reglab/statecodes huggingface dataset:
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-5 - Part 5 Officers and Directors (487.13501...487.13507) › Section 487.13502 - Board of Directors; Oath.

487.13502 Board of directors; oath.
Sec. 3502.
Every director when elected or appointed shall take and subscribe an oath that he or she will diligently and honestly perform the duties of the office and will not knowingly violate, or permit to be violated, any provisions of this act. The oath shall be transmitted to the commissioner for filing.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-5 - Part 5 Officers and Directors (487.13501...487.13507) › Section 487.13503 - Sale or Purchase of Securities or Property.

487.13503 Sale or purchase of securities or property.
Sec. 3503.
(1) A bank may contract for, or purchase from, any of its directors, or from any person of which any of the bank's directors is an officer, director, manager, owner, employee, or agent, any securities or other property, only when the purchase is made in the ordinary course of business upon terms not less favorable to the bank than those offered by others, and the purchase is authorized by a majority of the board of directors not interested in the sale of the securities or property evidenced by their affirmative vote or written assent. If a director, or person of which any director is an officer, director, manager, owner, employee, or agent, acting for or on behalf of others, sells securities or other property to a bank, the commissioner may require a full disclosure to be made of all commissions or other considerations received. If a director or person, acting in his, her, or its own behalf, sells securities or other property to the bank, the commissioner may require a full disclosure of all profits realized from the sale.
(2) A bank may sell securities or other property to any of its directors, or to an entity of which any of its directors is an officer, director, manager, owner, employee, or agent in the ordinary course of business on terms not more favorable to the director or person than those offered to others, when the sale is authorized by a majority of the board of directors of a bank evidenced by their affirmative vote or written assent.
(3) This section shall not be construed as authorizing banks to purchase or sell securities or other property that banks are not otherwise authorized by law to purchase or sell.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-5 - Part 5 Officers and Directors (487.13501...487.13507) › Section 487.13504 - Discharge of Duties; Liability; Commencement of Action; Violation; Statute of Limitations.

487.13504 Discharge of duties; liability; commencement of action; violation; statute of limitations.
Sec. 3504.
(1) A director or an officer of a bank shall discharge the duties of his or her position in good faith and with that degree of diligence, care, and skill that an ordinarily prudent person would exercise under similar circumstances in a like position. In discharging his or her duties, a director or an officer, when acting in good faith, may rely upon the opinion of legal counsel for the bank, upon the report of an independent appraiser selected with reasonable care by the board or by an officer of the bank, or upon financial statements of the bank certified to him or her to be correct by an officer of the bank, or as stated in a written report by an independent public or certified public accountant or firm of accountants to reflect fairly the financial condition of the bank.
(2) The articles of incorporation of a bank may provide that a director is not personally liable to the bank or its shareholders for monetary damages for a breach of the director's fiduciary duty. The provision does not eliminate or limit the liability of a director for any of the following:
(a) A breach of the director's duty of loyalty to the bank or its shareholders.
(b) Acts or omissions not in good faith or that involve intentional misconduct or knowing violation of law.
(c) A violation of section 2312.
(d) A transaction from which the director derived an improper personal benefit.
(3) An action against a director or officer for failure to perform the duties imposed by this section shall be commenced within 3 years after the cause of action has accrued, or within 2 years after the time when the cause of action is discovered, or should reasonably have been discovered, by the complainant, whichever occurs first.
(4) If a director or officer of a bank knowingly violates, or knowingly permits any of the agents, officers, directors, or employees of the bank to violate, this act, rules promulgated under this act, or an order or declaratory ruling of the commissioner, every director and officer who participated in or assented to the violation shall be held liable in his or her personal and individual capacity for all damages that the bank, any shareholder, or any other person sustains as a result of the violation. An action to recover damages under this section shall be brought within 3 years from the time of the violation.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-5 - Part 5 Officers and Directors (487.13501...487.13507) › Section 487.13505 - Removal of Director.

