H*3852 Session 112 (1997-1998)
H*3852(Rat #0172, Act #0090 of 1997) General Bill, By Wilkins, Allison, Altman,
Barfield, Barrett, Cato, Chellis, Cooper, Davenport, Easterday, Fleming,
Hamilton, Harrison, Haskins, Hinson, Jennings, Leach, Littlejohn, Loftis, Mason,
Meacham, Robinson, Sandifer, Sharpe, Simrill, Stuart, Tripp, Trotter, Walker,
Whatley and Woodrum
A BILL TO AMEND TITLE 34, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO
BANKING, FINANCIAL INSTITUTIONS, AND MONEY SECURITIES, BY ADDING CHAPTER 30 SO
AS TO AUTHORIZE THE CREATION OF A STATE SAVINGS BANK IN SOUTH CAROLINA; TO
PROVIDE FOR ORGANIZATION OF, APPLICATION FOR AND APPROVAL OF, CORPORATE
ADMINISTRATION OF, AND OPERATION OF A MUTUAL OR A STOCK STATE SAVINGS BANK; TO
PROVIDE FOR CONVERSION OF A STATE SAVINGS BANK TO A FEDERAL BANK OR
ASSOCIATION OR FROM A MUTUAL TO A STOCK SAVINGS BANK, OR FOR CONVERSION OF
ANOTHER BANK OR ASSOCIATION TO A STATE SAVINGS BANK; TO PROVIDE FOR THE MERGER
OF A STATE SAVINGS BANK WITH ANOTHER BANK OR ASSOCIATION; TO PROVIDE FOR
VOLUNTARY DISSOLUTION; TO PROVIDE FOR REGULATION, SUPERVISION,
CONSERVATORSHIP, AND RECEIVERSHIP BY THE STATE BOARD OF FINANCIAL
INSTITUTIONS; TO PROVIDE FOR PROHIBITED PRACTICES AND PENALTIES FOR
PARTICIPATION IN PROHIBITED PRACTICES; AND TO PROVIDE FOR LENDING AUTHORITY
AND PROCEDURES.
04/09/97 House Introduced and read first time HJ-22
04/09/97 House Referred to Committee on Labor, Commerce and
Industry HJ-23
05/01/97 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-3
05/07/97 House Amended HJ-67
05/07/97 House Read second time HJ-67
05/08/97 House Read third time and sent to Senate HJ-12
05/13/97 Senate Introduced, read first time, placed on calendar
without reference SJ-14
05/14/97 Senate Read second time SJ-18
05/14/97 Senate Ordered to third reading with notice of
amendments SJ-18
05/15/97 Senate Read third time and enrolled SJ-13
06/04/97 Ratified R 172
06/10/97 Signed By Governor
06/10/97 Effective date 06/10/97
06/24/97 Copies available
06/24/97 Act No. 90
(A90, R172, H3852)
AN ACT TO AMEND TITLE 34, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO BANKING, FINANCIAL
INSTITUTIONS, AND MONEY SECURITIES, BY ADDING
CHAPTER 30 SO AS TO AUTHORIZE THE CREATION OF A STATE
SAVINGS BANK IN SOUTH CAROLINA; TO PROVIDE FOR
ORGANIZATION OF, APPLICATION FOR AND APPROVAL OF,
CORPORATE ADMINISTRATION OF, AND OPERATION OF A
MUTUAL OR A STOCK STATE SAVINGS BANK; TO PROVIDE
FOR CONVERSION OF A STATE SAVINGS BANK TO A FEDERAL
BANK OR ASSOCIATION OR FROM A MUTUAL TO A STOCK
SAVINGS BANK, OR FOR CONVERSION OF ANOTHER BANK OR
ASSOCIATION TO A STATE SAVINGS BANK; TO PROVIDE FOR
THE MERGER OF A STATE SAVINGS BANK WITH ANOTHER
BANK OR ASSOCIATION; TO PROVIDE FOR VOLUNTARY
DISSOLUTION; TO PROVIDE FOR REGULATION, SUPERVISION,
CONSERVATORSHIP, AND RECEIVERSHIP BY THE STATE
BOARD OF FINANCIAL INSTITUTIONS; TO PROVIDE FOR
PROHIBITED PRACTICES AND PENALTIES FOR PARTICIPATION
IN PROHIBITED PRACTICES; AND TO PROVIDE FOR LENDING
AUTHORITY AND PROCEDURES.
Be it enacted by the General Assembly of the State of South Carolina:
State savings bank created
SECTION 1. Title 34 of the 1976 Code is amended by adding:
"CHAPTER 30
A State Savings Bank Charter in South
Carolina
Article 1
General Provisions
Section 34-30-10. This chapter is known as 'State Savings Bank'.
Section 34-30-20. This chapter, unless the context otherwise specifies,
applies to all state savings banks.
Section 34-30-30. (A) The term 'savings and loan association' when
used in the 1976 Code, other than in Chapter 28, includes state savings
banks chartered under this chapter and Chapter 28.
(B) Unless the context otherwise requires, the following definitions
apply in this chapter:
(1) 'Board' means the State Board of Financial Institutions.
(2) 'Affiliate' means a person or corporation that controls, is
controlled by, or is under common control with a savings institution.
(3) 'Articles of incorporation or charter' means the document that
represents the corporate existence of a state savings bank.
(4) 'Associate' means a person's relationship with:
(a) any corporation or organization, other than the applicant or
a majority-owned subsidiary of the applicant, of which the person is an
officer or partner or is, directly or indirectly, the beneficial owner of ten
percent or more of any class of equity securities;
(b) any trust or other estate in which the person has a substantial
beneficial interest or as to which the person serves as trustee or in a
similar fiduciary capacity; and
(c) a relative or spouse who lives in the same house as that
person or a relative of that person's spouse who lives in the same house as
that person or who is a director or officer of the applicant or any of its
parents or subsidiaries.
(5) 'Association' means a mutual or stock-owned savings
association, savings and loan association, building and loan association,
or savings bank as organized pursuant to Section 34-28-30.
(6) 'Branch office' means an office of a state savings bank, other
than its principal office, that accepts deposits and renders savings
institution services.
(7) 'Capital stock' means securities that represent ownership of a
stock state savings bank.
(8) 'Conflict of interest' means a matter before the board of directors
in which one or more of the directors, officers, or employees has a direct
or indirect financial interest in its outcome.
(9) 'Control' means the power, directly or indirectly, to:
(a) direct the management or polices of a state savings bank or
to vote twenty-five percent or more of a class of voting securities for a
state savings bank;
(b) control the election or appointment of a majority of the
directors of a state savings bank; or
(c) control or exercise a controlling influence over the
management or policies of the state savings bank.
For purposes of this definition of control, references to a state savings
bank include the holding company for the state savings bank.
(10) 'Depository institution' means a person, firm, or corporation
engaged in the business of receiving, soliciting, or accepting money or its
equivalent on deposit, or of lending money or its equivalent, or of both.
(11) 'Disinterested directors' means those directors who have
absolutely no direct or indirect financial interest in the matter before them.
(12) 'Dividends on stock' means the earnings of a state savings bank
paid out to holders of capital stock in a stock state savings bank.
(13) 'Examination and investigation' means a supervisory inspection
of a state savings bank or proposed state savings bank that may include
inspection of every relevant piece of information including subsidiary or
affiliated businesses.
(14) 'Immediate family' means one's spouse, father, mother, children,
brothers, sisters, and grandchildren; and the father, mother, brothers, and
sisters of one's spouse; and the spouse of one's child, brother, or sister.
(15) 'Insurance of deposit accounts' means insurance on a state
savings bank's deposit accounts when the beneficiary is the holder of the
insured account.
(16) 'Loan production office' means an office of a state savings bank
other than the principal or branch offices whose activities are limited to
the generation of loans.
(17) 'Members' means deposit account holders and borrowers in a
state mutual savings bank.
(18) 'Mutual savings bank' means a state savings bank organized in
mutual form under this chapter.
(19) 'Mutual holding company' means a holding company for a
mutual savings bank.
(20) 'Net worth' means a state savings bank's total assets less total
liabilities as defined by generally accepted accounting principles.
(21) 'Original incorporators' means one or more natural persons who
are the organizers of a state savings bank responsible for the business of
a proposed state savings bank from the filing of the application to the
board's final decision on the application.
(22) 'Plan of conversion' means a detailed outline of the procedure
for conversion of a savings institution from one to another regulatory
authority, from one to another form of organization, or from one to
another charter.
(23) 'Principal office' means the office that houses the headquarters
of a state savings bank.
(24) 'Registered agent' means the person named in the articles of
incorporation upon whom service of legal process is binding upon the
state savings bank.
(25) 'Savings institution' means either an association or a state
savings bank, or a federal savings association or federal savings bank.
(26) 'Service corporation' means a corporation operating under
Article 7 of this chapter that engages in activities determined by the board
to be incidental to the conduct of a depository institution business as
provided in this chapter, or engages in activities that further or facilitate
the corporate purposes of a state savings bank, or furnishes services to a
state savings bank or subsidiaries of a state savings bank, the voting stock
of which is owned directly or indirectly by one or more savings
institutions.
(27) 'State savings bank' means a depository institution organized
and operated under this chapter or a corporation organized under federal
law and converted so as to be operated under this chapter.
(28) 'Stock savings bank' means a state savings bank owned by
holders of capital stock and organized under this chapter.
(29) 'Voluntary dissolution' means the dissolution and liquidation of
a state savings bank initiated by its ownership.
Article 2
Incorporation and Organization
Section 34-30-50. When not in direct conflict with or superseded by
specific provisions of this chapter, the provisions of the South Carolina
Business Corporation Act, Chapters 1 to 25 of Title 33, apply to a state
savings bank organized or operated under this chapter.
Section 34-30-60. (A) Nothing in this chapter invalidates a charter
that was valid before the enactment of this chapter. A savings institution
chartered on the effective date of this chapter may continue operation in
accordance with the chapter under which it was chartered. However, after
the date this chapter becomes effective, a depository institution may not
be qualified as a state savings bank except in accordance with this chapter.
A state savings bank chartered under this chapter must use the letters
'SSB' in its legal name.
(B) Except as provided in subsection (A) of this section, or in Chapter
28 of Title 34, a person, corporation, company, or state savings bank,
except one incorporated and licensed in accordance with this chapter or
federal law to operate a savings bank, shall not operate as a state savings
bank. Unless authorized as a state or federal savings bank and engaged in
transacting a depository institution business, a person, corporation,
company, or savings bank domiciled and doing business in this State shall
not:
(1) use in its name the term 'savings bank' or words of similar
import or connotation that lead the public reasonably to believe that the
business so conducted is that of a savings bank; or
(2) use a sign or circulate or use any letterhead, billhead, circular,
or paper, or advertise or communicate in a manner that would lead the
public reasonably to believe that it is conducting the business of a savings
bank.
(C) Upon application by the board or by a state savings bank, a court
of competent jurisdiction may issue an injunction to restrain any person
or entity from violating or from continuing to violate subsection (B) of
this section.
Section 34-30-70. (A) The original incorporators, a majority of whom
must be domiciled in this State, may organize and establish a state savings
bank to promote the purposes of this chapter, subject to approval as
provided in this chapter. The original incorporators shall file with the
board a preliminary application to organize a state savings bank in the
form prescribed by the board, together with the proper nonrefundable
application fee.
(B) An application to organize a state savings bank must contain:
(1) a copy of the proposed articles of incorporation, which must be
signed by the original incorporators;
(2) the names and addresses of the incorporators; and the names and
addresses of the initial members of the board of directors, and the number
of shares they plan to subscribe to;
(3) statements of the anticipated receipts, expenditures, earnings,
and financial condition of the state savings bank for its first three years of
operation, or a longer period as the board may require;
(4) a showing satisfactory to the board that:
(a) the public convenience and advantage are served by the
establishment of the proposed state savings bank;
(b) there are reasonable demand and necessity in the community
which is served by the establishment of the proposed state savings bank;
(c) the proposed state savings bank has a reasonable probability
of sustaining profitable and beneficial operations within a reasonable time
in the community in which the proposed state savings bank intends to
locate; and
(5) the proposed bylaws; and
(6) statements, exhibits, maps, and other data that may be
prescribed or requested by the board, and which are sufficiently detailed
and comprehensive so as to enable the board to pass upon the criteria in
this article.
