2023 Rhode Island General Laws › Title 19 - Financial Institutions › Chapter 19-7 - Interstate Banking, Interstate Branching and Bank Holding Company Mergers and Acquisitions › Section 19-7-6. - Interstate purchases of assets and assumptions of liabilities.

§ 19-7-6. Interstate purchases of assets and assumptions of liabilities.
(a)
In addition to any other power granted under the laws of this state, a financial institution may, with the approval of the director, or the director’s designee, purchase all or part of the assets of, and assume all or part of the liabilities of, an out-of-state bank and operate any office or branch of the out-of-state bank acquired in connection with the out-of-state bank.
(b)
An out-of-state bank may, with the approval of the director, or the director’s designee, purchase substantially all of the assets and assume substantially all of the liabilities of a financial institution and operate any office or branch of the bank acquired in connection therewith; provided, however, that the law of the state in which the out-of-state bank has its principal office:
(1)
Permits such a purchase of assets, assumption of liabilities, and operation of offices and branches; and
(2)
Authorizes, under conditions not substantially more restrictive than those imposed by the laws of this state, as determined by the director, or the director’s designee, a financial institution to purchase assets, assume liabilities, and operate offices and branches in another state. No out-of-state bank shall apply to the director, or the director’s designee, for approval of such a purchase, assumption, and operation unless the purchase, assumption, and operation shall first be approved as follows:
(i)
With respect to financial institutions having capital stock, by the board of directors and shareholders pursuant to the applicable provisions of § 7-1.2-1102, except that the purchase, assumption, and operation must receive the affirmative vote of two-thirds (⅔) or more of the shareholders entitled to vote thereon;
(ii)
With respect to a mutual savings bank organized under this title, by a two thirds (⅔) vote of the board of trustees thereof and a majority vote of the depositors of the mutual savings bank present in person or by proxy, at a meeting called by the board of trustees; and
(iii)
With respect to each such bank not organized under the laws of this state, in accordance with the applicable provisions imposed by the laws under which it is organized.
(c)
Upon the filing of an application to purchase assets and assume liabilities under this section, together with duplicate originals of the agreement of purchase and assumption entered into in connection therewith, the director, or the director’s designee, shall furnish the applicant a form of notice specifying the names of the purchasing financial institution and the selling financial institution and the location of the offices or branches to be acquired and assigning a date and place for public hearing on the application. The applicant shall publish the notice at least once a week, for three (3) successive weeks, in one or more newspapers designated by the director, or the director’s designee. Upon a finding that the public interest so requires, the director, or the director’s designee, may lessen the period and the manner prescribed for giving notice.
In determining whether to approve the application, the director, or the director’s designee, shall consider whether the purchase, assumption, and operation is consistent with the safety and soundness of, and the convenience and advantage of the communities served by, each financial institution that is a party to the agreement. The procedures for conducting hearings by the director, or the director’s designee, and the rights of appeal from decisions of the director, or the director’s designee, shall be governed by the applicable provisions of this title. If the director, or the director’s designee, approves the application, he or she shall endorse his or her approval upon each original of the agreement of purchase and assumption and shall deliver the agreement to the applicant. One original of the agreement bearing the director’s, or the director’s designee’s, approval in writing shall be filed with the director, or the director’s designee, and the other shall be retained by the applicant as evidence of the approval. The applicant shall cause notice of any abandonment of a transaction approved pursuant to this subsection to be filed with the director, or the director’s designee, and in the event of such abandonment, any approval granted hereunder shall be null and void.
(d)
A shareholder of a selling financial institution shall have the right to dissent from the corporate action involved in accordance with the provisions of § 7-1.2-1201 and on the terms and conditions set forth in § 7-1.2-1202. No shareholder or depositor of a financial institution without capital stock that is a party to an agreement of purchase and assumption shall have any appraisal or dissenting right with respect to this corporate action.
(e)
An out-of-state bank that is to be the purchasing bank shall file the following with the director, or the director’s designee, contemporaneously with the filing of any application for approval under this section:
(1)
An agreement that it may be served with process in this state in any proceeding for the enforcement of any obligation arising out of its business transacted in this state and any obligation assumed by it; and
(2)
An irrevocable appointment of the director as its agent to accept service of process in any proceeding in the courts of this state or the courts of the United States situated in this state.
(f)
The offices or branches acquired pursuant to an agreement of purchase and assumption approved by the director, or the director’s designee, may be operated as branch offices of the purchasing bank with the written permission of, and under conditions, if any, approved by the director, or the director’s designee, whether or not the branch offices shall be in more than one state.
History of Section.
P.L. 1995, ch. 82, § 45; P.L. 1997, ch. 98, § 6; P.L. 2005, ch. 36, § 17; P.L. 2005, ch. 72, § 17.