Source: http://leg.mt.gov/bills/1997/Bills/House/HB0055_01.htm
Timestamp: 2017-10-18 07:42:40
Document Index: 751139653

Matched Legal Cases: ['arts 1', 'art 18', 'art 6', 'art 18', 'art 6', 'art 6']

A Bill for an Act entitled: "An Act transferring the regulation of banking from the department of commerce and the commissioner of banking and financial institutions to the office of the state auditor; transferring the state banking board to the office of the state auditor; amending sections 2-18-103, 17-5-1529, 17-6-321, 32-1-101, 32-1-109, 32-1-201, 32-1-211, 32-1-212, 32-1-219, 32-1-220, 32-1-307, 32-1-382, 32-1-412, 32-1-452, 32-1-901, 32-1-902, 32-1-903, 32-1-904, 32-1-905, 32-1-906, 32-1-907, 32-1-908, 32-1-909, 32-1-910, 32-1-911, 32-1-912, 32-1-921, 32-1-1005, 32-1-1007, 32-2-101, 32-3-102, 32-3-104, 32-3-201, 32-3-202, 32-3-203, 32-3-204, 32-3-205, 32-3-206, 32-3-301, 32-3-302, 32-3-303, 32-3-307, 32-3-321, 32-3-322, 32-3-323, 32-3-401, 32-3-404, 32-3-412, 32-3-417, 32-3-611, 32-3-703, 32-3-705, 32-4-306, 32-5-102, 32-6-103, 32-7-101, 32-7-102, 32-7-103, 32-7-108, 32-7-109, 32-7-110, 32-7-115, 32-7-122, and 32-7-123, MCA, and Section 2, Chapter 64, Laws of 1995; repealing section 2-15-1803, MCA; and providing effective dates."
(2) The board is composed of six members. The members of the board must be appointed with consideration given to banks of small, medium, and large size and to geographical distribution. Two of the six members must be active officers in state banks of Montana; one member must be an active officer of a national bank doing business in Montana; and three members shall represent of the public, none of whom may be an officer, director, or shareholder of any state or national bank. The board shall elect a presiding officer from its members.
(q) executive director of the Montana wheat and barley committee; and
"32-1-101. Short title -- application -- purpose. (1) Parts 1 through 5 of this chapter shall be are known as the "Bank Act".
(b) corporations that subject themselves to the bank act; and
(c) persons, partnerships, or corporations who that by violating the bank act become subject to the penalties provided in the bank act.
(1) "Bank holding company" means a bank holding company registered under the federal Bank Holding Company Act of 1956, as amended.
(3) "Branch bank" means a banking house, other than the main banking house, maintained and operated by a bank doing business in the state but does not include a detached facility, as provided for in 32-1-372, or a satellite terminal, as defined in 32-6-103.
(4) "Capital", "capital stock", and "paid-in capital" mean that fund for which certificates of stock are issued to stockholders.
(5) "City" means a city, town, or municipality, incorporated or unincorporated, that is an aggregation of inhabitants and structures sufficient to constitute a distinct place.
(6) "City limits" means, in the case of:
(a) an incorporated city, the corporate limits as provided for in 7-2-4101; or
(b) an unincorporated place, the boundaries that under the circumstances define the city as a distinct place.
(7) "Common ownership" means the ownership, directly or indirectly, of 80% or more of the voting stock of each of two or more banks by an individual, group of individuals, entity, or corporation.
(8) "Community advisory board" means a group of citizens to advise the management of a branch bank, a majority of whom must be residents of the county in which the branch bank is located.
(9) "Consolidate" and "merge" mean the same thing and may be used interchangeably in this chapter.
(10) "Demand deposits" means all deposits, the payment of which can legally be required when demanded.
(11) "Department" means the department of commerce office of the state auditor provided for in Title 2, chapter 15, part 18 6.
(12) "Division" means the division of banking and financial institutions of the department.
(13)(12) "Main banking house" means the principal place of business of a bank in the state.
(14)(13) "Net earnings" means the excess of the gross earnings of a bank over expenses and losses chargeable against those earnings during any one 1 year.
(15)(14) "Principal shareholder" means a person who directly or indirectly owns or controls, individually or through others, more than 10% of any class of voting stock.
(16)(15) "Profit and loss account" or "profit and loss" means that account carried on the books of the bank into which all earnings accounts and recoveries are closed, thus exhibiting "gross earnings", and against which all loss and other disbursement items are charged, revealing "net earnings", which are then properly closed to "undivided profits accounts" or "undivided profits", out of which dividends are paid and reserves set aside.