487.13505 Removal of director.
Sec. 3505.
(1) The shareholders may remove 1 or more directors with or without cause unless the articles provide that directors may be removed only for cause. The vote for removal shall be by a majority of shares entitled to vote at an election of directors, except that the articles may require a higher vote for removal without cause. This section shall not invalidate any bylaw adopted before the effective date of this act that applies to removal without cause.
(2) In the case of a bank having cumulative voting, if less than the entire board is to be removed, a director shall not be removed if the votes cast against his or her removal would be sufficient to elect him or her if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which he or she is a part.
(3) If holders of a class or series of stock are entitled by the articles to elect 1 or more directors, this section applies, with respect to removal of a director so elected, to the vote of the holders of the outstanding shares of that class or series of stock.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-5 - Part 5 Officers and Directors (487.13501...487.13507) › Section 487.13506 - Sale of Stock or Securities; Officer or Employee as Agent Prohibited.

487.13506 Sale of stock or securities; officer or employee as agent prohibited.
Sec. 3506.
An officer or employee of any bank, in his or her individual capacity, shall not act as agent in the sale of stock or other securities to any person or receive directly or indirectly any consideration or commission resulting from the sale of stock or other securities by others to the bank by which he or she is employed.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-5 - Part 5 Officers and Directors (487.13501...487.13507) › Section 487.13507 - Procurement of Loan; Receipt of Gratuity or Consideration Prohibited.

487.13507 Procurement of loan; receipt of gratuity or consideration prohibited.
Sec. 3507.
An officer, director, or employee of a bank shall not receive, or consent, or agree to receive from a customer of the bank any consideration or gratuity in return for the procurement of a loan or other service from the bank.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-6 - Part 6 Shareholders (487.13601...487.13604) › Section 487.13601 - Meeting of Shareholders.

487.13601 Meeting of shareholders.
Sec. 3601.
(1) The annual meeting of the shareholders of every bank shall be held on the day in each year that is provided in the bylaws of the bank. Special meetings of shareholders shall be called and held as provided in the bylaws of the bank.
(2) At any meeting, each shareholder entitled to vote shall be entitled to 1 vote for each share held by the shareholder. A shareholder may vote at any meeting of the bank by proxy in writing signed by the shareholder.
(3) A bank may provide in the initial articles of incorporation or by amendment to the articles by a vote of shareholders owning a majority of the total number of shares of each class of its outstanding capital stock, that in an election of directors each shareholder may cast as many votes as the number of shares owned by the shareholder multiplied by the number of directors to be elected. In the shareholder's discretion, the shareholder may distribute his or her total number of votes cumulatively for 1 or more of the candidates.
(4) A person holding shares of the capital stock of a bank in a fiduciary capacity shall be entitled to vote the shares unless otherwise provided in the trust instrument. A person whose shares are pledged shall be entitled to vote unless the pledgor has expressly empowered the pledgee to vote the shares and the pledge of the stock and the empowerment to vote are recorded by the issuing bank or its agent, in which case only the pledgee or his or her proxy may vote the shares.
(5) A shareholder shall have the right to vote in person or by proxy, except that a bank shall not vote shares it holds under section 3804(4) or 4304(4).
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-6 - Part 6 Shareholders (487.13601...487.13604) › Section 487.13602 - Meeting Called by Commissioner.

487.13602 Meeting called by commissioner.
Sec. 3602.
The commissioner may call a meeting of the shareholders of any bank by giving at least 3 days' notice of the time, place, and purposes of the meeting to the shareholders by registered or certified mail sent to their last known addresses as shown on the records of the bank or by another appropriate method reasonably designed to provide adequate notice.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-6 - Part 6 Shareholders (487.13601...487.13604) › Section 487.13603 - Names and Addresses of Shareholders; Record.

