2023 Oklahoma Statutes › Title 71. Securities › §71-1-308. Investment certificate issuers - Registration requirements.

A. In addition to all other applicable registration provisions specified in this act, investment certificate issuers are subject to the provisions of this section. As used in this section:
1. "Investment certificate" means thrift certificates, certificates of deposit, savings obligations and similar certificates or obligations issued and sold by an investment certificate issuer as defined in paragraph 2 of this subsection; and
2. "Investment certificate issuer" means any financial institution or person, other than a federally or state chartered bank, bank holding company, trust company or savings and loan association, or any credit union, which accepts investor funds or deposits in exchange for the issuance of investment certificates; provided, however, the term "investment certificate issuer" shall not include a financial institution or person which, as of November 1, 1985, issued only the following securities:
a.
investment certificates exempt under the provisions of Sections 1-201 through 1-203 of this title,
b.
investment certificates registered by coordination under Section 1-303 of this title, or
c.
any other security as to which the Administrator, by rule or order, finds that registration is not necessary or appropriate for the protection of investors.
Nothing contained in this act shall be construed as precluding an investment certificate issuer from qualifying for and relying upon any of the exemptions from the provisions of Sections 1-301 and 1-504 of this title as contained in Sections 1-201 through 1-203 of this title.
B. In addition to other powers conferred by this act, the Administrator shall have power to require an investment certificate issuer to:
1. Cause its books and records to be made available at its offices and to provide to the Department a trial balance within five (5) days of the commencement of any examination. The books and records shall be audited at least once each year by an independent certified public accountant in accordance with generally accepted auditing standards, and the report thereof, including financial statements prepared in accordance with generally accepted accounting principles, furnished to the Administrator in such form as he or she may require;
2. Observe methods and standards, including classification standards of loans, which the Administrator may prescribe by rule adopted and promulgated pursuant to the Administrative Procedures Act for determining the value of various types of assets;
3. Maintain its accounting systems and procedures in accordance with such regulations as adopted and promulgated by the Administrator pursuant to the Administrative Procedures Act; provided, the accounting system required shall have due regard to the size of the investment certificate issuer;
4. Charge off the whole or any part of an asset, the value of which, at the time of the Administrator's action, has deteriorated for reasons set forth by the Administrator by rule adopted and promulgated pursuant to the Administrative Procedures Act; and
5. Write down an asset to market value as prescribed by the Administrator by rule adopted and promulgated pursuant to the Administrative Procedures Act.
C. Every investment certificate issuer shall obtain from the Administrator a written acknowledgment, issued in accordance with procedures adopted and promulgated pursuant to the Administrative Procedures Act, that the investment certificate issuer engages in the business of accepting investor funds or deposits in exchange for the issuance of investment certificates. Any investment certificate issuer who obtains such an acknowledgment shall be subject to this section and shall possess all the rights, powers and privileges and shall be subject to all of the duties, restrictions and limitations contained herein. No company or person who fails to obtain such acknowledgment within ninety (90) days of the effective date of the adoption by the Administrator of procedures governing the issuance of a written acknowledgment shall possess or exercise, unless expressly given and possessed or exercised under other laws, any of the benefits, rights, powers or privileges which are herein conferred on investment certificate issuers. Any company or person who fails to obtain a written acknowledgment as described herein may not engage in the business of issuing investment certificates.
D. Any officer, director or employee of an investment certificate issuer found by the Administrator to be dishonest, reckless, unfit to participate in the conduct of the affairs of the institution, or practicing a continuing disregard or violation of laws, rules, regulations or orders which are likely to cause substantial loss to the company or likely to seriously weaken the condition of the company shall be removed immediately from office by the board of directors of the investment certificate issuer of which he or she is an officer, director or employee, on the written order of the Administrator; provided, that the investment certificate issuer or officer, employee, or director may within ten (10) days file a notice of protest for the removal with the Commission, and as soon as possible thereafter, the Commission will review the order of the Administrator and make findings as it deems proper, and that, pending said time, the officer, employee or director shall not perform any of the duties of his office.
E. An investment certificate issuer shall not, without the consent of the Administrator:
1. Make a loan to any of its stockholders owning twenty-five percent (25%) or more of the stock of the investment certificate issuer, or its officers or directors;
2. Make a loan to any employee in excess of Ten Thousand Dollars ($10,000.00); or
3. Make a loan to or other investment in or purchase any asset from any company in which any of its officers, directors or stockholders may have any direct or indirect interest, unless made in an arm's length transaction.