(17)(16) "Surplus" means a fund paid in or created under this chapter by a bank from its net earnings or undivided profits which that, when set apart and designated as such surplus, is not available for the payment of dividends and cannot be used for the payment of expenses or losses so long as such the bank has undivided profits.
(18)(17) "Time deposits" means all deposits, the payment of which cannot legally be required within 7 days.
(19)(18) "Undivided profits" means the credit balance of the profit and loss account of a bank."
(6) The board members shall must receive compensation and travel expenses in the same manner and amount as provided for in 37-1-133 for boards allocated to the department of commerce $50 a day compensation and travel expenses, as provided for in 2-18-501 through 2-18-503, for each day spent on official board business. Board members who conduct official board business in their city of residence are entitled to receive a midday meal allowance as provided for in 2-18-502. The costs and expenses of the board are legitimate charges of the department."
"32-1-220. Examination of holding companies and affiliated entities. The division department shall request assistance from and cooperate with the federal reserve system in the examination of bank holding companies under the Bank Holding Company Act of 1956 in order to resolve issues relating to the safety and soundness of banks under the jurisdiction of the division department."
(2) Subject to subsections (1) and (3), a bank may not at any time become indebted either directly or indirectly for borrowed money or rediscounts in an amount in excess of its paid-up capital and surplus, without first obtaining written authority from the department. Debentures or certificates of indebtedness issued by an investment company to run for a period of 3 years or more may not be included in the deposit liabilities of that investment company, as affected by the provisions of this section.
(2) The hearing may not be earlier than 30 days or later than 60 days after service of the notice unless an earlier or a later date is set by the director state auditor at the request of the institution. Unless the institution appears at the hearing by a duly an authorized representative, it shall must be considered to have consented to the issuance of the cease and desist order. In the event of such consent or if upon the record made at any such the hearing the director state auditor finds that any an unsafe or unsound practice or violation specified in the notice of charges has been established by the preponderance of the evidence, the director state auditor may issue and serve upon the institution an order to cease and desist from any such that practice or violation. By provisions which that may be mandatory or otherwise, the order may require the institution and its board members, officers, employees, and agents to cease and desist from such a practice or violation and to take affirmative action to correct the conditions resulting from any such the practice or violation.
"32-1-903. Informal conferences -- time for application. Within 15 days after service of the a notice of charges, either the institution or department may request an informal conference to discuss the charges and the possible disposition of them without a formal hearing process. The conference shall must be carried out in accordance with the provisions of 2-4-603. Upon a proper showing, the director in his discretion state auditor may withdraw charges and proceedings for a cease and desist order."
(2) Whenever in the opinion of the director state auditor any board member or officer of an institution has, by conduct or practice with respect to another institution or business organization which that has resulted in substantial financial loss or other damage to that institution or business organization, evidenced his personal disability and unfitness to continue as a board member or officer of the institution, and or whenever the director state auditor has reasonable cause to believe that any other person participating in the conduct of the affairs of an institution has, by conduct or practice with respect to such that institution, another institution, or other business organization which that has resulted in substantial financial loss or other damage to the institution or business organization, evidenced his personal disability and unfitness to participate in the conduct of the affairs of such that institution, the director state auditor may serve upon the board member, officer, or other person a written notice of intention to remove such the board member, officer, or person from office or to prohibit his further participation in any manner in the conduct of the affairs of the institution.
(4) Unless the board member, officer, or other person appears at the hearing in person or by a duly an authorized representative, he shall the board member, officer, or other person be is considered to have consented to the issuance of an order of removal or prohibition. In the event of consent or if upon the record made at the hearing the director state auditor finds that any of the grounds specified in the notice have been established by the preponderance of the evidence, the director state auditor may issue such orders of suspension, removal from office, or prohibition from participation in the conduct of the affairs of the institution as he considers considered appropriate. The order becomes effective 30 days after service upon the institution and the board member, officer, or other person concerned, except in the case of an order issued upon consent which that becomes effective at the time specified therein in the order. The order remains effective and enforceable until it is stayed, modified, terminated, or set aside by action of the director state auditor or a reviewing court."