(C) The application must be signed by the original incorporators, and
properly acknowledged by a person duly authorized by this State to take
proof and acknowledgment of deeds. The application must contain
additional information required by the board.
Section 34-30-80. (A) The articles of incorporation of a proposed
mutual state savings bank must include:
(1) the name of the state savings bank, which must not so closely
resemble the name of an existing depository institution doing business
under the laws of this State as to be likely to mislead the public;
(2) the county and city or town where its principal office is located
in this State, and the name of its registered agent and the address of its
registered office, including county and city or town, and street and
number;
(3) the period of duration, which may be perpetual. When the
articles of incorporation fail to state the period of duration, it is considered
perpetual;
(4) the purposes for which the state savings bank is organized,
limited to purposes permitted under the laws of this State for state savings
banks;
(5) the minimum amount on deposit in deposit accounts, not less
than four million dollars, before the commencement of business;
(6) a provision not inconsistent with this chapter and the proper
operation of a state savings bank in which the incorporators provide for
the regulation of the internal affairs of the state savings bank;
(7) the number of directors, not less than five, constituting the
initial board of directors, and the name and address of each person who
is to serve as a director until the first meeting of members, or until a
successor is elected and qualified;
(8) the names and addresses of the incorporators.
(B) The articles of incorporation of a proposed stock state savings
bank must include:
(1) the name of the state savings bank, which must not so closely
resemble the name of an existing depository institution doing business
under the laws of this State as to be likely to mislead the public;
(2) the county and city or town where its principal office is located
in this State, and the name of its registered agent and the address of its
registered office, including county and city or town, and street and
number;
(3) the period of duration, which may be perpetual. When the
articles of incorporation fail to state the period of duration, it is considered
perpetual;
(4) the purposes for which the state savings bank is organized,
limited to purposes permitted under the laws of this State for state savings
bank;
(5) with respect to the shares of stock which the state savings bank
has authority to issue, if the stock is to:
(a) have a par value, the number of shares of stock and the par
value of each;
(b) be without par value, the number of shares of stock; or
(c) be divided into classes, or into series within a class of
preferred or special shares of stock, the articles of incorporation must also
designate each class and each series within a class, and provide a
statement of the preferences, limitations, and relative rights of the stock
of each class or series;
(6) the minimum amount of consideration to be received for its
shares of stock before the commencement of business;
(7) a statement as to whether stockholders have preemptive rights
to acquire additional or treasury shares of the state savings bank;
(8) a provision not inconsistent with this chapter or the proper
operation of a state savings bank, in which the incorporators provide for
the regulation of the internal affairs of the state savings bank;
(9) the number of directors, not less than five, constituting the
initial board of directors, and the name and address of each person who
is to serve as a director until the first meeting of the stockholders, or until
a successor is elected and qualified; and
(10) the names and addresses of the incorporators.
(C) The articles of incorporation may include other provisions
authorized or permitted to be in the articles of incorporation of a
corporation by Chapters 1 to 25 of Title 33.
Section 34-30-90. Upon receipt of an application to organize and
establish a state savings bank, the board shall examine or cause to be
examined all the relevant facts connected with the formation of the
proposed state savings bank.
Section 34-30-100. (A) The board may approve an application to
form a mutual state savings bank only when:
(1) the proposed state savings bank has an operational expense
fund, from which to pay organizational and incorporation expenses, in an
amount determined by the board to be sufficient for the safe and proper
operation of the state savings bank, but not less than four hundred
thousand dollars. The monies remaining in the expense fund must be held
by the state savings bank for at least three years from its date of licensing.
No portion of the fund may be released to an incorporator or director who
contributed to it, to another contributor, or to another person, and no
dividends may be accrued or paid on the funds without the prior approval
of the board;
(2) the proposed state savings bank has pledges for deposit accounts
in an amount determined by the board to be sufficient for the safe and
proper operation of the state savings bank, but not less than four million
dollars;
(3) all deposit accounts of the proposed state savings bank have
been made with legal tender of the United States;
(4) the name of the proposed state savings bank will not mislead the
public and is not the same as an existing depository institution or so
similar to the name of an existing depository institution as to mislead the
public;
(5) the character, general fitness, and responsibility of the
incorporators and the initial board of directors of the proposed state
savings bank, a majority of whom must be residents of South Carolina,
command the confidence of the community in which the proposed state
savings bank locates;
(6) there are reasonable demand and necessity in the community
that which are served by the establishment of the proposed state savings
bank;
(7) the public convenience and advantage are served by the
establishment of the proposed state savings bank; and
(8) the proposed state savings bank has a reasonable probability of
sustaining profitable and beneficial operations in the community.
(B) The board may approve an application to form a stock state
savings bank only when:
(1) the proposed state savings bank has prepared a plan to solicit
subscriptions for capital stock in an amount determined by the board to be
sufficient for the safe and proper operation of the state savings bank, but
not less than four million dollars;
(2) the name of the proposed state savings bank does not mislead
the public and is not the same as an existing depository institution or so
similar to the name of an existing depository institution as to mislead the
public, and contains the wording 'corporation', 'incorporated', 'limited',
'company', or an abbreviation of one of these words or other words
sufficient to distinguish stock savings banks from mutual savings banks;
(3) the character, general fitness, and responsibility of the
incorporators, initial board of directors, and initial stockholders of the
proposed state savings bank command the confidence of the community
in which the proposed state savings bank locates;
(4) all subscriptions for capital stock of the proposed state savings
bank have been purchased with legal tender of the United States;
(5) there are reasonable demand and necessity in the community
which is served by the establishment of the proposed state savings bank;
(6) the public convenience and advantage are served by the
establishment of the proposed state savings bank; and
(7) the proposed state savings bank has a reasonable probability of
sustaining profitable and beneficial operations in the community.
(C) The minimum amount of pledges for deposit accounts or
subscriptions for capital stock may be adjusted if the board determines
that a greater requirement is necessary or that a smaller requirement
provides a sufficient capital base. The board's decision must be based
upon due consideration of:
(1) the population of the proposed trade area;
(2) the total deposits of the depository institutions operating in the
proposed trade area;
(3) the economic conditions of and projections for the proposed
trade area;
(4) the business experience and reputation of the proposed
management;
(5) the business experience and reputation of the proposed
incorporators and directors; and
(6) the projected deposit growth, capitalization, and profitability of
the proposed state savings bank, and other factors considered relevant by
the board.
Section 34-30-110. (A) If the board does not receive a completed
application within one hundred twenty days of the filing of the
preliminary application, the application must be returned to the applicants.
(B) When the board has completed the examination and investigation
of the facts relevant to the establishment of the proposed state savings
bank, the board shall approve or reject an application within one hundred
twenty days of the submission of the completed application.
Section 34-30-120. (A) After consideration of its findings, and the
consideration of other information and evidence, the board shall approve
or disapprove the application. The board shall approve the application if
it finds that the articles of incorporation are in compliance with Section
34-30-90 and that there is compliance with the criteria in Section
34-30-110, the remainder of this chapter, regulations, and the 1976 Code.
The order approving the application may impose reasonable conditions
which must be met before a certificate of authorization to transact
business is issued.
(B) If the board approves the application, the applicant shall file its
articles of incorporation with the Secretary of State.
(C) The corporate existence of a state savings bank begins on the date
the approved articles of incorporation are filed with the Secretary of State,
unless otherwise provided in the articles of incorporation, but the state
savings bank may not commence business before it is in possession of a
certificate of authorization to transact business as provided in Section
34-30-150.
(D) A subscriber to the stock of a proposed stock state savings bank,
other than its holding company, shall not own or control as principal more
than ten percent of a class of voting shares of the state savings bank or its
holding company.
Section 34-30-130. A state savings bank must obtain and maintain
insurance on the deposit accounts of all members and customers from an
insurance corporation created by an act of Congress. Before licensing of
a state savings bank, articles of incorporation duly recorded under Section
34-30-120(C), are sufficient certification to the insuring corporation that
the state savings bank is a legal corporate entity. The insurance must be
obtained within the time limit prescribed in Section 34-30-140. Subject
to the rules or regulations of the board, a state savings bank may obtain
or participate in efforts to obtain insurance of deposits that is in excess of
the amount eligible for federal insurance of accounts. This insurance is
known as 'excess insurance'.
Section 34-30-140. A newly chartered state savings bank must
commence business within one year after corporate existence begins. A
state savings bank that does not commence business within this time,
forfeits its corporate existence, unless the board, before the expiration of
the one-year period, approves an extension of the time within which the
state savings bank may commence business, upon a written request stating
the reasons for the request. Upon forfeiture, the articles of incorporation
expire and action taken in connection with the incorporation and
chartering of the state savings bank, with the exception of fees paid to the
board, becomes null and void. The board shall determine if a state savings
bank has failed to commence business within one year, without extension
as provided in this section, and shall notify the Secretary of State and the
register of mesne conveyances in the county in which the state savings
bank is located that the articles of incorporation have expired. If the board
finds that the state savings bank has in good faith complied with all the
requirements of law and all conditions imposed, and that the state savings
bank's deposit accounts are properly insured, it shall promptly issue a
certificate of authorization to transact a general state savings bank
business.
Section 34-30-150. An amendment to the articles of incorporation of
a state savings bank, which shall have been adopted and recommended by
the board of directors of the state savings bank, must be made at an annual
or special meeting of the state savings bank, held in accordance with
Sections 34-30-1060 and 34-30-1070, by a majority of votes or shares
cast by members or stockholders present in person or by proxy at the
meeting. An amendment must be certified by the appropriate corporate
official, submitted to the board for approval or rejection, and if approved,
then certified by the board and recorded as provided in Section 34-30-130
for articles of incorporation. The articles of incorporation may provide for
a greater quorum or voting requirement for members or stockholders or
voting groups of stockholders than is otherwise provided in this chapter.
Section 34-30-160. (A) The books and records of a state savings
bank must be confidential and may be made available for inspection and
examination only:
(1) to the board or its duly authorized representatives;
(2) to persons duly authorized to act for the state savings bank;
(3) to any federal or state instrumentality or agency authorized to
inspect or examine the books and records of an insured depository
institution;
(4) as compelled by a court of competent jurisdiction;
(5) as compelled by legislative subpoena as provided by law;
(6) as authorized by the board of directors of the state savings bank;
or
(7) as provided in subsections (B), (C), and (D).
(B) A depositor, borrower, or stockholder has the right to inspect the
books and records of a state savings bank as pertain to his loans, his
accounts, or the determination of his voting rights.
(C) The books and records pertaining to the accounts, loans, and
voting rights of depositors, borrowers, and stockholders must be kept
confidential by the state savings bank and its directors, officers, and
employees and may not be released except upon express written
authorization of the account holder as to his own accounts, loans, or
voting rights. However, information relating to a loan made by an
association may be released without the borrower's authorization in a
manner prescribed by the board of directors for the purpose of meeting the
needs of commerce and for fair and accurate credit information.
(D) A member, stockholder, or other person must not have access to
or be furnished or possessed of a partial or complete list of the members
or stockholders except upon express action authorized by the board of
directors.
Section 34-30-170. (A) A state savings bank may apply to the board
for permission to establish a branch office. The application must be in the
form prescribed by the board and accompanied by the proper branch
application fee. The board shall approve or deny branch applications
within one hundred twenty days of filing. Nothing in this chapter
prohibits a state savings bank from establishing a corporate office or
offices upon prior written notification to the board. A corporate office
must be established primarily for the purpose of managing the
administrative functions of the state savings bank and service corporations
and must not accept deposits or issue payment for withdrawals of
certificates or accounts.