487.13603 Names and addresses of shareholders; record.
Sec. 3603.
(1) A bank shall keep and maintain an accurate record of the name and address of each shareholder of the bank, the number of shares held by each, the date when the shareholders acquired the shares, and the name of the transferor.
(2) In lieu of the requirements under subsection (1), the board of directors of a bank may designate a corporation authorized by law to act as transfer agent or registrar of shares of corporations, to act as transfer agent or transfer agent and registrar of the shares of the bank, but the same corporation shall not be designed to act in both capacities at the same time.
(3) Upon demand by the commissioner, a bank shall submit to the commissioner a list containing the name and address of each shareholder of the bank together with the number of shares held by each according to its records as of the close of business on the date of issuance of the demand.
(4) Within 2 calendar weeks of any demand made for a purpose reasonably related to the requestor's interest as a shareholder or as a representative of a group of shareholders by any shareholder being the record owner of at least 5% of the issued shares of the bank or by any person representing any group who are the record owners of at least 5% of the issued shares of the bank, the bank shall prepare and furnish the requestor a list containing the name and address of each shareholder of the bank together with the number of shares held by each according to its records as of the close of business on the date of receipt of the demand.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-6 - Part 6 Shareholders (487.13601...487.13604) › Section 487.13604 - Provisions Applicable to Voting Stock.

487.13604 Provisions applicable to voting stock.
Sec. 3604.
If a vote of the holders of shares of stock is required in this act, those provisions shall apply only to the voting stock in the bank, out-of-state bank, national bank, association, or savings bank, voting by classes.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-7 - Part 7 Consolidation and Conversion (487.13701...487.13714) › Section 487.13702 - Consolidated Organization.

487.13702 Consolidated organization.
Sec. 3702.
On an interstate basis, a bank may consolidate with any number of consolidating organizations to form a consolidated organization in accordance with the laws under which the consolidated organization is chartered, if all of the following apply:
(a) Consolidation is permitted by the laws under which each consolidating organization is organized and the appropriate regulator or regulators approve the consolidation.
(b) The consolidating organizations provide notice to the commissioner by filing a copy of the application for consolidation within 10 days after the date the application is filed with the appropriate federal regulator.
(c) The consolidated organization complies with section 3703(3) with respect to notice of consolidation, but that notice is limited to a court, public tribunal, agency, or officer of this state.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-7 - Part 7 Consolidation and Conversion (487.13701...487.13714) › Section 487.13703 - Consolidated Bank; Rights, Privileges, and Powers.

487.13703 Consolidated bank; rights, privileges, and powers.
Sec. 3703.
(1) If approval and certification of the consolidation agreement as required by section 3701 have been completed, the corporate existence of each consolidating organization is merged into and continued in the consolidated bank. To the extent authorized by this act, the consolidated bank possesses all the rights, interests, privileges, powers, and franchises and is subject to all the restrictions, disabilities, liabilities, and duties of each of the consolidating organizations. The title to all property, real, personal, and mixed, is transferred to the consolidated bank, and shall not revert or be in any way impaired by reason of this act.
(2) A consolidated bank holds and enjoys the same and all rights of property, franchises, and interests, including appointments, designations, and nominations and all other rights and interests as a fiduciary, in the same manner and to the same extent as those rights and interests were held or enjoyed by each consolidating organization at the time of the consolidation. If a consolidating organization at the time of consolidation was acting under appointment of any court as a fiduciary, the consolidated bank is subject to removal by a court of competent jurisdiction.
(3) A consolidated bank shall file with each court or other public tribunal, agency, or officer in any state by which any of the consolidating organizations have been appointed as a fiduciary, and in the court file of each estate, suit, or any other proceeding in which any of them has been acting as a fiduciary, an affidavit setting forth the fact of consolidation, the name of each consolidating organization, the name of the consolidated bank, the location of its principal office, and the amount of its capital and surplus. This subsection does not require filing of an affidavit related to any consolidating organization that after the consolidation retains the same corporate name, charter, and principal office location.
(4) The liability of any consolidating organization or of a shareholder, director, or officer of a consolidating organization, or the rights or remedies of the creditors of, or other persons transacting business with, the consolidating organization shall not be altered or impaired as the result of a consolidation.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-7 - Part 7 Consolidation and Conversion (487.13701...487.13714) › Section 487.13704 - Service of Process.