"32-1-908. Felony charges -- suspension or prohibition. (1) Whenever any a board member or officer of an institution or other person participating in the conduct of the affairs of an institution is charged in any information, indictment, warrant, or complaint authorized by a county, state, or federal authority with the commission of or participation in a felony involving dishonesty or breach of trust, the director state auditor by written notice served upon the board member, officer, or other person may suspend the board member, officer, or other person him from office or prohibit him from further participation in any manner in the conduct of the affairs of the institution. Suspension is effective upon service upon the individual. The notice shall must contain a statement of the facts constituting the grounds for the order and shall must fix a place and time, not later than 10 days from the date of the notice, at which a hearing will must be held to afford the board member, or officer, or other person the opportunity to respond. A copy of the notice shall must also be served upon the institution. The suspension or prohibition remains in effect until the information, indictment, warrant, or complaint is finally disposed of or until terminated by the director state auditor.
"32-1-909. Board of directors -- lack of quorum -- temporary board members. If at any time because of the suspension or removal of one or more board members pursuant to this part the board of directors of an institution has less than a quorum of board members not so suspended or removed, all powers and functions vested in or exercisable by the board shall vest vest in and be are exercisable by the board members not so suspended or removed until such time as there is a quorum of the board members. If all of the board members have been suspended or removed, the director state auditor shall appoint persons to serve temporarily as board members, pending the termination of the suspensions or removals or until such the time as their that the appointees' successors are duly elected and take office."
"32-1-910. Hearings -- decision -- review, modification, termination or stay of orders. (1) Any hearing provided for in this part shall must be conducted in accordance with the provisions of the Montana Administrative Procedure Act. The hearing shall must be private unless the director state auditor, after fully considering the views of the party afforded the hearing, determines that a public hearing is necessary to protect the public interest. After the hearing and within 90 days after the director state auditor has notified the parties that the case has been submitted to him for final decision, he the state auditor shall render his a decision, which shall must include findings of fact upon which his the decision is predicated, and the state auditor shall issue and serve upon each party to the proceeding an order consistent with the provisions of this section.
(2) Any A party to the hearing or any a person required by an order issued under this part to cease and desist from any of the violations or practices stated therein in the order or any a person suspended, removed, or prohibited from participation in the conduct of the affairs of an institution may, by an order, obtain a review of any that order, other than a consent order,. which The review shall must be conducted pursuant to the Montana Administrative Procedure Act. Unless a petition for review is timely filed as provided in the Montana Administrative Procedure Act, the director state auditor, at any time, upon such notice and in such a manner as he that the state auditor considers proper, may modify, terminate, or set aside the order. Upon the timely filing of a petition for review, the director state auditor may modify, terminate, or set aside the order with the permission of the court."
"32-1-921. Violation of notice or final order -- penalties. (1) Any present or former board member or officer of an institution or any other person against whom there is outstanding and effective any notice or final order served upon the board member, officer, or other person pursuant to 32-1-905, 32-1-907, or 32-1-908 who is guilty of a misdemeanor or if the individual:
(a) participates in any manner in the conduct of the affairs of such that institution;
(b) directly or indirectly solicits, procures, transfers, or attempts to transfer votes or attempts to vote any proxies, consents, or authorizations in respect to any voting rights in such that institution; or
(c) without the prior written approval of the director state auditor, votes for a board member or serves as a board member, officer, or employee of such that institution. is guilty of a misdemeanor and
"32-1-1005. Bond. Before accepting an appointment or acting as a trustee, guardian, or conservator, a foreign trust company shall file a bond with a court of competent jurisdiction in an amount as the court directs, with sufficient sureties, conditioned on the faithful discharge of its duties as trustee, guardian, or conservator. In lieu of the bond, the foreign trust company shall certify, in a manner acceptable to the department of commerce office of the state auditor, that the capital stock of the foreign trust company is fully paid in cash, is on deposit with an appropriate bank, and is of a sufficient amount to meet the requirements of 32-1-307(3) for a trust company organized under the laws of this state. The deposit must be maintained until the foreign trust company ceases to act as trustee, guardian, or conservator under this part. A foreign trust company does not have to file a bond or certify the deposit of its capital with respect to a trust, created other than a trust created by a will, if the trust instrument requests or directs that a bond is not required of the trustee."
"32-3-102. Definition Definitions and purposes. For the purposes of this chapter, the following definitions apply:
(2) A fine of $5 for each day a report is in arrears shall must be levied against the offending credit union unless it is excused for cause by the director state auditor."
(3) In lieu of making an annual examination of a credit union, the director state auditor may accept an audit report of the condition of the credit union made by an auditor approved by the director state auditor. The cost of the audit shall must be borne by the credit union."
