows:
"(11) Any provisional debit, loan or extension of credit made by the lending bank or trust company to the demand deposit account of a customer of the lending bank or trust company in the course of settling overlimit checks drawn on such demand deposit account, provided that any such debit, loan or extension of credit is revocable at will by the
lending bank or trust company as of the close of business the
banking day next following the settlement of such checks, and provided further that any such debit, loan or extension of credit is funded by the customer within such time period."
Section 22. Amend subsection (d) of Section 909 of Title 5, Delaware Code, by deleting the words or trust company, including mutual savings banks and savings societies" and inserting in lieu thereof ", trust company or savings bank". Amend subparagraph (1) of subsection (d) of Section 909 of Title 5, Delaware Code, by deleting the words two thirds" immediately preceding the words of the whole board of directors" and inserting in lieu thereof the words "a majority". Further amend subparagraph (1) of subsection (d) of Section 909 of Title 5, Delaware Code, by deleting the words two thirds" immediately preceding the words of the whole committee" and inserting in lieu thereof "a majority".
Section 23. Amend Section 910 of Title 5, Delaware Code, by deleting the word "individual" immediately following the words "(ii) in any event, any amount in excess of 25 percent of its then current total capital, surplus and inserting in lieu thereof the word "undivided".
Section 24. Amend Section 933 of Title 5, Delaware Code, by deleting existing Section 933 in its entirety and inserting in lieu thereof a new Section 933 to read as follows:
§933. Branch office requirements; automated service branch.
(a) Any savings bank, if authorized by its charter, may open a branch office or place of business, or branch offices or places of business, in this State, upon application submitted to and approved by the Commissioner and upon the issuance of a certificate of authority of the Commissioner. For the purposes of this section, a branch office or place of business shall include any location, except as provided by §933(c), at which deposits are received, or checks paid, or money lent. The application shall state the exact location of the intended branch office and the necessity for its opening and the Commissioner shall inquire into the matter, and if the
Commissioner deems that the public convenience will be served thereby and that there is good and sufficient reason that the savings bank should have the branch office, the Commissioner shall issue written permission for the opening of the branch office. No certificate of authority shall be issued by the
Commissioner unless the Commissioner shall be satisfied that the applicant has a paid-in-capital stock of at least $25,000 for each office or place of business then established by the applicant in this State and for each branch sought to be established and a surplus of at least $25,000 for each office or place of business then established by the
applicant in this State and for each branch sought to be established. Any certificate of authority issued by the Commissioner shall be void and of no effect if after the expiration of a reasonable period of time, as determined by the Commissioner, such branch is not actually opened for business. The Commissioner shall by regulation prescribe the criteria to be applied in determining what constitutes a reasonable period of time.
A fee of $575 for every such certificate shall be required by the Commissioner before issuing the same. In addition, the applicant shall pay an investigation fee of $575 which
shall not be refundable and shall be submitted with the
application.
(b) Nothing in this section shall deny any savings bank the right to continue a branch office or offices if such branch office or offices shall have been actually established prior to June 2, 1959.
(c) Any savings bank, with prior approval of the Commissioner, may install or operate one or more automated service branches in this State. The Commissioner's approval need only be conditioned upon the determination that the automated service branch will be an effective and efficient service consistent with sound banking practices. The Commissioner shall promulgate regulations which prescribe the form and content of the application and related procedures for approval in such a manner as to expedite the approval process for automated service branches. An automated service branch shall be deemed to be a branch of the savings bank installing and operating it.
Without the approval of the Commissioner, an automated service branch may be shared among banks, savings banks, national banks, savings and loan associations and credit unions having their main offices within or without the State, and shall not be deemed to be a branch office of any bank, savings bank, national bank, savings and loan association or credit union other than the institution installing and operating it. In addition, the Commissioner shall be authorized to exempt certain types of electronic devices, as the Commissioner shall find inappropriate to include within the coverage of this section in order to effectuate the purposes of this chapter.
A fee of $375 for every such certificate shall be required by the Commissioner before issuing the same. In addition, the applicant shall pay an investigation fee of $375, which shall not be refundable and shall be submitted with the application."
Section 25. Amend Section 2106 of Title 5, Delaware Code, by deleting the last sentence beginning with the words No licensee" in its entirety and inserting in lieu thereof the following new sentence: The Commissioner may issue more than 1 license to the same applicant upon payment of the required fees and compliance with all applicable provisions of law."
Section 26. Amend Section 2108 of Title 5, Delaware Code, by deleting the word "corporate" immediately following the words "file with the Commissioner a".
Section 27. Amend Section 2742 of Title 5, Delaware Code, by deleting the number "1" following the phrase "sum to exceed" and inserting the number "2" in lieu thereof.
Section 28. Amend Section 47 of 68 Del. Laws c. 303 by inserting "1," between the word "Sections" and the number "25" in such Section 47.
Section 29.If any provision of this act or the application of any section or part thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or application of this act which can be given effect without the invalid provision or application.
Section 30. This act shall take effect immediately upon its adoption.
Approved July 16, 1993.