(B) The board shall approve a branch application when:
(1) the applicant has evidenced financial responsibility;
(2) the applicant has sufficient net worth as determined by the
board; and
(3) the applicant has an acceptable internal control system that
includes certain basic internal control requirements essential to the
protection of assets and the promotion of operational efficiency regardless
of the size of the applicant.
(C) Upon receipt of a branch application, the board shall examine or
cause to be examined all the relevant facts connected with the
establishment of the proposed branch office. If it appears to the
satisfaction of the board that the applicant has complied with all the
requirements in this section and the regulations for the establishment of
a branch office and that the state savings bank is otherwise lawfully
entitled to establish the branch office, then the board shall approve the
branch application.
Section 34-30-180. The board of directors of a state savings bank
may change the location of a branch office or the principal office of the
state savings bank with the prior written approval of the board. The board
may request, and the state savings bank must provide, information that the
board determines is necessary to evaluate the request.
Section 34-30-190. The board of a state savings bank may
discontinue the operation of a branch office with the prior written
approval of the board.
Section 34-30-200. A state savings bank may open or close a loan
production office upon thirty days' written notice to the board.
Article 3
Corporate Changes
Section 34-30-300. (A) Any association or state or national bank,
upon a majority vote of its board of directors, may apply to the board for
permission to convert to a state savings bank and for certification of
appropriate amendments to its articles of incorporation to effect the
change. Upon receipt of an application to convert to a state savings bank,
the board shall examine all facts connected with the conversion. The
depository institution applying for permission to convert must pay a fee
established by the board.
(B) The converting depository institution must submit a plan of
conversion as a part of the application to the board. The board may
approve it with or without amendment. If the board approves it, the plan
must be submitted to the members or stockholders as provided in
subsection (C) of this section. If the board refuses to approve the plan, the
objections must be stated in writing and the converting depository
institution must be given an opportunity to amend the plan to obviate the
objections.
(C) After lawful notice to the members or stockholders of the
converting depository institution and full and fair disclosure, the
substance of the plan must be approved by the affirmative vote of a
majority of votes or shares present. The vote by the members or
stockholders may be in person or by proxy. The results of the vote as
certified by an appropriate officer of the converting depository institution
must be filed with the board. The board then shall approve or disapprove
the requested conversion to a state savings bank. Upon approval of the
conversion, the board shall supervise and monitor the conversion process
and shall ensure that the conversion is conducted lawfully and under the
approved plan of conversion.
Section 34-30-310. A state savings bank, stock or mutual, organized
and operated under this chapter, may convert to a federal charter in
accordance with the laws and regulations of the United States and with the
same force and effect as though originally incorporated under those laws.
The procedure to effect this conversion is:
(1) Following the favorable majority vote of the board of directors of
the state savings bank, a meeting of the members or stockholders must be
held upon not less than fifteen days' notice to each member or
stockholder. Notice of the meeting may be mailed to each member or
stockholder, postage prepaid, to the last known address, or the board of
directors may cause notice of the meeting to be published, once a week
for two weeks preceding the meeting, in a newspaper of general
circulation in the county where the state savings bank has its principal
office. It is sufficient notice of the purpose of the meeting if the notice
contains substantially the following statement: 'The purpose of this
meeting is to consider the conversion of this state chartered savings bank
to a federal charter, under the laws of the United States'. An appropriate
officer of the state savings bank shall make proof by affidavit at the
meeting of due service of the notice or call for the meeting.
(2) At the meeting of the members or stockholders of the state savings
bank, the members or stockholders, by affirmative vote of a majority of
votes or shares present, in person or by proxy, may resolve to convert the
state savings bank to a federal charter. A copy of the minutes of the
meeting of the members or stockholders, as certified by an appropriate
officer of the state savings bank, must be filed in the office of the board
within ten days after the date of the meeting. The filed certified copy is
prima facie evidence of the holding and the action of the meeting.
(3) Within a reasonable time after the receipt of a certified copy of the
minutes, the board shall issue a certificate of approval of the conversion.
The state savings bank must record the certificate in the office of the
Secretary of State.
(4) The state savings bank must file an application, in the manner
prescribed or authorized by the laws and regulation of the United States,
to consummate the conversion to a federal charter. A copy of the charter
or authorization issued to the state savings bank by the appropriate federal
regulatory authority must be filed with the board. Upon filing with the
board, the state savings bank ceases to be a state savings bank and
becomes a federal depository institution.
(5) When a state savings bank converts to a federal charter it ceases
to be a state savings bank under the laws of this State, except that its
corporate existence is considered to be extended for the purpose of
prosecuting or defending suits by or against it and of enabling it to close
its business affairs as a state savings bank and to dispose of and convey
its property. At the time when the conversion becomes effective all the
property of the state savings bank including all its rights, title, and interest
in and to all property of whatever kind, whether real, personal, or mixed,
and things in action, and every right, privilege, interest, and asset of any
conceivable value or benefit then existing, belonging, or pertaining to it,
or which would inure to it, must be vested immediately by act of law and
without any conveyance or transfer, and without any further act or deed,
in and become the property of the federal depository institution, which
shall have, hold, and enjoy the same in its own right as fully and to the
same extent as the same was possessed, held, and enjoyed by the state
savings bank; and the federal depository institution as of the effective
time of the conversion shall succeed to all the rights, obligations, and
relations of the state savings bank.
Section 34-30-320. (A) If a state charter converts to a federal charter
in which the form of organization also is changed from stock to mutual,
or from mutual to stock, the conversion shall proceed initially as a charter
conversion under Section 34-30-310. After the state savings bank
becomes a federal depository institution, the federal regulatory authority
governs the continuing conversion of the form of ownership of the newly
converted depository institution.
(B) If a federal charter converts to a state charter conversion in which
the form of organization also is changed from mutual to stock, the
conversion proceeds initially as a charter conversion under Section
34-30-300. After the federal depository institution becomes a state savings
bank, Section 34-30-330 or 34-30-340 governs the continuing conversion
of the form of ownership of the newly converted state savings bank.
(C) This section does not apply to the simultaneous charter and
organization conversion accomplished in conjunction with a merger under
Section 34-30-360.
Section 34-30-330. (A) A mutual state savings bank may convert
from mutual to the stock form of organization as provided in this section.
(B) A mutual state savings bank may apply to the board for permission
to convert to a stock state savings bank and for certification of appropriate
amendments to the state savings bank's articles of incorporation. Upon
receipt of an application to convert from mutual to stock form, the board
shall examine all facts connected with the requested conversion. The state
savings bank applying for permission to convert must pay a fee
established by the board.
(C) The state savings bank must submit a plan of conversion as a part
of the application to the board. The board may approve it with or without
amendment, if it is reasonably anticipated that:
(1) after conversion, the state savings bank is in sound financial
condition and is soundly managed;
(2) the conversion does not impair the capital of the state savings
bank nor adversely affect the state savings bank's operations;
(3) the conversion is fair and equitable to the members of the state
savings bank and no person whether member, employee, or otherwise,
receives any inequitable gain or advantage by reason of the conversion;
(4) the state savings bank services provided to the public by the
state savings bank are not adversely affected by the conversion;
(5) the substance of the plan has been approved by a vote of
two-thirds of the board of directors of the state savings bank;
(6) all shares of stock issued in connection with the conversion are
offered for sale first to the members of the state savings bank;
(7) all stock is offered for sale to members of the state savings bank
and others in prescribed amounts and otherwise under a formula and
procedure that is fair and equitable and is fairly disclosed to all interested
persons; and
(8) the plan provides a statement as to whether stockholders have
preemptive rights to acquire additional or treasury shares of the state
savings bank.
If the board approves the plan, the plan must be submitted to the
members as provided in subsection (D). If the board refuses to approve
the plan, the board shall state the objections in writing and give the
converting state savings bank an opportunity to amend the plan to obviate
the objections.
(D) After lawful notice to the members of the state savings bank and
full and fair disclosure, the substance of the plan must be approved by a
majority of the total votes cast by members of the state savings bank
present in person or by proxy, or such greater voting requirement as
required by federal law. The results of the vote as certified by an
appropriate officer of the state savings bank must be filed with the board.
The board shall then either approve or disapprove the requested
conversion. After approval of the conversion, the board shall supervise
and monitor the conversion process and shall ensure that the conversion
is conducted lawfully and under the state savings bank's approved plan of
conversion.
Section 34-30-340. Two or more mutual state savings banks or two
or more stock state savings banks organized and operating may merge or
consolidate into a single state savings bank. The procedure to effect the
merger is:
(1) The directors, or a majority of them, of the state savings banks that
desire to merge, at separate meetings, may enter into a written agreement
of merger specifying each state savings bank to be merged and the state
savings bank that is to receive into itself the merging state savings bank
or banks, and prescribing the terms and conditions of the merger and the
mode of carrying it into effect. The merger agreement may provide other
provisions with respect to the merger as appear necessary or desirable, or
as the board may require.
(2) A meeting of members or stockholders of each of the state savings
banks must be held separately upon written notice of not less than thirty
days to members or stockholders of each state savings bank. The notice
must specify the time, place, and purpose of the meeting. Notice must be
made by personal service or postage prepaid mail to the last address of
each member or stockholder appearing upon the records of the stock state
savings bank, or in the alternative for a merger of mutual state savings
banks, by publication of notice at least once a week for two weeks
preceding the meeting in one or more newspapers of general circulation
in the county or counties where each state savings bank has its principal
or a branch office, or in a newspaper of general circulation in an adjoining
county if none is available in the county. An appropriate officer of the
state savings bank shall make proof by affidavit at the meeting of the due
service of the notice or call for the meeting.
(3) The merger agreement and copies of the minutes of the meetings
of the respective boards of directors as verified by the secretaries of the
respective state savings banks must be submitted to the board, who shall
investigate the affairs of the state savings banks proposing to merge. Each
state savings bank must pay a fee established by the board. If, as a result
of the investigation, the board concludes that factors are favorable, the
board shall approve the merger in writing.
(4) At separate meetings of members or stockholders of the respective
state savings banks, members or stockholders may adopt, by an
affirmative vote of a majority of the votes or shares present, in person or
by proxy, a resolution to merge into a single state savings bank upon the
terms of the merger agreement as has been agreed upon by the directors
of the respective state savings banks and as approved by the board. Upon
the adoption of the resolution, a copy of the minutes of the proceedings
of the meetings of members or stockholders of the respective state savings
banks, certified by an appropriate officer of the merging state savings
banks, must be filed in the office of the board. The board then shall
approve or disapprove the merger for compliance with this chapter. If the
board approves the merger, it shall issue a certificate of approval of the
merger. Upon filing with the Secretary of State, the merger agreement
takes effect according to its terms and is binding upon all members or
stockholders of the state savings banks merging, and it is the act of merger
of the constituent state savings banks under the laws of this State, and the
certificate or certified copy of filing is evidence of the agreement and act
of merger of the state savings banks and the observance and performance
of all acts and conditions necessary to have been observed and performed
before the merger. If the board disapproves the merger, the board shall
issue a written statement of the reasons for the disapproval and notify the
state savings banks to that effect.
(5) Upon the merger of any state savings bank, as above provided,
into another:
(a) its corporate existence is merged into that of the receiving state
savings bank; and all its right, title, interest in and to all property of any
kind, whether real, personal, or mixed, and things in action, and every
right, privilege, interest, or asset of any conceivable value or benefit then
existing belonging or pertaining to it, or which would inure to it under an
unmerged existence, immediately by law and without any conveyance or
transfer, and without any further act or deed, must be vested in and
become the property of the receiving state savings bank, which shall have,
hold, and enjoy the same in its own right as fully and to the same extent
as if the same were possessed, held, or enjoyed by the state savings banks
so merged; and the receiving state savings bank must absorb fully and
completely the state savings bank or banks so merged;
(b) its rights, liabilities, obligations, and relations to a person
remain unchanged and the state savings bank into which it has been
merged must succeed, by the merger, to all the relations, obligations, and
liabilities as though it had itself assumed or incurred them. An obligation
or liability of a member, customer, or stockholder in a state savings bank
that is a party to the merger must not be affected by the merger, but
obligations and liabilities must continue as they existed before the merger,
unless otherwise provided in the merger agreement;
(c) a pending action or other judicial proceeding to which a merged
state savings bank is a party, is not abated or discontinued by reason of
the merger, but may be prosecuted to final judgment, order, or decree in
the same manner as if the merger had not been made; or the receiving
state savings bank may be substituted as a party to the action or
proceeding, and a judgment, order, or decree may be rendered to or
against it that might have been rendered for or against the other state
savings bank if the merger had not occurred.