"32-3-206. Authorized activities of credit unions. Upon written application to the director state auditor, a credit union may engage in any activity in which such the credit union could engage were if it were operating as a federal chartered credit union at the time such that the authority is granted. Such powers shall The activities include, but not by way of limitation, the power to do any act and own, possess, and carry as assets property of such character, including stocks, bonds, or other debentures, which, at the time that the authority is granted, are authorized under federal laws and regulations for transactions by federal credit unions, notwithstanding any restrictions elsewhere contained in the statutes of the state of Montana except that the director. The state auditor may not charter a credit union not having a common bond of membership as defined in 32-3-304. The director state auditor shall approve an activity if he finds upon finding that it fosters competitive equality between state and federal credit unions and prevents adverse effects on members of state-chartered credit unions. If the director state auditor disapproves an activity, the credit union must be given an opportunity for a hearing pursuant to Title 2, chapter 4, part 6, to determine whether a compelling reason exists for denying approval of the activity for which the credit union applied."
(8) As soon as the board of directors or the liquidating agent determines that all assets from which there is a reasonable expectancy of realization have been liquidated and distributed as set forth in this section, he the board or agent shall execute a certificate of dissolution on a form prescribed by the department and file the same form with the department, together with all pertinent books and records of the liquidating credit union,. whereupon such The credit union shall be is dissolved when all documents are properly filed."
(3) Such The certificate and a copy of the plan of merger agreed upon shall must be forwarded to the director, and certified by him the state auditor, and returned to both credit unions within 30 days.
(4) Upon return of the certificate from the director state auditor, all property rights and members' interest of the merged credit union shall vest in the surviving credit union without deed, endorsement, or other instrument of transfer, and all debts, obligations, and liabilities of the merged credit union shall be are deemed to have been considered assumed by the surviving credit union under whose charter the merger was effected. The rights and privileges of the members of the merged credit union shall remain intact.
"32-3-404. Record of board and committee members. Within 15 days after election or appointment, a record of the names and addresses of the members of the board, committees, and all officers of the credit union shall must be filed with the department of commerce on forms provided by the department."
"32-4-306. Control -- supervision -- reports. The corporation is subject to the examination of the department of commerce and shall make reports of its condition not less than annually to that the department, which in turn shall make copies of the reports available to the commissioner of insurance and retain a copy for insurance regulatory purposes and shall send a copy to the governor. The corporation shall also file an annual statement required by Title 35."
(1) "Consumer type loan business" means the business of making loans generally repayable in substantially equal installments.
(2) "Department" means the department of commerce office of the state auditor provided for in Title 2, chapter 15, part 18 6.
(3) "License" means one or both of the licenses provided for by this chapter.
(4) "Licensee" means the person holding a license.
(5) "Person" means individuals, partnerships, associations, corporations, and all legal entities in the loaning business."
(3)(2) "Escrow" means any transaction in which one person, for the purpose of effecting the sale, transfer, encumbrance, or lease of real or personal property to another person or for the purpose of making payments under any encumbrance of the property, delivers any written instrument, money, evidence, title to real or personal property, or other thing of value to a third person to be held by that third person until the happening of a specified event or the performance of a prescribed condition, when the instrument, money, evidence, title, or thing of value is to be delivered by the third person to a grantee, grantor, promisee, promisor, obligee, obligor, bailee, or bailor or to any of his agents or employees pursuant to the written escrow instructions.
Section 66. Section 2, Chapter 64, Laws of 1995, is amended to read:
NEW SECTION. Section 67. Repealer. Section 2-15-1803, MCA, is repealed.
NEW SECTION. Section 68. Name change -- directions to code commissioner. Wherever reference to regulation of banking refers to the "department of commerce" or wherever the "commissioner of banking and financial institutions" appears in the Montana Code Annotated or in legislation enacted by the 1997 legislature, the code commissioner is directed to change it to an appropriate reference to the "state auditor".
NEW SECTION. Section 69. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 2, chapter 15, part 6, and the provisions of Title 2, chapter 15, part 6, apply to [section 1].
NEW SECTION. Section 70. Transition. The provisions of 2-15-131 through 2-15-137 apply to [this act].
NEW SECTION. Section 71. Effective dates. (1) Except as provider in subsection (2), [this act] is effective October 1, 1997.
(2) [Sections 68 through 70 and this section] are effective on passage and approval.