GA Code § 7-1-4 (2021)
2021 Georgia Code|Title 7 - Banking and Finance|Chapter 1 - Financial Institutions|Article 1 - Provisions Applicable to Department of Banking and Finance and Financial Institutions Generally|Part 1 - Purposes and Preliminary Matters|§ 7-1-4. Definitions

 Subject to additional definitions contained in the subsequent provisions of this chapter, as used in this chapter, the term:    "Affiliate" means any corporation, business trust, association, or other similar organization:   Of which a financial institution, directly or indirectly, owns or controls either a majority of the voting shares or more than 50 percent of the number of shares voted for the election of its directors, trustees, or other persons exercising similar functions at the preceding election or controls in any manner the election of a majority of its directors, trustees, or other persons exercising similar functions;   Of which control is held, directly or indirectly, through stock ownership or in any other manner by the shareholders of a financial institution who own or control either a majority of the shares of such financial institution or more than 50 percent of the number of shares voted for the election of directors of such financial institution at the preceding election or by trustees for the benefit of the shareholders of any such financial institutions;   Of which a majority of its directors, trustees, or other persons exercising similar functions are directors of any one financial institution; or   Which owns or controls, directly or indirectly, either a majority of the shares of a financial institution or more than 50 percent of the number of shares of a financial institution voted for the election of directors of a financial institution at the preceding election or controls in any manner the election of a majority of the directors of a financial institution or for the benefit of whose shareholders or members all or substantially all the capital stock of a financial institution is held by trustees.    (1.5) "Agency relationship" is a relationship created by a contractual agreement whereby a financial institution agrees with a third party, including another financial institution, to act in a principal or agent capacity to facilitate the conduct of activities related to the business of banking, which activities are currently authorized under this chapter or under other applicable law.    "Agreement for the payment of money" means a consensual monetary obligation not in the form of an evidence of indebtedness or an investment security and includes an account or general intangible as defined in Code Section 11-9-102.   Reserved.   "Articles" means original or restated articles of incorporation or articles of consolidation and all the amendments thereto, including articles of merger or conversion, and also includes what heretofore have been designated by law as certificates of incorporation or charters and, in case of foreign corporations, whatever documents are equivalent to "articles" in their jurisdiction of incorporation. After an amendment restating articles in their entirety, the "articles" shall not include any prior documents, and the certificate of amendment issued by the Secretary of State shall so state.   "Assets" means all the property and rights of every kind of a financial institution.   "Attorney" means an attorney at law who is regularly retained as counsel for a financial institution or who is a partner or associate of a firm which is regularly retained as counsel for a financial institution.   "Bank" means a corporation existing under the laws of this state on April 1, 1975, or organized under this chapter and authorized to engage in the business of receiving deposits withdrawable on demand or deposits withdrawable after stated notice or lapse of time; "bank" shall also include national banks located in this state for the purpose of Part 6 of Article 2 of this chapter, relating to deposits, safe-deposit agreements, and money received for transmission, and Article 8 of this chapter, relating to multiple deposit accounts; provided, however, that the term "bank" shall not include a credit union, a savings and loan association, or a licensee under Article 4 of this chapter, but shall include a federal or state credit union for the purposes of Part 6 of Article 2 of this chapter, provided that this inclusion is not intended to grant or expand any powers to credit unions not authorized in Part 6 of Article 2 of this chapter or by other law.   Reserved.   "Capital debt" means the sum of the face value of the subordinated securities of a financial institution issued pursuant to Code Section 7-1-419.   "Capital stock" means the sum of the par value of the authorized shares which have been issued and remain outstanding of a bank or trust company.   Reserved.   "Commercial bank" means a bank authorized to hold deposits subject to check.   "Commissioner" means the commissioner of banking and finance.   "Corporation" means a corporation, whether profit or nonprofit, and includes a professional corporation or joint-stock association, organized under the laws of this state, the United States, or any other state, territory, or dependency of the United States or under the laws of a foreign country.   "Credit union" means a cooperative society incorporated under the laws of this state on April 1, 1975, or organized under Article 3 of this chapter and existing for the twofold purpose of promoting thrift among its members and creating a source of credit for them at reasonable rates.   "Department" means the Department of Banking and Finance.   "Depositor" means any person or corporation who shall deposit money or items for the payment of money in any financial institution, which funds are subsequently (allowing time for collections) withdrawable either on demand or after a stated notice or lapse of time, whether interest is allowed thereon or not, and shall also include:   Holders of demand and time certificates of deposit;   Owners of certified or cashiers' checks and checks purchased from a licensee under Article 4 of this chapter; and   Shareholders in credit unions, federal credit unions, and savings and loan associations to the extent that funds paid in by them are withdrawable within the terms of this definition.     "Evidence of indebtedness" means a note, draft, or similar negotiable or nonnegotiable instrument.   "Federal credit union" means an association organized pursuant to the Federal Credit Union Act, 12 U.S.C. Sections 1750-1795i.   "Fiduciary" means an executor, administrator, guardian, receiver, trustee, assignee for benefit of creditors, or one acting in a similar capacity.   "Financial institution" means:   A bank;   A trust company;   Reserved;   A credit union;   A corporation licensed to engage in the business of selling payment instruments in this state on April 1, 1975, or so licensed pursuant to Article 4 of this chapter;   Business development corporations existing on April 1, 1975, pursuant to the former "Georgia Business Development Corporation Act of 1972," approved April 3, 1972 (Ga. L. 1972, p. 798), or organized pursuant to Article 6 of this chapter;   An international bank agency doing business in this state on April 1, 1975, pursuant to the former "International Bank Agency Act," approved April 6, 1972 (Ga. L. 1972, p. 1140), or authorized to do business in this state pursuant to Article 5 of this chapter;   In addition, as the context requires, a national bank, savings and loan association, or federal credit union for the purpose of the following provisions:   Code Section 7-1-2, relating to findings of the General Assembly;   Code Section 7-1-8, relating to supplementary principles of law;   Code Section 7-1-37, relating to restrictions on officials and personnel;   Code Section 7-1-70, relating to disclosure of information;   Code Section 7-1-90, relating to judicial review of department actions;   Code Sections 7-1-111 and 7-1-112, relating to emergency closings and business restrictions;   Paragraph (3) of subsection (a) of Code Section 7-1-394, relating to criteria to be considered in approving new banks;   Code Section 7-1-840, relating to criminal prosecutions; and   Code Section 7-1-841, relating to application of Title 16 provisions;     A bank holding company as defined in Code Section 7-1-605 for the purposes of Code Sections 7-1-61, 7-1-71, and 7-1-91;   Banks chartered by states other than Georgia for the purposes of paragraph (10) of Code Section 7-1-261, relating to agency relationships;   Federal credit unions for the purposes of Part 6 of Article 2 of this chapter, relating to deposits, safe-deposit agreements, and money received for transmission, and Article 8 of this chapter, relating to multiple-party accounts; and   Banks and credit unions chartered by states other than Georgia, national banks, federal credit unions, and federal savings and loan associations for the purposes of paragraph (1) of Code Section 7-1-650, provided that such institutions have federal deposit insurance.     "Insolvency" means:   Inability to meet liabilities as they become due in the regular course of business; or   Insufficiency in actual cash market value of assets to pay liabilities to depositors and other creditors.    (22.5) "Main office" means the principal banking location of a bank as such location appears in the records of the Department of Banking and Finance. If a bank does not designate a main office, the department shall choose a banking location of the bank to be the main office.    "National bank" means a national banking association organized pursuant to 12 U.S.C. Section 21-215b.   Reserved.   "Paid-in capital" means the sum of the considerations received in the sale or exchange of shares of a bank or trust company in excess of the amount of the capital stock and includes the surplus, if any, created by or arising out of a reduction of the capital stock of such financial institution effected in a manner permitted by law, any amounts properly regarded as surplus of such financial institution on April 1, 1975.   "Person" means an individual, trust, general or limited partnership, unincorporated association (except a joint-stock association), or any other form of unincorporated enterprise.   "Principal court" means the superior court of the county where the registered office of a financial institution is located or, in the case of a proposed financial institution, will initially be located, as shown in its articles or application for authority to commence business. Whenever under this chapter the principal court is authorized to take any action but lacks, because of constitutional restrictions, jurisdiction or venue over the person or corporation against which such action is to be taken or over the subject matter which is to be affected by its action, then such action may be taken by the superior court of this state in which jurisdiction and venue are proper or, in the absence of any such court, by a court of another state, a federal court, or a court of a foreign country in which jurisdiction and venue are proper.   "Public body" means an agency, authority, board, commission, instrumentality, or similar entity which is part of or connected with the government or political subdivision referred to in the context.   "Public sale" means a sale:   Held at a place reasonably available to persons who might desire to attend and submit bids;   At which those attending shall be given the opportunity to bid on a competitive basis;   At which the sale, if made, shall be made to the highest and best bidder; and   Except as otherwise provided in Title 11 for advertising or dispensing with the advertising of public sales, of which notice is given by advertisement once a week for two weeks in the newspaper in which the sheriff's advertisements are published in the county where the sale is to be held, and which notice shall state the day and hour, between 9:00 A.M. and 5:00 P.M., and the place of sale and shall briefly identify the goods to be sold.    (29.5) "Registered agent" means the person or corporation on whom service of process is to be made in a proceeding against a bank. Written notice of any change in the identity or address of a bank's registered agent must be delivered to the Department of Banking and Finance in addition to and at the same time as such notice is filed with the Secretary of State. The provisions of Part 1 of Article 5 of Chapter 2 of Title 14 shall apply to any such registered agent.    "Registered office" means the location of the registered agent and may be a banking location.  (30.5) "Retained earnings" means the balance of the net profits, income, gains, and losses from the date of incorporation or from the latest date when a deficit was last eliminated of a financial institution whose articles were granted by the Secretary of State and excludes subsequent distributions to shareholders and transfers to appropriated retained earnings. Retained earnings shall also include any portion of paid-in capital or appropriated retained earnings or, in the case of other organizations, equivalent funds, allocated to retained earnings in mergers, consolidations, or acquisitions of all or substantially all of the property or assets of another such financial institution or other organization permitted by law.    "Savings and loan association" means an association created pursuant to the Home Owners' Loan Act, 12 U.S.C. Sections 1461-1470, including a federal savings bank.   "Savings bank" means a state chartered bank that has powers no greater than a state bank as provided in this chapter but that may lend and invest in commercial loans in an aggregate amount that does not exceed 50 percent of its total assets. Such bank may elect, subject to department approval, or the department may require that the savings bank comply with selected provisions of the Home Owners' Loan Act that in the judgment and discretion of the department would be consistent with the charter and purpose of the bank. For the purposes of this paragraph, the term "commercial loan" means a loan for business, commercial, corporate, or agricultural purposes.   "Shareholder" means the owner of shares in a financial institution.   "Shares" means the units into which the proprietary interest of the institution is divided.  (34.1) "State savings and loan association" means a bank which pays interest on substantially all of its depositors' funds and the majority of whose loans are secured by first liens on or other security interest in residential real property or upon the security of its deposits.    "Statutory capital base" means the sum of the common equity tier 1 capital, as defined by applicable federal law, and the allowance of loan and lease losses, as defined by applicable federal law, as reported in the bank's most recent Consolidated Report of Condition and Income; provided, however, that the department may enact regulations to phase in the revision to this definition for those banks that will have a decreased statutory capital base as of July 1, 2017. If significant capital changes occur after the filing of the Consolidated Report of Condition and Income which causes the common equity tier 1 capital to increase or decrease by 5 percent or more, then the statutory capital base will be immediately recalculated at the time of the capital change and it will be effective until the filing of the next Consolidated Report of Condition and Income.   "Subject to check" includes withdrawal or transfer by negotiable or transferable order or authorization even though such order or authorization does not constitute a check under Code Section 11-3-104.   "Subsidiary" means a corporation controlled by a financial institution which owns at least a majority of its voting shares.   "Third-party payment service" means any system employing checks, drafts, computer transmissions, or other techniques by which a depositor may effect payment to third parties.   "Treasury shares" means shares of a financial institution which have been issued, have been subsequently acquired by, and belong to the financial institution otherwise than in a fiduciary capacity and have not been canceled. Such shares shall be deemed to be "issued" but not "outstanding" shares.   "Trust company" means a corporation existing under the laws of this state on April 1, 1975, or organized under this chapter and authorized by law to engage in the business of acting as a fiduciary.    (Code 1933, § 41A-102, enacted by Ga. L. 1974, p. 705, § 1; Ga. L. 1975, p. 445, § 1; Ga. L. 1977, p. 730, § 1; Ga. L. 1980, p. 972, § 1; Ga. L. 1981, p. 1566, § 1; Ga. L. 1982, p. 3, § 7; Ga. L. 1982, p. 2496, §§ 1, 2; Ga. L. 1983, p. 493, § 2; Ga. L. 1984, p. 949, § 1; Ga. L. 1985, p. 258, § 1; Ga. L. 1986, p. 458, § 1; Ga. L. 1991, p. 94, § 7; Ga. L. 1995, p. 673, §§ 1, 2; Ga. L. 1996, p. 6, § 7; Ga. L. 1998, p. 795, §§ 1, 2; Ga. L. 2000, p. 174, § 1; Ga. L. 2001, p. 362, § 24; Ga. L. 2001, p. 970, § 1; Ga. L. 2005, p. 826, § 1/SB 82; Ga. L. 2006, p. 72, § 7/SB 465; Ga. L. 2007, p. 502, § 1/SB 70; Ga. L. 2009, p. 86, § 1/HB 141; Ga. L. 2011, p. 518, § 1/HB 239; Ga. L. 2012, p. 775, § 7/HB 942; Ga. L. 2015, p. 344, § 1/HB 184; Ga. L. 2015, p. 996, § 3C-1/SB 65; Ga. L. 2016, p. 390, § 7-1/HB 811; Ga. L. 2017, p. 193, § 1/HB 143; Ga. L. 2019, p. 828, § 1/HB 185.)    The 2019 amendment,  effective July 1, 2019, in paragraph (3), substituted "Reserved." for " 'Appropriated retained earnings' means that portion of the retained earnings of a bank or trust company set aside by resolution of the board of directors as unavailable for the payment of dividends or other distribution to shareholders."; substituted "actions" for "action" at the end of division (21)(H)(v); deleted "and" at the end of subparagraph (21)(J); substituted "; and" for a period at the end of subparagraph (21)(K); added subparagraph (21)(L); and, in paragraph (25), deleted "and the expense fund required by Code Section 7-1-396" following "amount of the capital stock" near the middle and deleted ", and any amounts transferred from the expense fund as permitted by Code Section 7-1-412" following "1975" at the end.   Editor's notes.   - The Georgia Business Development Corporation Act of 1972, referred to in subparagraph (21)(F) of this section, was enacted by Ga. L. 1972, p. 798, and repealed by Ga. L. 1974, p. 705, § 3(k). The International Bank Agency Act, referred to in subparagraph (21)(G) of this Code section, was enacted by Ga. L. 1972, p. 1140, and repealed by Ga. L. 1974, p. 705, § 3(j).   