487.13704 Service of process.
Sec. 3704.
(1) Whether it maintains a presence in this state, a consolidated organization or any of its successors in interest is subject to service of process in a proceeding in this state for enforcement of any obligation incurred in this state by any consolidating organization that is or was a party to a consolidation.
(2) An action or proceeding by or against any of the consolidating organizations in a court or any other public tribunal of this state may be prosecuted to judgment, as if consolidation had not taken place, or the consolidated bank or consolidated organization may be substituted in the place of any consolidating organization whose existence has ceased.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-7 - Part 7 Consolidation and Conversion (487.13701...487.13714) › Section 487.13705 - Notice of Operation.

487.13705 Notice of operation.
Sec. 3705.
(1) A consolidated bank or consolidated organization may operate all branches and principal offices located in this state of the consolidating organizations without providing the notice required by section 3711(1).
(2) A bank, out-of-state bank, national bank, association, or savings bank operating a branch in this state as the result of a consolidation shall provide notice of that operation to the commissioner within 30 days after the effective date of the consolidation.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-7 - Part 7 Consolidation and Conversion (487.13701...487.13714) › Section 487.13708 - Conversion of Bank Into Stock Association, Stock Savings Bank, or National Banking Association.

487.13708 Conversion of bank into stock association, stock savings bank, or national banking association.
Sec. 3708.
(1) Upon the affirmative vote of the shareholders representing more than 50% of the total number of shares of each class of its outstanding capital stock, a bank may be converted under the laws of this state into a stock association or stock savings bank or under the laws of the United States into a national banking association. The conversion of a bank into a stock association, stock savings bank, or national banking association shall not release the bank from its obligations to pay and discharge either of the following:
(a) All the liabilities created by law or incurred by the bank before becoming a stock association, stock savings bank, or a national banking association.
(b) Any tax imposed by this state up to the date of its becoming a stock association, stock savings bank, or national banking association in proportion to the time that has elapsed since the last preceding payment or assessment, penalty, or forfeiture imposed or incurred up to the date of its becoming a stock association, stock savings bank, or a national banking association.
(2) A conversion shall not be made to defeat or defraud any of the creditors of the bank.
(3) A certified copy of all resolutions relating to the proposed conversion adopted by the directors and shareholders of the bank shall be submitted to the bureau. If consent or approval is required by federal law, the bank shall provide the bureau with a certified copy of consent or approval of the appropriate federal regulator to the conversion.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-7 - Part 7 Consolidation and Conversion (487.13701...487.13714) › Section 487.13709 - Conversion of Depository Institution.

487.13709 Conversion of depository institution.
Sec. 3709.
(1) With the approval of the commissioner and upon the affirmative vote of the shareholders representing more than 50% of the total number of shares of each class of its outstanding capital stock, a national banking association, stock association, or stock savings bank doing business in this state and having capital and surplus sufficient to entitle it to become a bank under this act may be converted into a bank if the conversion is not in contravention of any laws of the United States.
(2) A depository institution converting under subsection (1) may submit articles of incorporation executed by a majority of the directors of the national banking association, stock association, or stock savings bank. A majority of the directors, after executing the articles of incorporation, shall have the power to execute all other papers and to do whatever is required to complete its organization as a bank. The shares of the bank may continue to be for the same amount as they were before the conversion, and the directors may continue to be directors of the bank until others have been elected or appointed under the laws of this state.
(3) The approval of the commissioner shall be based on an examination of the national banking association, stock association, or stock savings bank and on the action taken by its directors and shareholders with respect to the conversion. A conversion shall not be made to defeat or defraud any creditors. The commissioner may permit the converted bank to retain and carry assets of the converting national banking association, stock association, or stock savings bank which do not conform to the legal requirements relative to assets acquired and held by banks.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-7 - Part 7 Consolidation and Conversion (487.13701...487.13714) › Section 487.13712 - Discontinuing Branch Operations; Transfer of Functions to Principal Office.