(6) Notwithstanding another provision of this section, the board may
waive any or all of the foregoing requirements upon finding that waiver
would be in the best interest of members or stockholders of the merging
state savings banks.
Section 34-30-350. Any two or more depository institutions, when
one or more is a state savings bank and one or more is a federal depository
institution operating in South Carolina, may merge under either a state
savings bank charter or a federal charter.
Section 34-30-360. (A) A stock state savings bank, upon a majority
vote of its board of directors, may apply to the board for permission to
merge with a bank, as defined in Chapter 25, or an association, as defined
in Section 34-28-30.
(B) The state savings bank shall submit a plan of merger as a part of
the application to the board. The board may approve the plan of merger
with or without amendment.
If the board approves it, the plan must be submitted to stockholders or
members as provided in subsection (C) of this section. If the board refuses
to approve the plan, the board shall state the objections in writing and give
the merging state savings bank an opportunity to amend the plan to
obviate the objections.
(C) After lawful notice to stockholders or members of the state savings
bank and full and fair disclosure, the substance of the plan must be
approved by the affirmative vote of a majority of the votes or shares
present, in person or by proxy. The results of the vote as certified by an
appropriate officer of the state savings bank must be filed with the board.
The board then shall approve or disapprove the requested merger.
Section 34-30-370. A state savings bank may be dissolved
voluntarily by a majority vote of the board of directors when substantially
all of the assets have been sold for the purpose of terminating the business
of the savings bank and when a certificate of dissolution is recorded in the
manner required by this chapter for the recording of articles of
incorporation.
Section 34-30-380. At any annual or special meeting called for the
purpose of dissolution, a state savings bank, by an affirmative vote, in
person or by proxy, of at least two-thirds of the total number of shares or
votes that all members or stockholders of the association are entitled to
cast, may resolve to dissolve and liquidate the state savings bank and
adopt a plan of voluntary dissolution. Upon adoption of the resolution and
plan of voluntary dissolution, the members or stockholders shall elect not
more than three liquidators who shall post bond as required by the board.
The liquidators shall have full power to execute the plan by the following
procedure:
(1) A copy of the resolution, certified by an appropriate officer of the
state savings bank, and the minutes of the meeting of members or
stockholders, the plan of liquidation, and an itemized statement of the
state savings bank's assets and liabilities, sworn to by a majority of its
board of directors, must be filed with the board. The minutes of the
meeting of members or stockholders must be certified by an appropriate
officer of the association, and describe the notice given and the time of
mailing, the vote on the resolution, the total number of shares or votes that
all members of the state savings bank were entitled to cast, and the names
of the elected liquidators.
(2) If the board finds that the proceedings comply with this chapter
and that the plan of liquidation is not unfair to a person affected, the board
shall attach a certificate of approval to the plan and forward one copy to
the liquidators and one copy to the state savings bank's federal deposit
account insurance corporation. Once the board has approved the
resolution and the plan of liquidation, it is unlawful for the state savings
bank to accept any additional deposit accounts or additions to deposit
accounts or make any additional loans, but all its income and receipts in
excess of actual expenses of liquidation of the state savings bank must be
applied to the discharge of its liabilities.
(3) The liquidating state savings bank must pay a reasonable
compensation, subject to the approval of the board, to the appointed
liquidator.
(4) The plan is effective upon the recording of the board's certificate
of approval in the manner required by this chapter for the recording of the
articles of incorporation.
(5) The liquidation of the state savings bank is subject to the
supervision and examination of the board.
Section 34-30-390. Upon completion of liquidation, the liquidator
shall file with the board a final report and accounting of the liquidation.
The board's approval of the report operates as a complete and final
discharge of the liquidator, the board of directors, and each member or
stockholder in connection with the liquidation of the state savings bank.
Upon approval of the report, the board shall issue a certificate of
dissolution of the state savings bank and shall record it in the manner
required by this chapter for the recording of articles of incorporation. The
dissolution is effective upon the recording of the certificate of dissolution.
Section 34-30-400. No merger may be approved by the board under
this Article 3:
(1) which would result in a monopoly, or which would be in
furtherance of a combination or conspiracy to monopolize or to attempt
to monopolize the banking business of this State; or
(2) the effect of which in this State would be substantially to lessen
competition, or to tend to create a monopoly, or which in another manner
would be in restraint of trade, unless it finds that the anticompetitive
effects of the proposed transaction clearly are outweighed in the public
interest by the probable effect of the proposed merger in meeting the
purposes of this chapter or the convenience and needs of the primary
service area served.
Section 34-30-410. Notwithstanding another provision of this
chapter, to protect the public, including members, depositors, or
stockholders of a state savings bank, the board, upon making a finding
that a state savings bank is unable to operate in a safe and sound manner,
may authorize or require a short form merger, consolidation, conversion,
or combination merger and conversion of the state savings bank, or
another transaction.
Section 34-30-420. (A) Article 2 of this chapter does not apply to
applications for permission to organize an interim state savings bank so
long as the application is approved by the board.
(B) Preliminary approval of an application for permission to organize
an interim state savings bank is conditional upon the board's approval of
an application to merge the interim state savings bank and an existing
stock state savings bank or on the board's approval of another transaction.
Article 4
Supervision
Section 34-30-510. The board shall perform the duties and exercise
the powers as to state savings banks organized or operated under this
chapter, except as otherwise provided in this chapter.
Section 34-30-520. (A) The board may establish procedures to
implement a provision of this chapter and to define a term not defined in
the chapter so as to foster and maintain an effective level of savings bank
services and the security of depositor accounts. The provisions of the
State Administrative Procedures Act apply to all regulations of the board
under this chapter.
(B) After ten days' notice and hearing in which the savings bank may
appear, the board may issue a cease and desist order, having determined
from competent and substantial evidence that a savings bank is engaged
or has engaged or when the board has reasonable cause to believe the
savings bank is about to engage in an unsafe or unsound practice, or is
violating or has violated or the board has reasonable cause to believe is
about to violate a material provision of a law, regulation, or a condition
imposed in writing by the board or a written agreement made with the
board.
(C) After ten days' notice and hearing in which the director, officer, or
committee member may appear, the board may suspend from office and
prohibit from further participation in the conduct of the affairs of a
savings bank any director, officer, or committee member who has
committed a violation of a law, regulation, or of a cease and desist order
or who has engaged or participated in an unsafe or unsound practice in
connection with the savings bank or who has committed or engaged in
any act, omission, or practice which constitutes a breach of that person's
fiduciary duty as any director, officer, or committee member, when the
board has determined that the action or actions have resulted or will result
in substantial financial loss or other damage that seriously prejudices the
interests of the depositors.
(D) By issuing operational instructions, the board may authorize state
savings banks to engage in activities approved for federally chartered
savings banks.
Section 34-30-530. (A) The board shall adopt rules or regulations,
definitions, and forms as necessary for the supervision and regulation of
state savings banks and for the protection of the public investing in state
savings banks.
(B) Without limiting the generality of subsection (A) of this section
the board may adopt rules or regulations, definitions, and forms with
respect to the following:
(1) reserve requirements;
(2) stock ownership and dividends;
(3) stock transfers;
(4) original incorporators, stockholders, directors, officers, and
employees of a state savings bank;
(5) bylaws;
(6) the operation of state savings banks;
(7) deposit accounts, bonus plans, and contracts for savings
programs;
(8) loans and loan expenses;
(9) investments and resource management;
(10) forms or proxies, holders of proxies, and proxy solicitations;
(11) types of financial records to be maintained by state savings
banks;
(12) retention periods of various financial records;
(13) internal control procedures of state savings banks;
(14) conduct and management of state savings banks;
(15) chartering and branching;
(16) liquidations, dissolutions, and receiverships;
(17) mergers, consolidations, conversion, and combination mergers
and conversions;
(18) interim state savings banks;
(19) reports that may be required by the board;
(20) conflicts of interest;
(21) service corporations; and
(22) subsidiary state savings banks and holding companies, including
the rights of members, levels of investment in the subsidiaries, and stock
sales.
(C) A state savings bank may cause any or all of its records to be
recorded, copied, or reproduced by:
(1) photostatic, photographic, or microfilming process; or
(2) electronic graphic imaging through scanning, digitizing, or other
means.
These processes or means must correctly copy, reproduce, or form a
medium for copying or reproducing the original record so that an accurate
facsimile of the original is printed or otherwise reproduced on paper, film,
or similar medium.
(D) The printed reproduction is considered an original record for all
purposes and must be treated as an original record in all courts or
administrative agencies for the purpose of its admissibility into evidence,
regardless of whether the institution retains or disposes of the original,
provided:
(1) the original document otherwise qualified as a business record
pursuant to the South Carolina Uniform Business Records as Evidence
Act or the appropriate state or federal rules or regulations of evidence; and
(2) a custodian or other qualified witness as those terms are used in
the appropriate state or federal rules of evidence certifies that the printed
reproduction is a true and correct copy of the original.
Section 34-30-540. (A) The board is authorized to examine and
investigate everything relating to the business of a state savings bank or
its holding company.
(B) The board shall furnish a copy of the report to the state savings
bank examined and, upon request, may furnish a copy of or excerpts from
the report to the insurer of accounts.
(C) A state savings bank may not wilfully delay or obstruct an
examination. A person failing to comply with this subsection is guilty of
a misdemeanor.
(D) A person who possesses or controls books, accounts, or papers of
a state savings bank shall not refuse to exhibit them to the board or the
board's agents on demand, or knowingly or willingly make a false
statement in regard to them. A person failing to comply with this
subsection is guilty of a misdemeanor.
Section 34-30-550. Every state savings bank, including state savings
banks in the process of voluntary liquidation, or its holding company,
shall pay into the office of the board fees for supervision and examination,
and at the times, as prescribed by the board.
Section 34-30-560. (A) If, in the opinion of the board, an
examination conducted under Section 34-30-550 fails to disclose the
complete financial condition of a state savings bank, the board, in order
to ascertain its complete financial condition, may make an extended:
(1) audit of examination of the state savings bank or cause an audit
or examination to be made by an independent auditor at the expense of the
state savings bank; and
(2) revaluation of the assets or liabilities of the state savings bank
or cause an independent appraiser to make a revaluation at the expense of
the state savings bank.
(B) The board may collect from the state savings bank a reasonable
sum for actual or necessary expenses of revaluation or audit of
examination.
Section 34-30-570. (A) The board and the board's agents:
(1) shall have free access to all books and records of a state savings
bank, or its service corporation or holding company, that relate to its
business, and the books and records kept by an officer, agent, or employee
relating to or upon which any record is kept;
(2) may subpoena witnesses and administer oaths or affirmations in
the examination of any director, officer, agent, or employee of a state
savings bank, or its service corporation or holding company or of another
person in relation to its affairs, transactions, and conditions;
(3) may require the production of records, books, papers, contracts,
and other documents; and
(4) may order that improper entries be corrected on the books and
records of a state savings bank.
(B) The board may issue subpoenas duces tecum.
(C) If a person fails to comply with a subpoena or a party or witness
refuses to testify on a matter, a court of competent jurisdiction, on the
application of the board, shall compel compliance by proceedings for
contempt as in the case of disobedience of the requirements of a subpoena
issued from the court or a refusal to testify in the court.