Ga. L. 1983, p. 493, § 1, not codified by the General Assembly, provides that: "It is the intent of this Act to implement certain changes required by Article III, Section VI, Paragraph V(a) of the Constitution of the State of Georgia."   Ga. L. 2015, p. 996, § 1-1/SB 65, not codified by the General Assembly, provides:   "(a) This Act shall be known and may be cited as the 'Debtor Creditor Uniform Law Modernization Act of 2015.'   "(b) To promote consistency among the states, it is the intent of the General Assembly to modernize certain existing uniform laws promulgated by the Uniform Law Commission affecting debtor and creditor rights, responsibilities, and relationships and other federally recognized laws affecting such rights, responsibilities, and relationships."   Administrative Rules and Regulations.   - Agency relationship of financial institutions; Bank service contracts, Official Compilation of the Rules and Regulations of the State of Georgia, Department of Banking and Finance, Banks, Chapter 80-1-2.   Law reviews.   - For survey article on commercial law, see 34 Mercer L. Rev. 31 (1982). For article, "Business Associations," see 53 Mercer L. Rev. 109 (2001).   JUDICIAL DECISIONS   Editor's notes.   - In light of the similarity of the statutory provisions, decisions under former Ga. L. 1919, p. 135 are included in the annotations for this Code section.   Corporation did not meet definition of person.    - Corporation was not an eligible "payable on death" (POD) beneficiary on certificates of deposit or a trust account because under O.C.G.A. § 7-1-810(11), a POD payee on a death account had to have been a person, and under § 7-1-810(2), a beneficiary on a trust account had to have been a person; under O.C.G.A. § 7-1-4(26), a "person" was defined as an individual, trust, general or limited partnership, unincorporated association (except a joint-stock association), or any other form of unincorporated enterprise. Thus, the corporation did not meet the statutory definition of person. Tuvim v. United Jewish Cmtys., Inc., 285 Ga. 632, 680 S.E.2d 827 (2009).   Issuance of passbook.    - Deposit is or is not, according to agreement, subject to check on bank with which the deposit was actually placed, and may or may not bear interest, and may be or may not be payable on demand. Issuance of a passbook is not conclusive evidence, but is material on the question whether the transaction is simply that of a borrower and lender in the ordinary sense or that of a deposit. Citizens Bank v. Mobley, 166 Ga. 543, 144 S.E. 119 (1928), (decided under former GA. L. 1919, p. 135).   Execution and delivery of certificates of deposit.    - In suit by depositor against bank, upon certificates of deposit issued by bank to depositor or depositor's agent, depositor made prima facie case of liability by proof of execution and delivery of certificates as alleged. Bank of Emanuel v. Hall, 33 Ga. App. 358, 126 S.E. 728, cert. denied, 33 Ga. App. 828 (1925), (decided under former Ga. L. 1919, p. 135).   OPINIONS OF THE ATTORNEY GENERAL   "Receiving deposits".    - Arrangement by which business corporation would receive money from individuals and in return issue to the individuals the corporation's debt securities redeemable by negotiable checks would involve "receiving deposits" within the meaning of O.C.G.A. § 7-1-4(7), and only persons or entities authorized to engage in the banking business by O.C.G.A. § 7-1-241 may lawfully engage in such arrangements. 1982 Op. Att'y Gen. No. 82-68.   RESEARCH REFERENCES   Am. Jur. 2d.   - 10 Am. Jur. 2d, Banks and Financial Institutions, §§ 1, 13, 14, 146, 147, 176 et seq., 308, 328, 711 et seq. 18 Corporations, §§ 1-4, 28 to 41, 55. 11 Am. Jur. 2d, Banks and Financial Institutions, §§ 1017 et seq., 1032, 1034, 1046 et seq. 18A Am. Jur. 2d, Corporations, §§ 194, 270, 425, 439, 721. 18B Am. Jur. 2d, Corporations, § 1171. 19 Am. Jur. 2d, Corporations, § 2136 et seq.   C.J.S.   - 9 C.J.S., Banks and Banking, §§ 2, 3, 171, 267 et seq., 274, 497, 596, 622. 12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions, § 1 et seq. 18 C.J.S., Corporations, § 1 et seq. 19 C.J.S., Corporations, § 707 et seq.   ALR.    - What is a bank or banking corporation within exemption provision of Bankruptcy Act, 97 A.L.R. 1087.    What are "financial corporations" or "moneyed institutions" within state tax laws, 145 A.L.R. 354.   Maintenance of computer terminal in retail store for purpose of effecting transfer of funds between financial institution and its depositors as conduct of banking business by store, 73 A.L.R.3d 1282.