F. An investment certificate issuer shall not, without the consent of the Administrator:
1. Lend money in excess of ten percent (10%) of its shareholders' equity to any person, association, partnership or corporation liable for such obligations; provided, however, that this limitation does not apply to the purchase of investment securities; or
2. Engage in, or acquire any interest in, any business prohibited to a bank chartered under the laws of this state.
G. The shareholders' equity of an investment certificate issuer shall not be less than ten percent (10%) of the investment certificates outstanding. Provided, an investment certificate issuer lawfully incorporated and operating in this state on or before November 1, 1985, with less than the above specified shareholders' equity shall, at the beginning of each fiscal year thereafter, increase its shareholders' equity by a minimum of one-fourth (1/4) the difference between its shareholders' equity on November 1, 1985, and the above specified amount until such time as its shareholders' equity equals or exceeds the amount specified above. For purposes of computing the shareholders' equity, the reserve against bad debts shall be included.
H. Every investment certificate issuer shall maintain a reserve against bad debts in an amount required by the Administrator by rule adopted and promulgated pursuant to the Administrative Procedures Act, but in no event shall the reserve against bad debts be less than two percent (2%) of total loans outstanding.
I. If the Administrator finds the capital of an investment certificate issuer to be impaired according to the standard set forth in subsection G of this section, the Administrator may:
1. Give notice of the impairment to the directors and shareholders of the investment certificate issuer and levy an assessment in a designated amount upon the holders of record of the investment certificate issuer's stock to remedy an impairment of capital. Upon receipt of an order to levy an assessment, the directors shall cause to be sent to all holders of stock, at their addresses as listed on the books of the investment certificate issuer, a notice of the amount of the assessment and a copy of this subsection. If an assessment is not paid within ninety (90) days after the order is mailed, the Administrator, at his or her discretion, may offer the shares of the defaulting stockholders for sale at public auction at a price which shall not be less than the amount of the assessment and the cost of the sale; or
2. Apply to the district court of any county where the assets of the investment certificate issuer are located for an order appointing a conservator of, and directing him to rehabilitate, the investment certificate issuer. If all reasonable efforts to rehabilitate the investment certificate issuer fail, the Administrator may apply to the court for an order directing the appointment of a liquidator to dissolve any such issuer and liquidate its assets. All rights and interests of the stockholders in the stock, property and assets of such investment certificate issuer are thereby terminated except the rights of stockholders to the proceeds of liquidation, if any, after all other valid claims, including interest, against the assets of the investment certificate issuer and the proceeds of liquidation have been satisfied. The conservator or liquidator appointed under this subsection shall meet qualifications established by the Administrator by rule adopted and promulgated pursuant to the Administrative Procedures Act.
J. Whenever the capital or reserve of any investment certificate issuer shall be impaired according to the standards set forth in subsections G and H of this section, the investment certificate issuer shall make no new loans, renew any investment certificates or sell new investment certificates without the consent of the Administrator.
K. 1. It shall be unlawful for any investment certificate issuer to issue investment certificates when insolvent.
2. Every officer, director, principal stockholder, or every other person who materially participates or aids in the issuance of an investment certificate in violation of this subsection, or who directly or indirectly controls any such person, shall be jointly and severally liable, unless the officer, director, principal stockholder, or any other person who so participates, aids or controls, sustains the burden of proof that the person did not know, and could not have known, of the existence of the facts by reason of which liability is alleged to exist. There shall be contribution as in cases of contract among the persons so liable.
3. The rights and remedies provided for in this subsection are in addition to any other rights or remedies provided for in Title 71 of the Oklahoma Statutes, or that may exist at law or in equity.
L. The Administrator may as often as he or she deems it prudent and necessary for the protection of the public, make or cause to be made examinations of the books, records, papers, assets and liabilities of every kind and character owned by, or relating to, every investment certificate issuer.
M. Every investment certificate issuer shall make and file with the Administrator reports at such times and in such form as the Administrator may prescribe by rule or order. The reports shall be verified by the oath of either the president, the vice-president, or the secretary and attested by the signature of two or more of the directors. Each report shall exhibit in detail, as may be required by the Administrator, the resources and liabilities of the investment certificate issuer at the close of business on the day to be specified by the Administrator.
N. Every investment certificate issuer whose investor funds or deposits are not insured by an agency of the government shall disclose on the face of each investment certificate in ten-point type the following:
"This certificate is not insured by the Federal Deposit Insurance Corporation or any other agency of the government."
Added by Laws 2003, c. 347, § 17, eff. July 1, 2004. Amended by Laws 2022, c. 77, § 19, eff. Nov. 1, 2022.