Section 34-30-580. (A) The board may direct the making of test
appraisals of real estate and other collateral securing loans made by state
savings banks doing business in this State, employ competent appraisers,
or prescribe a list from which competent appraisers may be selected, for
the making of these appraisals by the board, and all other acts incident to
the making of test appraisals.
(B) Instead of causing an appraisal to be made, the board may accept
an appraisal caused to be made by the insurer of accounts.
(C) The expense and cost of test appraisals made under this section
must be defrayed by the state savings bank subjected to the test appraisals,
and each state savings bank doing business in this State shall pay all
reasonable costs and expenses of the test appraisals when it is directed.
Section 34-30-590. (A) The following records or information of the
board, or its agents, are confidential and must not be disclosed:
(1) information obtained or compiled in preparation of or
anticipation of, or during an examination, audit, or investigation of any
association;
(2) information reflecting the specific collateral given by a named
borrower, the specific amount of stock owned by a named stockholder, a
stockholder list supplied to the board under Section 34-30-170, or specific
deposit accounts held by a named member or customer;
(3) information obtained, prepared, or compiled during or as a result
of an examination, audit, or investigation of a state savings bank by an
agency of the United States;
(4) information and reports submitted by state savings banks to
federal regulatory agencies;
(5) information and records regarding complaints from the public
received by the board that concern state savings banks when the
complaint could result in an investigation, except to the management of
those state savings banks; and
(6) other letters, reports, memoranda, recordings, charts, documents,
or records that disclose information of which disclosure is prohibited in
this subsection.
(B) A court of competent jurisdiction may order the disclosure of
specific information.
(C) Nothing in this section prevents the exchange of information
relating to state savings banks and their business with the representatives
of the agencies of this State, other states, or of the United States, or with
reserve or insuring agencies for state savings banks. The private business
and affairs of an individual or company must not be disclosed by a person
employed by the board, a member of the board, or by a person with whom
information is exchanged under the authority of this subsection.
(D) An official employee of this State violating this section is liable to
a person injured by disclosure of the confidential information for all
damages sustained. Penalties provided are not exclusive of other
penalties.
(E) The fee for copies of disclosed information must be set by the
board.
Section 34-30-600. A person who engages in any of the following
acts or practices is guilty of a misdemeanor and, upon conviction, must be
fined or imprisoned, or both, in the discretion of the court:
(1) Defamation: Making, publishing, disseminating, or circulating,
directly or indirectly, or aiding, abetting, or encouraging the making,
publishing, disseminating, or circulating of any oral, written, or printed
statement that is false regarding the financial condition of a state savings
bank.
(2) False information and advertising: Making, publishing,
disseminating, circulating, or otherwise placing before the public in any
publication, media, notice, pamphlet, letter, poster, or other way, an
advertisement, announcement, or statement containing any assertion,
representation, or statement with respect to the state savings bank business
or with respect to a person in the conduct of the state savings bank
business that is untrue, deceptive, or misleading.
Article 5
Enforcement
Section 34-30-760. If the board, as a result of an examination or from
a report made to it, finds that a state savings bank or a service corporation
or subsidiary is violating the provisions of its articles of incorporation or
bylaws, the laws of this State or the United States, or any lawful order or
regulation of the board, it shall state, by a formal written order delivered
to the home office, the alleged violation, with a statement of the facts
alleged to constitute the violation, and order discontinuance of the
violation and compliance with all requirements of law. The order must
specify its effective date, which may be immediate or may be at a later
date, and it remains in effect until withdrawn by the board or until
terminated by a court order. The order of the board, upon application
made on or after its effective date by the board to the circuit court in the
county in which the home office of the association or organization is
located, may be enforced by the court. A state savings bank or company
affected by an order of the board, after its receipt, shall have the right to
apply within thirty days to a court of competent jurisdiction for an
immediate hearing and order suspending the order of the board until the
hearing has been completed. The hearing of the application to the court
must be upon that notice to the board as the court shall provide. Whether
upon application by the board or by the state savings bank or other
company, the court has power to and shall adjudicate the question and
enter the proper orders and enforce the same.
Section 34-30-770. (A) If the board, as a result of an examination or
from any report made to it, believes that the public interest may be served
by the appointment of a conservatorship, and if it finds that a state savings
bank is:
(1) in an impaired condition;
(2) engaging in practices which threaten to result in an impaired
condition; or
(3) in violation of an order or injunction authorized by Section
34-30-760 which has become final in that time to appeal has expired
without appeal or a final order has been entered from which there may be
no appeal, the board may appoint a conservator for the state savings bank.
Upon the appointment, the board shall apply immediately to the circuit
court in the county in which the home office of the state savings bank is
located and, in the case of a foreign state savings bank doing business in
this State, the county in which its registered office in this State is located,
for confirmation of the appointment, and the court has exclusive
jurisdiction to determine the issues and all related matters. The court shall
confirm the appointment if it finds that one or more grounds specified in
this subsection exist, and a certified copy of the order of the court is
evidence of confirmation of the appointment. The conservator has the
power and authority provided in this chapter and other power and
authority as may be expressed in the order of the court. The conservator
shall endeavor promptly to remedy the situations complained of by the
board in its application for confirmation of the appointment. Within six
months of the date of the appointment, or within twelve months if the
court extends the six-month period, the state savings bank must be
returned to its board of directors and after that must be managed and
operated as if no conservator had been appointed, or a receiver must be
managed and operated as provided. If an employee of the board is
appointed conservator, he shall receive no additional compensation, but
if another person is appointed, the compensation of the conservator, as
determined by the court, must be paid by the state savings bank. A
certified copy of the order of the court discharging the conservator and
returning the state savings bank to the directors is evidence of the
discharge.
(B) A conservator has all the rights, powers, and privileges possessed
by the officers, directors, members, and stockholders of the state savings
bank.
(C) The conservator shall not retain special counsel or other experts,
incur expense other than normal operating expenses, or liquidate assets
except in the ordinary course of operations.
(D) The directors and officers shall remain in the office and the
employees shall remain in their respective positions, but the conservator
may remove the director, officer, or employee, provided the order of
removal of a director or officer is approved in writing by the board.
(E) While the state savings bank is in the charge of a conservator,
borrowers, and other obligors of the state savings bank shall continue to
make payments to the state savings bank in accordance with the terms and
conditions of their contracts. The conservator, in his discretion, may
permit a deposit account holder to withdraw his account from the state
savings bank pursuant to the provisions of this chapter or under and
subject to those regulations as the board may prescribe. The conservator
has power to accept new deposit accounts and additions to existing
deposit accounts, but amounts received by the conservator may be
segregated if the board orders in writing. The segregated amounts are not
subject to offset and may not be used to liquidate indebtedness of the state
savings bank existing at the time the conservator was appointed for it or
subsequent indebtedness incurred for the purposes of liquidating the
indebtedness of a state savings bank existing at the time the conservator
was appointed. All expenses of the state savings bank during the
conservatorship must be paid by the state savings bank.
Section 34-30-780. (A) If the board finds that a state savings bank
is:
(1) in an impaired condition;
(2) engaging in practices which threaten to result in an impaired
condition; or
(3) in violation of an order or injunction, as provided in Section
34-30-760, which has become final in that the time to appeal has expired
without appeal or a final order has been entered from which there is no
appeal, the board may appoint a receiver for the state savings bank. Upon
this appointment, the board shall apply immediately to the circuit court in
the county in which the home office of the state savings bank is located
and, in the case of a foreign state savings bank doing business in this
State, the county in which its registered office in this State is located, for
confirmation of the appointment, and the court has exclusive jurisdiction
to determine the issues and all related matters. These proceedings must
be given precedence over other cases pending in the court and must be
expedited. The court shall confirm the appointment if it finds that one or
more of the grounds specified in this section exist, and a certified copy of
the order of the court confirming the appointment is evidence of its
confirmation. In the case of an insured state savings bank, the
appointment by the board of a receiver under this section constitutes an
official determination of a public authority in this State pursuant to which
a receiver is appointed for the purpose of liquidation as contemplated by
and within the meaning of the Federal Deposit Insurance Act, if, within
ten days after the date the application of the board is filed, confirmation
of the appointment or denial of confirmation has not been issued by the
court. The receiver has all the powers and authority of a conservator, plus
the power to liquidate, and shall have those other powers and authority as
may be expressed in the order of the court. If the chairman of the board,
or his deputy, or an employee of the board is appointed receiver, he shall
receive no additional compensation, but if another person is appointed, the
compensation of the receiver, as determined by the court, must be paid
from the assets of the state savings bank.
(B) If the state savings bank is an institution insured by the Federal
Deposit Insurance Corporation, the Federal Deposit Insurance
Corporation must be tendered appointment as receiver or co-receiver. If
it accepts the appointment, it may make loans on the security of or
purchase at public or private sale a part or all of the assets of the state
savings bank of which it is receiver or co-receiver, provided the loan or
purchase is approved by the court.
(C) The procedure in the receivership action must be in all other
respects in accordance with the practice in the court where the action was
filed, including all rights of appeal and review. The directors, officers,
and attorneys of a state savings bank in office at the time of the initiation
of a proceeding under this section or Section 34-30-770 are authorized to
contest the proceeding and must be reimbursed for reasonable expenses
and attorney fees by the state savings bank or from its assets. A court
having a proceeding before it shall allow reasonable expenses and
attorney fees for the directors, officers, and attorneys.
Article 6
Corporate Administration
Section 34-30-1000. (A) The membership of a mutual state savings
bank consists of those who:
(1) hold deposit accounts in the state savings bank, and
(2) borrow funds and those who become obligated on a loan from
the state savings bank, for as long as the loan remains unpaid and the
borrower remains liable to the state savings bank for the payment of the
loan.
(B) A person, as a matter of right or in a trust or other fiduciary
capacity, or any partnership, association, corporation, political
subdivision, or public or governmental unit or entity may become a
member of a mutual state savings bank. Members must be possessed of
voting rights and other rights as are provided by a state savings bank's
articles of incorporation and bylaws as approved by the board.
Section 34-30-1010. (A) The directors of a mutual state savings bank
must be elected by the members at an annual meeting, held pursuant to
Section 34-30-1060, for the terms as the bylaws of the state savings bank
may provide. Directors' terms may be classified in the articles of
incorporation. Voting for directors by deposit account holders may be
weighted according to the total amount of deposit accounts held by the
members, subject to a maximum number of votes for each member, which
a state savings bank may choose to prescribe in its bylaws. Voting rights
for borrowers must be prescribed in a detailed manner in the bylaws of the
state savings bank.
(B) The directors of a stock state savings bank must be elected by the
stockholders at an annual meeting, held pursuant to Section 34-30-1060,
for the terms as the bylaws of the state savings bank may provide.
Directors' terms may be classified in the articles of incorporation.
(C) A director of a state savings bank shall have an ownership interest
in the state savings bank, or in the case of a stock state savings bank, in
the holding company for the stock state savings bank.
(D) A state savings bank shall have at least five directors.
(E) A vacancy occurring in the board of directors, including a vacancy
created by reason of an increase in the number of directors, may be filled
by the affirmative vote of a majority of the remaining directors. A director
elected to fill a vacancy shall hold office for the remainder of the original
term of the vacancy.
(F) A person shall not serve as an officer or director of a state savings
bank who:
(1) has been convicted on an offense involving fraud or a breach of
trust or which constitutes a violation of the laws relating to financial
institutions, except with the prior approval of the board upon a showing
of rehabilitation; or
(2) is indebted to the savings bank for more than thirty days upon
a judgment that has become final.
Section 34-30-1020. The bylaws and amendments must be certified by
the appropriate corporate official and submitted to the board at least thirty
days before they may become effective. Unless the board determines that
a proposed amendment to the bylaws conflicts with a provision of this
chapter or applicable law, the amendment is effective at the expiration of
the thirty-day period, or at such earlier date as permitted by the board. The
board of directors of a state savings bank has the authority to adopt or
amend bylaws that do not conflict with this chapter or the articles of
incorporation. If the articles of incorporation or bylaws provide, the
bylaws may be amended by members or stockholders in the manner
specified in this chapter.