487.13712 Discontinuing branch operations; transfer of functions to principal office.
Sec. 3712.
(1) If a bank or foreign bank permanently discontinues the operations of any branch, foreign bank agency, or foreign bank branch, all functions of the branch, foreign bank agency, or foreign bank branch shall be considered transferable to, and treated as a part of, the principal office of the bank or, in the case of a foreign bank, the principal office in this country.
(2) A bank, out-of-state bank, national bank, or foreign bank shall notify the commissioner in writing before discontinuing operations of a branch, foreign bank agency, or foreign bank branch.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-7 - Part 7 Consolidation and Conversion (487.13701...487.13714) › Section 487.13713 - Principal Office; Relocation.

487.13713 Principal office; relocation.
Sec. 3713.
(1) Upon prior written notice to the commissioner, a bank may change the location of its principal office to any existing branch location of the bank within this state.
(2) Unless the commissioner objects in writing within 60 days after receipt of written notice from the bank of its intent to relocate its principal office, a bank may change the location of its principal office to any other location within this state which is not an existing branch location of the bank. The commissioner may issue a written statement of intent not to object at any time before expiration of the 60 days.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-7 - Part 7 Consolidation and Conversion (487.13701...487.13714) › Section 487.13714 - Branch Office in Foreign Country; Applicable Provisions.

487.13714 Branch office in foreign country; applicable provisions.
Sec. 3714.
Notwithstanding section 1105 of the uniform commercial code, both of the following apply:
(a) A bank which has 1 or more branch offices in a foreign country shall be liable for contracts to be performed and for deposits to be repaid at any branch office in that foreign country to no greater extent than a bank, banking corporation, or other organization or association for banking purposes organized and existing under the laws of the foreign country would be liable under its laws. The laws of the foreign country for the purpose of this section are considered to include all acts, decrees, regulations, and orders promulgated or enforced by a dominant authority asserting governmental, military, or police power of any kind at the place where the branch office is located, whether or not the dominant authority is recognized as a de facto or de jure government.
(b) If by action of a dominant authority that is not recognized by the United States as the de jure government of the foreign territory concerned, any property situated in or any amount to be received in the foreign territory and carried as an asset of a branch office of the bank in the foreign territory is seized, destroyed, or canceled, the liability of the bank for any deposit received and to be repaid by it, and for any contract made and to be performed by it, at any branch office in the foreign territory shall be reduced pro tanto by the proportion that the value, as shown by the books or other records of the bank at the time of the seizure, destruction, or cancellation of the assets bears to the aggregate of all the deposit and contract liabilities of the branch offices of the bank in the foreign territory, as shown at the time by the books or other records of the bank.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-8 - Part 8 Capital (487.13801...487.13808) › Section 487.13801 - Issuance of Capital Notes, Debentures, or Other Instrument of Indebtedness.

487.13801 Issuance of capital notes, debentures, or other instrument of indebtedness.
Sec. 3801.
(1) A bank, with the approval of shareholders owning 2/3 of the stock of the bank entitled to vote, may issue capital notes, debentures, and any other instrument of indebtedness, with or without warrants for preferred or common stock, convertible and nonconvertible, subordinated on insolvency, liquidation, or dissolution to all obligations except obligations to shareholders, in amounts and under terms and conditions approved by the commissioner on the basis of normal business considerations.
(2) In connection with the issuance of convertible capital notes, debentures, or any other instrument of indebtedness, the commissioner may grant approval for the bank to reserve a number of authorized and unissued shares of capital stock as shall be required for issuance in exchange for capital notes and debentures with respect to which conversion privileges exist. If capital notes, debentures, or any other instruments of indebtedness are converted into shares of common or preferred stock, a verified certificate executed by the president of the bank stating the amount of the conversion, and other information with respect to the conversion as the commissioner may require, shall be filed in the office of the commissioner.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-8 - Part 8 Capital (487.13801...487.13808) › Section 487.13802 - Issuance of Shares; Number; Classes; Designations.

