CHAPTER 93

AN ACT to Amend an Act Entitled "An Act in Relation to Banks, Saving Societies and Trust Companies and Regulating the Conduct of Their Business and Prescribing Certain Powers and Duties for the State Bank Commissioner," Being Chapter 103, of Volume 32, Laws of Delaware as amended.

Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:

Section 1. That the Act entitled "An Act in relation to banks, savings societies and trust companies and regulating the conduct of their business and prescribing certain powers and duties for the State Bank Commissioner" being Chapter 103, of Volume 32, Laws of Delaware, as the same has been heretofore amended be and the same is hereby amended as follows :

(1) By adding at the end of Section 4 the following as an addition to and part of said Section 4--

"The right to open or establish a branch and/or branch office conferred upon or vested in any bank or trust company by charter or Legislative Act granted or passed prior to January 1, 1933, shall be deemed and held to be revoked for non-user unless such branch and/or branch office shall be actually established and business conducted thereat prior to the first day of January, 1934."

(1) By striking out the first sentence of Section 6 and by substituting in lieu thereof the following as the first sentence of said Section 6--

"If the State Bank Commissioner shall have reason to believe that the capital of any bank or trust company under his jurisdiction has been impaired, he may require such corporation to make good the deficiency within such time as he shall specify."

(1) By striking out the last sentence in Section 9 and by substituting in lieu thereof the following new sentences :"The Receiver to be appointed as aforesaid shall be the State Bank Commissioner or, in his absence or disability, the Deputy Bank Commissioner. Neither of said officials shall receive any extra compensation for acting as such receiver. The Court may in its discretion vest the Receiver with full power and authority to borrow such sum or sums of money as the Court shall determine in order the more readily or expeditiously to settle the affairs of the said corporation and/or to make payments to its creditors or to its depositors or to its stockholders. Such borrowing may be from any public or governmental or quasi public or quasi governmental corporation, board, commission or other agency or from any source whatsoever, and the Court may authorize the Receiver to secure any such loan by the pledge of any of the property or assets of the corporation, and to give the lender a preference as to the pledged property and assets over the creditors of the corporation.

"If by reason of any circumstance or condition whatsoever, the State Bank Commissioner shall be satisfied that it is necessary for the protection of the depositors and the conservation of the assets of any State bank or trust company doing business in this State, so to do, the said Commissioner may forthwith take possession of the place of business of such corporation and take charge of its affairs and the conduct of its business for such time as he shall deem necessary without first instituting or causing to be instituted any proceeding in the Court of Chancery, but every such corporation shall have the right to apply to the Court of Chancery for a rule on the said Commissioner so taking possession of the corporation as aforesaid to show cause why he should continue in such possession and the Court may after a hearing upon such rule, direct the said Commissioner to withdraw from the possession of the said corporation if the Court shall deem that the taking of such possession or his continuance therein is unnecessary or inexpedient. The said Commissioner is hereby vested with full right and authority, in his discretion, to keep such bank or trust company open and continue it in the transaction of business during his possession of the corporation, and if he shall deem it requisite so to do, to prescribe restrictions as to the withdrawal of deposits, whether time or demand, and/or the conditions upon which deposits, whether time or demand, may be withdrawn during his possession of the corporation.

"The State Bank Commissioner may employ such persons outside the regular force in the Banking Department as he shall deem necessary or proper to assist him in the performance of his duties whether acting as receiver under order of Court or in possession of the corporation on his own motion as aforesaid, and may select some or all of the officers and employees of such corporation for this purpose. He shall require such security as he may deem proper from his agents and assistants appointed pursuant to the provisions of this section.

"The costs and expenses incurred by the State Bank Commissioner in acting as the Receiver for any corporation as aforesaid, including the compensation and expenses of all assistants employed by said Commissioner in the performance of his duties as Receiver, shall be paid out of the assets of the said corporation and shall have priority over all of the corporate indebtedness ; and the costs and expenses incurred by the State Bank Commissioner in taking possession of a corporation without being appointed Receiver thereof, including the compensation and expenses of all assistants employed by the said Commissioner for the purpose of such possession, shall be paid out of the assets of the said corporation and shall have priority over corporate debts."

(4) By inserting after Section 9 a new section to be styled Section 9a as follows :

"Section 9a. The State Bank Commissioner is hereby authorized and empowered in addition to all other powers, whenever in his judgment the circumstances warrant it, to authorize any and all banks and trust companies under his jurisdiction,

(a) To extend for a period of ninety days, and for a further period if he deems it expedient, payment of any time accounts where notice of withdrawal has been given or may hereafter be given.

(b) To authorize the postponement for any length of time of the payment of any proportion of the deposits in demand accounts of any individual, firm or corporation as he may deem necessary and expedient, to be determined by him according to the ability of any bank or trust company to pay such withdrawals.