Section 34-30-1030. Officers and directors of a state savings bank
shall act in a fiduciary capacity towards the state savings bank and its
members or stockholders. They shall discharge duties of their respective
positions in good faith, and with that diligence and care which ordinarily
prudent persons would exercise under similar circumstances in like
positions.
Section 34-30-1040. Each director, officer, and employee of a state
savings bank shall avoid placing himself in a position which creates, or
which leads to, or could lead to a conflict of interest or appearance of a
conflict of interest having adverse effects on the interests of members,
customers, or stockholders of the state savings bank, soundness of the
state savings bank, and the purposes of this chapter.
Section 34-30-1050. Voting rights in the affairs of a state savings bank
may be exercised by members and stockholders by voting either in person
or by proxy. In the case of a mutual state savings bank, those entitled to
vote are those who are members of record at the end of the calendar
month next preceding the date of the meeting, except those who have
ceased to be members. In the case of a stock saving bank, the directors
may fix a date not more than sixty days and not fewer than ten days
before the date set for the meeting as the record date as of which the
stockholders of record are entitled to vote. Unless the articles of
incorporation provide otherwise, every stockholder of a stock state
savings bank, if present in person or voting through a duly authorized
proxy at a meeting of stockholders, is entitled to one vote for each share
of voting stock recorded in his name on the books of the state savings
bank on the record date as to each proposal presented at the meeting. The
books of record of stockholders must be produced at any stockholders'
meeting upon the request of a stockholder. A majority of all votes cast at
a meeting of members or stockholders shall determine any question unless
this chapter or the provisions of the South Carolina Business Corporation
Act, Chapters 1 to 25 of Title 33, provides otherwise.
Section 34-30-1060. (A) A state savings bank must hold an annual
meeting of its members or stockholders, at a time and place as provided
in the bylaws or determined by the board of directors. The annual meeting
must be held for the purpose of electing directors and for other purposes
as specified by the board of directors or pursuant to procedures as
provided for in the bylaws.
(B) The board of directors of a mutual state savings bank shall cause
to be published once a week for two weeks preceding the meeting, in a
newspaper of general circulation in the county where the state savings
bank has its principal office, a notice of the meeting, stating the time and
place where it is to be held. In addition to the notice, a mutual state
savings bank must disseminate additional notice of an annual meeting by
notice made available to all members entering the premises of a branch
office of the state savings bank in the regular course of business by
posting notice, in one or more conspicuous places, announcing the
pending meeting, the time, date, place and purpose of the meeting. The
additional notice must be given at least fourteen days before the meeting
and shall continue through the time of the meeting.
(C) The board of directors of a stock state savings bank shall give
written or printed notice, stating the time and place of the annual meeting,
not less than ten days nor more than sixty days before the date of the
meeting, either personally or by mail, to each stockholder of record
entitled to vote at the meeting. If mailed, the notice is considered to be
delivered when deposited in the United States postal service addressed to
the stockholder at the address as it appears on the records of the
corporation, with postage prepaid.
Section 34-30-1070. (A) Special meetings of members or
stockholders of a state savings bank may be called by the president or the
board of directors or by other officers or persons as provided for in the
articles of incorporation or bylaws of the savings bank. Special meetings
must be held for such purpose as specified by the board of directors.
(B) Notice of a special meeting of members or stockholders must be
given in the same manner as an annual meeting as provided by Section
34-30-1060.
Section 34-30-1080. No less than thirty holders of deposit accounts in
a mutual state savings bank or a majority of shares eligible to vote in a
stock state savings bank, present in person or represented by proxy,
constitutes a quorum at any annual or special meeting.
Section 34-30-1090. (A) A state savings bank must maintain a blanket
indemnity bond as prescribed by the board, but not less than one million
dollars.
(B) A state savings bank that employs collections agents, who are not
covered by the bond required in this section, must provide for the bonding
of each agent in an amount equal to at least twice the average monthly
collections of the agent. The agents are required to make settlement with
the state savings bank at least once monthly. No coverage by bond must
be required of an agent that is a bank or a savings institution insured by
the Federal Deposit Insurance Corporation. The amount and form of the
bond and the sufficiency of the surety must be approved by the board of
directors and the board before it is valid. A bond must provide that its
cancellation, either by the surety or by the insured, is not effective unless
and until thirty days' notice in writing has been given to the board.
Section 34-30-1100. (A) Notwithstanding another provision of this
chapter, a state savings bank, in its articles of incorporation or bylaws,
may provide that a director or officer is not liable personally, or is liable
only to the extent provided, to the state savings bank or its depositors or
members or stockholders for damages for breach of a duty owed to the
savings bank or its depositors or members, except that the provision does
not relieve an officer or director from liability for an act or omission:
(1) in breach of the person's duty of loyalty to the state savings
bank or its depositors, members, or stockholders;
(2) not in good faith or involving a knowing violation of law; or
(3) resulting in receipt by the person of an improper personal
benefit.
(B) As used in this section, an act or omission in breach of a person's
duty of loyalty means one which that person knows or believes to be
contrary to the best interests of the state savings bank or its depositors in
connection with a matter in which he has a material conflict of interest.
Article 7
Loans and Investments
Section 34-30-1210. (A) A state savings bank may lend funds:
(1) on the security of deposit accounts, but no loan shall exceed the
withdrawal value of the pledged deposit account;
(2) on the security of real property:
(a) of a value, determined in accordance with this chapter and
appraisal rules or regulations as the board may adopt sufficient to provide
good and ample security for the loan;
(b) with a fee simple title or a leasehold title of no less duration
than ten years beyond the maturity of the loan;
(c) with the security interest in the real estate evidenced by an
appropriate written instrument and the loan evidenced by a note, bond, or
similar written instrument. A loan on the security of the whole of the
beneficial interest in a land trust satisfies the requirements of this subitem
if the title to the land is held by a corporate trustee and if the real estate
held in the land trust meets the other requirements of this item;
(3) for the purpose of repair, improvement, rehabilitation,
furnishing, or equipment of real estate;
(4) the purpose of financing or refinancing an existing ownership
interest, in certificates of stock, certificates of beneficial interest, or other
evidence of an ownership interest in, and a proprietary lease from, a
corporation, trust, or partnership formed for the purpose of the
cooperative ownership of real estate, secured by the assignment or transfer
of the certificates or other evidence of ownership of the borrower;
(5) for the purchase of loans that, at the time of purchase, the state
savings bank is authorized to make in accordance with this chapter;
(6) for the purchase of installment contracts for the sale of real
estate, and title to it that is subject to the contract, but in each instance
only if the state savings bank, at the time of purchase, is authorized to
make a mortgage loan of the same amount and for the same length of time
on the security of the real estate;
(7) for the purchase of loans guaranteed or insured, wholly or in
part, by the United States or any of its instrumentalities;
(8) for secured or unsecured financing for business, corporate,
personal, family, or household purposes, or for secured or unsecured loans
for agricultural or commercial purposes, subject to rules or regulations as
the board adopts;
(9) for the purpose of mobile home financing;
(10) for a loan secured by not more than ninety percent of the cash
surrender value of a life insurance policy;
(11) for a loan on collateral that is a legal investment if made by the
state savings bank under this chapter.
(B) Notwithstanding any provision of this chapter to the contrary, a
state savings bank may make any loans within the lending limits
prescribed that the state savings bank could make if it were incorporated
and operating as a federal association or federal savings bank or as a state
or national bank.
Section 34-30-1220. (A) The board of directors shall establish
procedures by which loans are to be considered, approved, and made by
the state savings bank.
(B) All actions on loan applications to the state savings bank must be
reported to the board of directors at its next meeting.
(C) Subject to rules or regulations as the board considers appropriate,
a state savings bank may lend funds on collateral considered sufficient by
the board of directors to secure loans properly. Loans made solely upon
security of collateral consisting of stock or equity securities that are not
listed on a national stock exchange or regularly quoted and offered for
trade on an over-the-counter market are considered loans without security.
(D) A state savings bank may lend funds without requiring security.
An unsecured loan shall not exceed the maximum amount authorized by
rules or regulations of the board.
(E) A state savings bank may invest funds on hand in the purchase of
loans of a type that the state savings bank could make in accordance with
this chapter.
(F) A state savings bank may invest in a participating interest in loans
of a type that the state savings bank could make in accordance with this
chapter.
(G) A state savings bank may sell a loan, including a participating
interest in a loan.
Section 34-30-1230. A state savings bank may not accept its own
capital stock, or that of its holding company, or its own mutual capital
certificates as security for loans made by the state savings bank.
Section 34-30-1240. A state savings bank or service corporation shall
not require, as a condition of making a loan, that the borrower contract
with any specific person or organization for particular services, except as
otherwise permitted to national banking associations.
Section 34-30-1250. Pursuant to the provisions of the South Carolina
Consumer Protection Code as contained in Title 37, a state savings bank
may require borrowers to pay:
(1) all reasonable expenses incurred by the state savings bank in
connection with making, closing, disbursing, extending, adjusting, or
renewing loans.
(2) a charge for late payments made during the course of repayment
of a loan.
The payments may be levied only upon the terms and conditions that are
fixed by the state savings bank's board of directors and agreed to by the
borrower in the loan contract.
Section 34-30-1260. Subject to rules or regulations as the board
prescribes, a state savings bank must agree in writing with borrowers as
to the method or plan by which an indebtedness must be repaid.
Section 34-30-1270. The board may adopt rules or regulations no less
stringent than the requirements of the appropriate federal regulatory
authority to govern the making of loans to officers and directors, and their
associates, and companies or other business entities controlled by them.
Section 34-30-1280. A rule or regulation that the board adopts in
respect to loans permitted to be made by state savings banks as necessary
to assure that the loans are in keeping with sound lending practices and to
promote the purposes of this chapter must not prohibit a state savings
bank from making a loan that is a permitted loan for federal savings or
federal association under federal regulatory authority or to a state or
national bank.
Section 34-30-1290. Unless otherwise provided, every loan or other
investment made in violation of this chapter is due and payable according
to its terms and its obligation is not impaired if the violation consists only
of the lending of an excessive sum of authorized security or of investing
in an unauthorized investment.
Section 34-30-1300. (A) The total loans and extensions of credit, both
direct and indirect, by a state savings bank to a person, other than a state,
county, or municipality carrying the full faith and taxing power for money
borrowed, outstanding at one time, shall not exceed fifteen percent of the
net worth of the state savings bank.
(B) For purposes of this section, the term 'person' includes an
individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization, or other
form of entity not specifically listed in this subsection. A loan or
extension of credit to one person includes loans made to other persons
when the proceeds of the loans or extensions of credit are to be used for
the direct benefit of the first person or when the persons are engaged in a
common enterprise.
(C) The limitations of this section do not apply to loans secured by
certificates of deposits or loans or obligations to the extent that they are
secured or covered by guarantees or by commitments or agreements to
take over or purchase them, made by any federal reserve bank or by the
United States or any instrumentality of the United States, including a
corporation wholly owned directly or indirectly by the United States.
Those loans must not exceed fifty percent of the net worth of the savings
bank.
(D) The board may adopt rules or regulations as necessary or
appropriate, including rules or regulations to modify restrictions contained
in this section, in order to render this section consistent with rules or
regulations applicable to either federal savings banks or associations or
national banks.
Section 34-30-1310. With the prior approval of the board, a state
savings bank may invest in real property for the conduct of its business.
The total investment in fixed assets must not exceed fifty percent of the
state savings bank's net worth.
Section 34-30-1320. A state savings bank may invest in an obligation
issued and fully guaranteed in principal and interest by the United States
government or an instrumentality of the United States.
Section 34-30-1330. A state savings bank may invest in an obligation
issued and fully guaranteed in principal and interest by the State or an
instrumentality of the State.
Section 34-30-1340. A state savings bank may invest in the stock of
the Federal Home Loan Bank of which the savings bank is a member, and
in bonds or other evidences of indebtedness or obligation of a Federal
Home Loan Bank.