487.13802 Issuance of shares; number; classes; designations.
Sec. 3802.
(1) A bank may issue the number of shares authorized in its articles of incorporation. The shares may be all of 1 class or may be divided into 2 or more classes. Each class shall consist of shares having the designations and relative voting, distribution, dividend, liquidation, and other rights, preferences, and limitations, consistent with this act as stated in the articles of incorporation of the issuing bank.
(2) If the shares are divided into 2 or more classes, the shares of each class shall be designated in a manner to distinguish them from the shares of other classes.
(3) Subject to the designations, relative rights, preferences, and limitations applicable to separate series, each share shall be equal to every other share of the same class.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-8 - Part 8 Capital (487.13801...487.13808) › Section 487.13804 - Capital Stock; Increase.

487.13804 Capital stock; increase.
Sec. 3804.
(1) By a vote of shareholders owning 2/3 of each class of the stock entitled to vote, a bank may amend its articles to increase its capital stock to any sum approved by the commissioner, either by an increase in the par value of authorized stock or by the authorization of new stock.
(2) An increase in capital shall not be valid until the whole amount of the increase has been paid in, notice of the payment signed by an officer of the bank has been transmitted to the commissioner, and the commissioner's certificate of approval has been obtained specifying the amount of the increase in capital and that it has been duly paid in as a part of the capital of the bank. The certificate shall be conclusive evidence that the stock has been duly and validly issued.
(3) In the case of the issuance of new stock, in voting upon the increase of capital stock, 2/3 of the shareholders entitled to vote shall have power to fix the value of, and the price at which the stock shall be subscribed and paid for by the shareholders, but not less than par, as well as the time and manner of the subscription and payment, and to authorize the directors to sell the stock.
(4) Notwithstanding this section, a bank, with the approval of the commissioner and by a vote of shareholders owning 2/3 of each class of the stock entitled to vote, for the stated purpose of providing stock options for 1 or more employees, may increase its capital stock in an aggregate par value amount not to exceed at any 1 time 5% of the par value of its then outstanding common stock. The additional stock, when duly authorized, may be issued by the bank from time to time for this purpose but for no other purpose, as options are exercised and payment for the stock is received, free from any preemptive rights to subscribe for stock.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-8 - Part 8 Capital (487.13801...487.13808) › Section 487.13805 - Capital Stock; Reduction.

487.13805 Capital stock; reduction.
Sec. 3805.
(1) By a vote of shareholders owning 2/3 of the bank's stock entitled to vote, a bank may reduce its capital stock. The reduction may be accomplished by a reduction in the par value of the existing stock or by a reduction in the number of the shares of stock. A reduction shall not be made until the amount of the proposed reduction has been approved by the commissioner.
(2) The approval of the commissioner shall be based upon a finding that the security of existing creditors of the bank will not be impaired by the proposed reduction. This section does not discharge any bank from any obligation that may be due from the bank.
(3) Retirement of preferred stock in accordance with the articles of incorporation is not considered to be a reduction of capital under this section.
(4) A shareholder shall not be entitled to any distribution of cash or other assets by reason of any reduction of the common capital of any bank unless the distribution has been approved by the commissioner and by the affirmative vote of at least 2/3 of the shares of each class of stock outstanding, voting as classes.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-8 - Part 8 Capital (487.13801...487.13808) › Section 487.13806 - Dividends.