(c) To authorize all such banks and trust companies to thereafter receive new deposits which shall be segregated from the old deposits, and said new deposits shall not be subject to the restriction or limitations herein or that may be hereafter imposed by the State Bank Commissioner pursuant to the provisions herein, and said new deposits shall be invested in such liquid assets as may be approved by the State Bank Commissioner in order that banks and trust companies may at all times have sufficient funds to meet the demands on such new deposits in accordance herewith.

(5) By adding at the end of Section 12 the following as a part of said Section 12--

"No bank or trust company shall make any loans, directly or indirectly to any of its directors, officers or employees except on the following conditions--(a) that the loan be approved by the vote of two-thirds of the whole board of directors, or where the granting of loans is vested in a committee of the board of directors, then by a vote of two-thirds of the whole committee, and the proposed borrower shall not be present when the application for the loan is acted on ; (b) that at the time the loan shall be voted upon as aforesaid, there shall be submitted to and examined by the directors voting upon said loan a written statement signed by the proposed borrower setting forth clearly his financial condition and disclosing his assets and liabilities, and in case said loan shall be granted, said statement shall be preserved and kept with the evidence of said loan whilst the same remains unpaid, provided that no such statement shall be necessary where the loan is secured by liquid collateral worth at least twenty per centum more than the amount of the loan."

(6) By striking out Section 16 and by substituting in lieu thereof the following new Section 16--

"Section 16. No bank or trust company shall, except with the express approval of the State Bank Commissioner, have more than twenty-five per cent of its capital actually paid in and its surplus account invested in real estate used as its place of business including the cost of alterations and additions in the nature of permanent fixtures. The amount of any mortgage or real estate owned by such corporation directly or indirectly and in whole or in part used by it for the transaction of its business, and the amount of money invested by such corporation in the securities of any corporation, trust or other organization which holds real estate in whole or in part used for the transaction of the business of such corporation or intended for such use, shall be included in determining the amount of real estate that may be held by such corporation under this section. Provided, however, that the provisions of this Section shall not be deemed to apply to the investment or expenditure of money made prior to the first day of July, 1933."

(7) By striking out the last sentence of Section 18.

(8) By changing the number of Section 19 to Section 24 and by inserting the following new sections to precede said Section 24--

"Section 19. The directors of a bank or trust company may declare dividends of so much of the net profits of the corporation as they shall judge expedient; but such corporation shall, before the declaration of a dividend from the net profits (1) carry 50% of its net profits of the preceding period for which said dividend is paid to its surplus fund until the same shall amount to 50% of its capital stock (2) and thereafter shall carry 25% of its net profits of the preceding period for which said dividend is paid to its surplus fund until the same shall amount to its capital stock."

"Section 20. Every bank and trust company including savings banks and National Banks doing business in this State shall on or before the first day of July, 1933, file in the office of the State Bank Commissioner a written statement setting forth clearly and specifically its rules and regulations as to time deposits and as to savings deposits including (1) the maximum amount that the corporation will receive from a depositor during a specified period ; (2) the rate of interest allowed on each class of deposits.; (3) how and for what period the interest is calculated ; and (4) what notice is required before withdrawal and whether any exception, and if so, what, is allowed, and such other things as the said Commissioner shall specify.

"If and when any such corporation shall make any change in its rules and regulations as filed with the said Commissioner as aforesaid it shall be the duty of such corporation forthwith to file with the said Commissioner a written statement setting forth such charge."

"Section 21. No bank or trust company shall hold more than ten per cent of the capital stock of any other bank or trust company."

"Section 22. Every charter authorizing the establishment of a bank or trust company in this State and which was granted or passed by the General Assembly of this State prior to the first day of July, 1933, shall be deemed and held to be revoked for non-use of corporate franchise unless the corporation created or authorized by such charter shall be actively engaged in business in this State prior to the first day of January, 1934.

"No bank or trust company not actively engaged in business in this State prior to the first day of January, 1933, shall transact any business in this State without having first secured from the State Bank Commissioner a certificate authorizing it to begin the transaction of business and to open a place of business in this State.

"The said Commissioner shall not give any certificate as aforesaid until satisfied by proper evidence that all the requirements of the charter of the corporation applying for such certificate and all the requirements of the laws of this State applicable to such a case have been complied with and that the whole capital stock has been fully paid in in cash, unless the charter shall expressly provide otherwise.

"A fee of Fifty Dollars for every such certificate shall be required by the Commissioner before issuing the same."

"Section 23. When a bank or trust company shall be appointed executor or administrator, receiver or assignee or guardian or trustee either by will or by any written instrument or other act of the parties or by any court or official such bank or trust company shall keep a separate account of money, securities or other property received, invested or loaned in the performance of its duties as such appointee and the same shall be deemed and held to be a special deposit and shall be held to be specially appropriated to the security and payment of such deposit and shall not be liable for the debts or obligations of the corporation."

(9) By adding a new section at the end of said Act as follows:

"Section 25. If any clause, sentence, paragraph or part of this Act shall for any reason be adjudged by any Court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder of this Act but shall be confined in its operation to the clause, sentence, paragraph or part thereof directly involved in the controversy in which such judgment shall have been rendered."

Approved February 28, 1933.