Section 34-30-1350. A state savings bank may invest in certificates of
deposit, time-insured deposits, savings accounts, demand deposits, or
withdrawable accounts of any banks, associations, credit unions, or state
savings banks as are approved by the board of directors of the savings
bank.
Section 34-30-1360. A state savings bank may invest in stock or other
evidences of indebtedness or obligations of the Federal National
Mortgage Association, the Federal Home Loan Mortgage Corporation, or
other federal government sponsored enterprise, or its successor.
Section 34-30-1370. A state savings bank may invest in bonds or other
evidences of indebtedness that are direct general obligations of a state,
county, city, town, village, school district, sanitation, or park district, or
other political subdivision or municipal corporation in the top three rating
bands of one of the national rating services. A state savings bank also
may invest in bonds or other evidences of indebtedness that are payable
from revenues or earnings specifically pledged for it, which are issued by
a county or a political subdivision or municipal corporation of a county
in this State up to the loan limitations of Section 34-30-1300.
Section 34-30-1380. A state savings bank may invest in stock or
obligations of a corporation doing business in this State, or of an agency
of this State or of the United States, where the principal business of the
corporation or agency is to make loans for the financing of a college or
university education, or education at an industrial education center,
technical institute, or community college.
Section 34-30-1390. A state savings bank may invest in stock or other
evidence of indebtedness or obligations of business or industrial
development corporations chartered by this State or by the United States.
Section 34-30-1400. A state savings bank may invest in stock or other
evidence of indebtedness or obligations of an urban renewal investment
corporation chartered under the laws of this State or of the United States.
Section 34-30-1410. Subject to rules or regulations that the board
considers appropriate, a state savings bank may lend and invest no more
than fifty percent of its total assets in commercial loans. A commercial
loan is for business, commercial, corporate, and agricultural purposes.
Section 34-30-1420. (A) A state savings bank or group of savings
institutions may establish service corporations. A state savings bank also
may invest in the capital stock, obligations, or other securities of existing
service corporations.
(B) A state savings bank may not make an investment in a service
corporation in excess of ten percent of its net worth.
(C) A service corporation is subject to audit and examination by the
board, and the service corporation must pay a supervisory fee established
by the board.
(D) The proposed activities of a service corporation must be reported
to the board, which has sixty days to object to the activities.
(E) The location of the principal and branch offices of a service
corporation must be approved by the board.
Section 34-30-1430. With the prior approval of the board, a state
savings bank may make a loan or investment, or engage in an activity,
which may be permitted under state law for banks or pursuant to the laws
of the United States for federal associations or national banking
associations whose principal offices are located within this State.
Section 34-30-1440. (A) In addition to the powers granted in this
chapter, but subject to rules or regulations that the board prescribes, a
state savings bank incorporated or operated under this chapter may:
(1) with prior board notification, establish off the premises of a
principal office or branch, a customer communications terminal, point of
sale terminal, automated teller machine, automated or other direct or
remote information processing device or machine, whether manned or
unmanned, through or by means of which funds or information relating
to a financial service or transaction rendered to the public is stored and
transmitted, instantaneously or otherwise to or from a state savings bank
terminal or terminals controlled or used by or with other parties. The
establishment and use of a device or machine does not constitute a branch
office, and the capital requirements and standards for approval of a branch
office as provided in the statutes and regulations are not applicable to the
establishment of an off-premises terminal, device, or machine. A state
savings bank, through mutual consent, may share on-premises, unmanned,
automated teller machines, and cash dispensers;
(2) issue credit cards, extend credit in connection with them, and
otherwise engage in or participate in credit card operations;
(3) with prior board approval, act as a trustee, executor, board,
guardian, or in another fiduciary capacity;
(4) become a member of a clearing house association and pledge
assets required for its qualification;
(5) with the approval of the Commissioner of Banking, capital
certificates may be issued by state-chartered savings banks and sold
directly to subscribers or through underwriters, and the certificates
constitute part of the general reserve and net worth of the issuing state
savings bank, provided such certificates:
(a) are subordinate to all savings accounts, savings certificates,
and debt obligations;
(b) constitute a claim in liquidation on the general reserves,
surplus, and undivided profits of the state savings bank remaining after
the payment of all savings accounts, savings certificates, and debt
obligations;
(c) are entitled to the payment of dividends; and
(d) may have a fixed or variable dividend rate.
(6) service loans and investments for others.
(B) With the approval of the Commissioner of Banking, a state savings
bank may issue capital notes, bonds, debentures, or other obligations or
securities.
Section 34-30-1450. With respect to an investment made by a state
savings bank in a loan, if the ownership of the security for the loan or any
part of it becomes vested in a person other than the parties originally
executing the security instruments, and provided there is not an agreement
in writing to the contrary, the association, without notice to the original
parties, may deal with the successors in interest with reference to the
security and debt secured in the same manner as if the property were
owned by the original parties, and may forbear to sue or may extend time
for payment of or otherwise modify the terms of the debt secured by it,
without discharging or in any way affecting the liability of the original
parties or under the debt secured by it.
Article 8
Operations
Section 34-30-1610. (A) A state savings bank may receive deposits
of funds upon terms as the contract of deposit provides subject to
withdrawals or to be paid upon checks of the depositor. Deposit accounts
may be opened or deposits made and held by, in trust or other fiduciary
capacity for, a person, political subdivision, public unit, or governmental
unit. Savings accounts are transferrable only on the books of the state
savings bank after proper written application by the transferee and
acceptance by the state savings bank of the transferee as an account
holder. The state savings bank may treat the holder of record of a savings
account as its owner for all purposes without being affected by a notice
to the contrary unless the state savings bank has acknowledged in writing
notice of a pledge of the savings account.
(B) Each account holder shall execute a deposit account contract
setting forth special terms and provisions. However, the ownership of the
account and the conditions upon which withdrawals may be made may
not be inconsistent with the provisions of this chapter.
(C) An account book, separate certificate, written statement, card,
device or other evidence or means of access of identity, evidencing the
ownership of the account must be issued to each savings account holder
of record as shown by the books of the state savings bank.
(D) Upon the filing with a state savings bank by the holder of record
as shown by the books of the state savings bank, or by his legal
representative, of an affidavit to the effect that the evidence of ownership
of a savings account with the state savings bank has been lost or destroyed
and that the evidence of ownership has not been pledged or assigned in
whole or in part, the state savings bank must issue new evidence of
ownership in the name of the holder of record. The new evidence must
state that it is issued instead of the one lost or destroyed, but the board of
directors may require a bond in an amount it considers sufficient to
indemnify the state savings bank against loss which might result from the
issuance of new evidence of ownership.
Section 34-30-1620. A state savings bank operating under this chapter
and a federal savings institution conducting business in this State may
accept a savings or other deposit account from a married person or minor
as the sole and absolute owner of the account, receive payments by or for
the owner, pay withdrawals, accept pledges to the state savings bank, and
act in other matters with respect to the account of the married person or
minor. A payment or delivery of rights by a state savings bank to a
married person or by a minor who holds a deposit account is a valid and
sufficient release and discharge of the state savings bank for payment so
made or delivery of rights to the married person or minor. In the case of
the minor, the receipt, acquittance, pledge, or other action required by the
state savings bank to be taken by the minor is binding upon the minor
with like effect as if he were of full age and legal capacity. The parent or
guardian of the minor shall not in his capacity as parent or guardian have
the power to attach or otherwise transfer a savings account issued to or in
the name of the minor. However, if the minor dies, the receipt or
acquittance of either parent or guardian of the minor is a valid and
sufficient discharge of the state savings bank for a sum not exceeding, in
the aggregate, two thousand five hundred dollars unless the minor had
given written notice to the state savings bank to accept the signature of the
parent or guardian for a larger sum.
Section 34-30-1630. (A)(1) When a deposit account is held in a state
savings bank in the names of two or more persons, whether minor or
adult, so that the monies in the account are payable to either of the
survivor or survivors, then, in the absence of fraud or undue influence, the
account and all additions to it are the property of the persons as joint
tenants. The opening of the account in this form, in the absence of fraud
or undue influence, is conclusive evidence in any action or proceeding to
which either the state savings bank or the survivor or survivors is a part
of the intention of all the parties to the account to vest title to the account
and the additions to it in the survivor or survivors. The state savings bank
is not subject to liability for fraud or undue influence if it complies with
the provisions of this paragraph.
(2) Except as provided in item (3), the monies in the account may
be paid to or on order of any one of the joint tenants during his lifetime
or to or on the order of any of the survivors of them after the death of any
of them, and the name of the joint tenant may be deleted from the account
on the written direction to the state savings bank of any other joint tenant.
(3) By written instructions given to the state savings bank by all of
the joint tenants of an account, either the signature of more than one of the
joint tenants during their lifetime or more than one of the survivors after
the death of any of them may be required on any check, receipt, or
withdrawal order, or the deletion of the name of a joint tenant from the
account may be allowed only on the written direction of certain specified
tenants. The state savings bank must pay the monies in the account or
allow deletions to it, or both, only in accordance with these instructions,
except that no instruction may limit the right of the survivor or survivors
to receive the money in the account.
(4) Payment of all or some of the monies in this account or deletion
of the name of an account holder as provided in this subsection discharges
the state savings bank from liability with respect to the monies paid or
names deleted until receipt by the state savings bank of a written notice
from one of the joint tenants directing the state savings bank not to permit
withdrawals or deletions in accordance with the terms of the account or
the instructions. After receipt of the notice, the state savings bank may
refuse, without liability, to honor any check, receipt, or withdrawal order,
or deletion request on the account pending determination of the rights of
the parties. No state savings bank paying a survivor in accordance with
the provisions of this section is liable for estate, inheritance, or succession
taxes which may be due this State.
(B) A state savings bank may accept deposits in the name of any
administrator, executor, custodian, conservator, guardian, trustee, or other
fiduciary for a named beneficiary or beneficiaries. The withdrawal value
of an account and its earnings or other rights relating to it may be paid or
delivered, in whole or in part, to the fiduciary without regard to a notice
to the contrary so long as the fiduciary is living. The payment or delivery
to a fiduciary or a receipt or acquittance signed by a fiduciary to whom a
payment or a delivery of rights is made is a valid and sufficient release
and discharge of a state savings bank for the payment or delivery. When
a person holding an account in a fiduciary capacity dies and no written
notice of the revocation or termination of the fiduciary relationship has
been given to the state savings bank and the state savings bank has no
written notice of other disposition of the beneficial estate, the withdrawal
value of the account and its earnings, or other rights relating to it, may be
paid or delivered, at the option of the state savings bank in whole or in
part, to the beneficiary or beneficiaries. When an account is opened by
a person describing himself in opening the account as trustee for another
and no other or further notice of the existence and terms of a legal and
valid trust is given in writing to the state savings bank, if the person who
described himself as trustee dies, the withdrawal value of the account or
any part of it and its earnings may be paid to the person for whom the
account was described to have been opened. The payment or delivery to
a beneficiary, beneficiaries, or designated person, or a receipt of
acquittance signed by a beneficiary, beneficiaries, or designated person,
is for a payment or delivery a valid and sufficient release and discharge
of a state savings bank for the payment or delivery. A state savings bank
paying a fiduciary, beneficiary, or designated person in accordance with
the provisions of this section is not liable for estate, inheritance, or
succession taxes which may be due this State.
(C) When a deposit account is held in a state savings bank by a person
who becomes incompetent and an adjudication of incompetency has been
made by a court of competent jurisdiction, the state savings bank may pay
or deliver the withdrawal value of the account and its earnings to the
conservator for the person upon proof of his appointment and
qualification; but if the state savings bank receives no written notice and
is not on actual notice that the account holder has been adjudicated
incompetent, it may pay or deliver the funds to the holder in accordance
with the provisions of the savings account contract, and the receipt or
acquittance of the holder is a valid and sufficient release and discharge of
the state savings bank for the payment or delivery.