487.13806 Dividends.
Sec. 3806.
(1) From time to time, the board of directors of a bank may declare and pay dividends on the common stock of the bank consistent with this section.
(2) A cash dividend or dividend in kind shall not be declared or paid unless the bank will have a surplus amounting to not less than 20% of its capital after the payment of the dividend.
(3) A cash dividend or dividend in kind shall not be declared by a bank except out of net income then on hand after deducting its losses and bad debts. Unless the debts due the bank on which interest is past due and unpaid for a period of 6 months are well secured and in process of collection or the debts constitute claims against solvent estates in probate, all debts shall be considered bad debts within the meaning of this section.
(4) A cash dividend or dividend in kind shall not be declared or paid until the cumulative dividends on preferred stock, if any, have been paid in full. By their unanimous vote, the preferred shareholders may waive their right to any amount of the accumulated but unpaid dividends.
(5) If at any time the surplus of a bank is less than the amount of its capital, before the declaration of a cash dividend or dividend in kind, it shall transfer to surplus not less than 10% of its net income of the preceding 6 months in the case of quarterly or semiannual dividends, or not less than 10% of its net income of the preceding 2 consecutive 6-month periods in the case of annual dividends. For the purpose of this section, any amounts transferred to a fund for the retirement of any preferred stock of the bank out of its net income for the periods are considered to be additions to its surplus, if, upon the retirement of the preferred stock, the amounts credited into the retirement fund may then properly be carried to surplus. In this case, the bank shall be obligated to credit to surplus the amounts transferred into the retirement fund on account of the preferred stock as the stock is retired.
(6) Without regard to the limitations of this section and section 3804, a bank, with the approval of the commissioner, and by vote of shareholders owning 2/3 of the stock entitled to vote, may amend its articles to increase its capital stock by declaration of a stock dividend on the capital stock. After the increase, the surplus of the bank shall be at least equal to 20% of the capital stock as increased.
(7) A bank may pay dividends on its preferred stock at the applicable rate without regard to subsections (1) through (6).
(8) Dividends paid to shareholders under a dividend reinvestment plan shall be subject to this act relative to payment of dividends.
(9) A dividend shall not be paid from capital or surplus of the bank.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-8 - Part 8 Capital (487.13801...487.13808) › Section 487.13807 - Deficiency; Steps to Make Assessment or Dissolution; Extension.

487.13807 Deficiency; steps to make assessment or dissolution; extension.
Sec. 3807.
(1) If, in the opinion of the commissioner, the capital of a bank has become impaired, the commissioner shall notify the bank of his or her determination and require the directors to meet the deficiency in the capital within a 2-month period. The directors shall meet the deficiency by either making a pro rata assessment upon the stock held by each shareholder, or taking steps to dissolve the bank. The 2-month period may be extended by order of the commissioner, if in his or her discretion an extension is necessary to allow the directors to meet the deficiency.
(2) Before an assessment may be made by the directors, each shareholder, secured party, and pledgee indicated on the books of the bank as holding an interest in the stock shall be provided with written notice in a manner reasonably calculated to give actual notice of the determination made by the commissioner that the capital of the bank is impaired and the amount of the assessment that each shareholder must pay.
(3) If a shareholder refuses or neglects to pay an assessment levied by the directors within 30 days from the date notice was provided, the directors shall sell all or part of the shareholder's shares to the highest bidder in a manner provided in section 3808. Upon expiration of the 30-day period and refusal or neglect by a shareholder to pay the assessment, a security interest in favor of the bank in the amount of the assessment shall attach to all of the shareholder's shares for the sole purpose of satisfying the assessment levied. The security interest shall have priority over any other security interests perfected by a creditor or otherwise granted by the shareholder in shares issued after the effective date of this act.
(4) If the directors fail to restore the capital of the bank or take steps to dissolve the bank during the 2-month period following notice from the commissioner and any extension granted under subsection (1), the commissioner may appoint a receiver for the bank in accordance with this act.
(5) If any part of the capital of a bank consists of preferred stock, the determination of whether the capital of the bank is impaired and the amount of the impairment shall be based upon the par value of its stock even though the amount that the holders of the preferred stock shall be entitled to receive in the event of retirement or dissolution shall be in excess of the par value of the preferred stock.
(6) The holders of preferred stock shall not be liable for assessments to restore impairment in the capital of a bank.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-8 - Part 8 Capital (487.13801...487.13808) › Section 487.13808 - Distribution of Sale Proceeds; Issuance of New Certificates; Effect of Uniform Commercial Code.

