Mississippi Administrative Code › Title 5 - Banking and Consumer Finance › Part 1 - Banking Activities › Chapter 2 - Regulation 2: Bank Parity › Rule 5-1-2.1 - Purpose - Bank Parity

Current through June 25, 2024
This regulation amended Regulation 2 and entitles state
				  chartered banks, state chartered savings and loan associations, and state
				  chartered savings banks the same privileges as federally chartered depository
				  institutions. The intent of Regulation 2 is to clarify the rights, powers,
				  privileges, immunities, duties and obligations of a national bank that may be
				  enjoyed by state chartered banks. The adoption of such regulation in no way
				  restricts or modifies the rights, powers, privileges, or immunities otherwise
				  possessed or enjoyed by state-chartered banks.
The parity covers various areas of corporate governance, as
				  well as operational activities of state chartered banks. A state chartered
				  institution with documented data, can request parity with their federal
				  counterpart which operates within the state. The submission of proof and
				  request for parity must be done prior to beginning the activity. The
				  Commissioner will determine whether to approve the request.
The list below details the numerous activities for which a
				  state chartered institution may request parity. These items were included in
				  the previous amendment to Regulation 2 and parity for these items may be
				  requested with the most recent amendment. Any activity, allowed by a federal
				  regulator, not listed must be documented and submitted for approval.
1. Corporate Governance
a. Branching - A state chartered bank, before
				establishing a branch bank, must obtain prior approval of the Commissioner,
				Department of Banking and Consumer Finance upon satisfactory demonstration of
				public convenience and necessity; automated teller machines (ATMs) are deemed
				to be branch banks; and state chartered branch banks may be established without
				regard to any population restriction or territorial restriction and may be
				established outside municipalities or in unincorporated areas. Source: 12 U.S.
				C. § 36, 12 C. F. R. § 5.30 and Department of Banking and Consumer
				Finance v. Clarke, 809 F. 2d 266, cert denied, 483 U. S. 1010
b. Directors' Qualifying Shares - A
				state-chartered bank, with prior approval from the Commissioner, Department of
				Banking and Consumer Finance, shall have authority to exchange directors'
				qualifying shares of stock of a bank and to substitute in lieu thereof a like
				amount of qualifying shares of a holding company, with the holding company
				stock to be considered as directors' qualifying shares as set forth under the
				provisions of Miss. Code Ann. §
										81-5-45.
				Source: 12 U.S.C. § 72 and 12 C.F.R. § 7.4210
c. Extensions of Credit to Directors,
				Executive Officers and Principal Shareholders -A state-chartered bank shall
				have authority to extend lines of credit to directors, executive officers, and
				principal shareholders in accordance with 12 U.S.C. § 375b(4) and §
				215.4 of Regulation O. Source: 12 U.S.C § 84, 12 U.S.C. § 375b(4), 12
				C.F.R. § 215.
d.
				Indemnification of Directors, Officers, Employees, and Agents - A
				state-chartered bank, with prior approval from the Commissioner, Department of
				Banking and Consumer Finance, shall have authority to amend its Articles of
				Incorporation to provide for the indemnification of its directors, officers,
				employees, and agents against liabilities and expenses incurred by them in
				their official capacities and for the payment of premiums for insurance
				insuring the liability of its directors, officers, employees and agents.
				Source: 12 C.F.R. § 7.5217