(D) When a deposit account is held in a state savings bank by a person
residing in another state or country, the account with its additions and
earnings, or any part of it, is exempt from taxation otherwise imposed by
this State and may be paid to the administrator or executor appointed in
the state or country where the account holder resided at the time of death;
provided, the administrator or executor has furnished the state savings
bank:
(1) an authenticated copy of his letters and of the order of the court
which issued the letters to him authorizing him to collect, receive, and
remove the personal estate;
(2) an affidavit by the administrator or executor that to his
knowledge no letters of administration are outstanding in this State and
no petition for letters of administration by an heir, legatee, devisee, or
creditor of the decedent is pending on the estate in this State; and
(3) that there are no creditors of the estate in this State.
Upon payment or delivery to the representatives after receipt of the
affidavit and authenticated copies, the state savings bank is released and
discharged to the same extent as if the payment or delivery had been made
to a legally qualified resident, executor, or administrator, and is not
required to see to the application or disposition of the property. An action
at law or in equity may not be maintained against the state savings bank
for payment made in accordance with this section.
Section 34-30-1640. A state savings bank or federal savings institution
may continue to recognize the authority of an attorney-in-fact authorized
in writing to manage or to make withdrawals either in whole or in part
from a deposit account for an account holder, whether minor or adult,
until it receives written notice or is on actual notice of the revocation of
his authority. For the purposes of this section, written notice of the death
or adjudication of incompetency of the account holder constitutes written
notice of revocation of the authority of his attorney. A state savings bank
is not liable for damages, penalty, or tax by reason of payment made
pursuant to this section.
Section 34-30-1650. The pledge or hypothecation to a state savings
bank of all or part of a savings account in joint tenancy by any tenant or
tenants, whether minor or adult, upon whose signature or signatures
withdrawals may be made from the account is, unless the terms of the
savings account provide specifically to the contrary, a valid pledge and
transfer to the state savings bank of that part of the account pledged or
hypothecated, and does not operate to sever or terminate the joint and
survivorship ownership of all or part of the account.
Section 34-30-1660. Notice to a state savings bank of an adverse claim
to a deposit account on the books of the state savings bank to the credit of
a person does not cause the state savings bank to recognize the adverse
claimant unless the adverse claimant also either:
(1) procures a restraining order, injunction, or other appropriate
process against the state savings bank from a court in a case instituted by
him in which the person to whose credit the account stands is made a
party and served with process; or
(2) executes to the state savings bank, in a form and amount and with
sureties acceptable to it, a bond indemnifying the state savings bank from
and against all liability, loss, damage, costs, and expenses, for and on
account of the payment of the adverse claim or the dishonor of a draft or
other order by the person to whose credit the account stands on the books
of the state savings bank.
Section 34-30-1670. (A) A state savings bank reserves the right to
require a fourteen-day advance notice of intention to withdraw from
savings accounts not having a fixed or minimum term of at least fourteen
days or a prior notice-of-withdrawal requirement of at least fourteen days.
(B) Unless otherwise specified in its articles of incorporation, when a
state savings bank cannot pay withdrawal requests within fourteen days
of the date of receipt of written requests in the order received, it must
proceed in the following manner:
(1) requests must be paid in numerical order as filed with the state
savings bank and, as each number is reached, the account holder must be
paid the lesser of one thousand dollars or the amount of the withdrawal
request. If the amount of the request is not paid in full, the request must
be renumbered, placed at the end of the list of requests, and acted upon in
the same way when its new number is reached, until the request is paid in
full. However, when a request is reached for payment, the state savings
bank shall notify the account holder by registered mail at his last address
as recorded on the state savings bank's books and, unless the holder within
fourteen days from the mailing of the notice applies in person or in
writing for payment, the request must be canceled and not paid.
Regardless of other provisions in this section, the board of directors may
pay on an equitable basis an amount not exceeding two hundred dollars
to an account holder in a calendar month;
(2) The state savings bank shall allot to the payment of the
withdrawal requests the remainder of the state savings bank's receipts
from all sources after deducting amounts for expenses, required payments
on indebtedness, earnings distributable in cash to holders of savings
accounts, and a fund for general corporate purposes of not more than
twenty percent of the state savings bank's receipts from its account
holders and its borrowers.
(C) A state savings bank may compute earnings on amounts
withdrawn from its insured accounts having an indefinite term during the
last three business days of a period for which earnings are distributable as
if the withdrawal had been made immediately after the close of that
period.
Section 34-30-1680. When funds are on hand and adequate for that
purpose, a state savings bank may redeem by lot or otherwise, as the
board of directors may determine, all or a part of its savings accounts by
giving fourteen days' notice addressed to each affected account holder at
his last address as recorded on the books of the state savings bank. A
state savings bank may not redeem its savings accounts when the state
savings bank is in an impaired condition or when it has applications for
withdrawal which have been on file for more than thirty days and have
not been reached for payment. The redemption price of savings accounts
redeemed must be the full value of the account redeemed, as determined
by the board of directors, but not less than the withdrawal value. If this
notice of redemption has been given, and if on or before the redemption
date the funds necessary for the redemption have been set aside so as to
be available, earnings upon the accounts called for redemption cease to
accrue from and after the earnings date specified as the redemption date,
and all rights with respect to these accounts terminate after the redemption
date, except the right of an account holder of the record to receive the
redemption price without interest. All savings account evidences of
ownership for former savings accounts which have been validly called for
redemption must be tendered for payment within ten years from the date
of redemption designated in the redemption notice; otherwise they must
be canceled and the funds set aside for this account become the property
of the State and all claims of the former account holders against the state
savings bank are barred forever. In the alternative, the state savings bank
may remit to the holder of record, at the address provided for on the books
of the savings bank, payment in respect to a redeemed account, and the
account then may be closed.
Section 34-30-1690. (A) Administrators, executors, custodians,
personal representatives, conservators, guardians, trustees, and other
fiduciaries of every kind and nature, insurance companies, business and
manufacturing companies, banks, trust companies, credit unions, and
other similar types of financial organizations, charitable, educational,
eleemosynary, and public corporations, funds and organizations,
municipalities and other public corporations and governmental bodies and
public officials specifically are authorized and empowered to invest funds
held by them, without order of a court, in deposit accounts of state savings
banks which are under state supervision and in deposit accounts of federal
savings institutions organized under the laws of the United States and
under federal supervision, and these investments are legal investments for
these funds. However, the investment of public funds is subject to the
same requirements relating to the deposit and pledge of securities to
secure these investments as is provided by law or regulation with respect
to the deposit of these funds in banks, except to the extent that these
savings accounts may be insured.
(B) When a deposit of securities is required, the savings account and
accounts made legal investments by this section are acceptable for these
deposits to the extent the savings accounts and accounts made legal by
this section are insured. When a bond is required with security, the bond
may be furnished and the savings accounts and accounts made legal
investments by this section in the amount of the bond when deposited
therewith are acceptable as security without other security.
(C) The provisions of this section are supplemental to other laws
relating to and declaring what are legal investments for the individuals,
fiduciaries, corporations, organizations, funds, municipalities,
governmental bodies, and officials referred to in this section and are
supplemental to the laws relating to the deposit of securities and the
making and filing of bonds.
Section 34-30-1700. Notwithstanding other law, a state savings bank
may charge and collect a processing fee for checks on which payment has
been refused by the payor depository institution. A state savings bank also
may collect a processing fee for checks drawn on that state savings bank
with respect to an account with insufficient funds.
Section 34-30-1720. The owner of a deposit account may transfer the
owner's rights absolutely or conditionally to another person eligible to
hold it, but the transfer may be made on the books of the state savings
bank only upon presentation of evidence of transfer satisfactory to the
state savings bank, and accompanied by the proper application for transfer
by the transferor and transferee. The transferee shall accept the account
subject to the terms and conditions of the account contract, the bylaws of
the state savings bank, the articles of incorporation of the state savings
bank, and all rules or regulations of the board. Notwithstanding the
effectiveness of a transfer between the parties, the state savings bank may
treat the holder of record of a deposit account as the owner of the deposit
account for all purposes, including payment and voting, in the case of a
mutual state savings bank, until the state savings bank records the transfer
and assignment.
Section 34-30-1730. A state savings bank, in its articles of
incorporation or in its bylaws, may authorize the board of directors to
borrow money, and the board of directors, by resolution adopted by a vote
of at least two-thirds of the entire board duly recorded in the minutes, may
authorize the officers of the savings bank to borrow money for the savings
bank on terms and conditions as the board considers proper.
Section 34-30-1740. A state savings bank may subscribe to the capital
stock and become a member of a federal reserve bank. A state savings
bank shall continue to be subject to the supervision and examination
required by the laws of this State, except that the Federal Reserve Board
shall have the right, if necessary, to make examinations. The board may
disclose to the Federal Reserve Board, or to the examiners duly appointed
by it, all information in reference to the affairs of a state savings bank that
has become, or desires to become, a member of a federal reserve bank.
Section 34-30-1750. A state savings bank and its holding company
shall have the same powers to acquire and be acquired as a state bank and
its holding company as provided in Chapter 25 of Title 34.
Article 9
Holding Companies
Section 34-30-1950. (A) Notwithstanding other law, a stock state
savings bank, simultaneously with its incorporation or conversion to a
stock state savings bank or after, may provide for its ownership by a
holding company. In the case of a conversion, members of the converting
state savings bank may purchase capital stock of the holding company
instead of capital stock of the converted state savings bank in accordance
with Section 34-30-330(C)(6).
(B) Notwithstanding other law, a stock state savings bank may
reorganize its ownership to provide for ownership by a holding company,
upon adoption of a plan of reorganization by a favorable vote of not less
than two-thirds of the members of the board of directors of the state
savings bank and approval of the plan of reorganization by the holders of
not less than a majority of the issued and outstanding shares of stock of
the state savings bank.
(C) Notwithstanding other law, a mutual state savings bank, with
approval of the board, may reorganize its ownership to provide for
ownership by a mutual holding company upon adoption of a plan of
reorganization by favorable vote of not less than two-thirds of the
members of the board of directors of the state savings bank and approval
of the plan of reorganization by a majority of the voting members of the
state savings bank. The plan of reorganization must provide that:
(1) the resulting ownership of one or more subsidiary state savings
banks is evidenced by stock shares owned directly by the mutual holding
company or by the mutual holding company through one or more
subsidiaries;
(2) the substantial portion of the assets and all of the insured
deposits, and part or all of the other liabilities are transferred, by way of
merger or otherwise, to one or more subsidiary state savings banks;
(3) the reorganization is not subject to state or federal income
taxation; and
(4) the plan of reorganization is fair and equitable to all members
of the state savings bank.
The mutual holding company may be organized by a method approved
by the board. The articles of incorporation of the mutual holding company
must confer on the depositors and borrowers of the reorganizing mutual
state savings bank the same rights in the mutual holding company that
they had in the mutual savings bank. For so long as the mutual holding
company is in existence, the mutual holding company must own at least
a majority of the voting stock of the state savings bank, or at least a
majority of the voting stock of a company owning all of the voting stock
of the state savings bank.
(D) A holding company, including a mutual holding company, may
invest in an investment authorized by its board of directors, except as
limited by regulations adopted by the board under this article.
(E) An entity that controls a stock state savings bank, or acquires
control of a stock state savings bank, is a holding company.
Section 34-30-1960. A company or person may not acquire control of
a state savings bank or its holding company without the prior approval of
the board. Holding companies for state savings banks are under the
supervision of the board. The board shall exercise all powers and
responsibilities with respect to holding companies which the board
exercises with respect to state savings banks. The board may adopt rules
or regulations, definitions, and forms as necessary for the supervision and
regulation of holding companies for and persons seeking to acquire
control of a state savings bank and for the protection of the public
investing in state savings bank holding companies including, without
limitation, with respect to presumptions of control."
Time effective
SECTION 2. This act takes effect upon approval by the
Governor.
Approved the 10th day of June, 1997. |