487.13808 Distribution of sale proceeds; issuance of new certificates; effect of uniform commercial code.
Sec. 3808.
(1) If, 30 days after notice as provided in section 3807, a shareholder has refused or neglected to pay an assessment levied on the shares held by the shareholder, the directors may sell any or all of the shareholder's shares to satisfy the assessment. The proceeds of the sale shall be distributed in the following order:
(a) The reasonable expenses of holding for sale and selling the stock in a manner not prohibited by law, including reasonable attorney fees and legal expenses incurred by the bank.
(b) The satisfaction of the assessment levied by the directors.
(c) The satisfaction of an indebtedness secured by any security interest in the stock if written notification demanding proceeds is received by the bank before distribution of the proceeds is completed. Unless the holder of a security interest provides reasonable proof of the interest, the bank does not have to comply with this subdivision.
(d) Any remaining surplus shall be distributed to the shareholder.
(2) Disposition of the stock may be at a public or private sale at any time and on any terms, but every aspect of the disposition including the method, manner, time, place, and terms shall be commercially reasonable and reasonably calculated to meet the deficiency.
(3) A sale of stock as provided in this section shall effect an absolute cancellation of any outstanding certificates evidencing the stock sold and any security interest granted or pledge made in stock issued after the effective date of this act. Upon full payment of the stock sold, the bank shall issue new certificates to the purchaser.
(4) The purchaser takes the stock free of any rights or interests the shareholder may have based on an unintentional failure by the bank to comply with this section or section 3807 if all of the following apply:
(a) The purchaser has no knowledge of any defect in the proceedings.
(b) The purchaser does not act in collusion with any shareholders of the bank, a secured party, other bidders, or the bank.
(c) The purchaser makes the purchase in good faith.
(5) The ability of a bank to make an assessment under section 3807 or to sell the stock of a shareholder under this section is not limited by the uniform commercial code.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-9 - Part 9 Administration (487.13901...487.13913) › Section 487.13901 - Repayment of Deposits.

487.13901 Repayment of deposits.
Sec. 3901.
Deposits shall be repaid to the depositor, or the depositor's lawful representatives, according to the terms of the agreement between the depositor and the bank.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-9 - Part 9 Administration (487.13901...487.13913) › Section 487.13902 - Compliance Review Committee.

487.13902 Compliance review committee.
Sec. 3902.
(1) An officer or the board of directors of a bank may appoint a compliance review committee to evaluate loan underwriting standards, asset quality, financial reporting to federal or state regulatory agencies, compliance with the bank's policies, compliance with federal or state statutory or regulatory requirements, or other related matters.
(2) Any documents, data, compilations, analyses, or other information and material gathered, generated, created, produced, developed, or prepared by or for a compliance review committee by 1 or more employees of the bank or by 1 or more other persons retained by the bank to assist the compliance review committee in performing its functions shall be considered compliance review material.
(3) A document, compilation, analysis, or item of information, data, or material remains compliance review material under this section even if it is delivered or disclosed to employees of the bank who are not members of the compliance review committee or to attorneys, accountants, auditors, consultants, or other professional advisers retained by the bank or to 1 or more other persons retained by the bank to assist the committee in performing its functions or to evaluate the committee.
(4) Except as provided in subsection (5), compliance review material is confidential and is not discoverable or admissible in evidence in any civil action.
(5) Subsection (4) does not apply to any information required by statute or regulation to be maintained by or provided to a governmental entity to the extent that law requires the governmental entity to disclose the information for discovery or admission into evidence.
History:
1999, Act 276, Eff. Mar. 1, 2000
2023 Michigan Compiled Laws › Chapter 487 - Financial Institutions › Act 276 of 1999 - Banking Code of 1999 (487.11101 - 487.15105) › 276-1999-3 - Chapter 3 Bank Organization and Structure (487.13101...487.13913) › 276-1999-3-9 - Part 9 Administration (487.13901...487.13913) › Section 487.13903 - Surety Bond.

487.13903 Surety bond.
Sec. 3903.
(1) The board of directors shall require every employee involved in the handling of money, accounts, or securities of the bank to be bonded by a surety company authorized to do business in this state in an amount determined by the board. The bank shall pay for any surety bonds required of its employees.
(2) Every bank shall maintain a financial institution bond sufficient to protect against loss. If a bank refuses to comply with this requirement, the commissioner may contract for the bond and charge the cost to the bank. If the charge is not paid, the commissioner may collect the charge in an action instituted by the attorney general.
History:
1999, Act 276, Eff. Mar. 1, 2000