H*4566 Session 110 (1993-1994)
H*4566(Rat #0592, Act #0491) General Bill, By Jennings, Alexander, Askins,
J.M. Baxley, D.W. Beatty, Boan, G. Brown, H. Brown, C.D. Chamblee, Cobb-Hunter,
R.S. Corning, R.C. Fulmer, Harrell, P.B. Harris, Harrison, B.H. Harwell,
J. Hines, T.E. Huff, Inabinett, W.D. Keyserling, M.H. Kinon, J.G. McAbee,
Moody-Lawrence, Neilson, Richardson, J.S. Shissias, R. Smith, J.J. Snow,
Spearman, Stuart, C.L. Sturkie, P.H. Thomas, J.W. Tucker, D.C. Waldrop,
J.B. Wilder, Wilkins and Young-Brickell
Similar(S 1078)
A Bill to amend Chapter 24 of Title 34, Code of Laws of South Carolina, 1976,
relating to the South Carolina Bank Holding Company Act, so as to revise and
further provide for definitions and regulatory provisions and procedures in
order to permit after a specified date an out-of-state bank holding company to
operate and make acquisitions in this State in the same manner that a southern
region bank holding company is permitted to operate and make acquisitions.
01/19/94 House Introduced and read first time HJ-30
01/19/94 House Referred to Committee on Labor, Commerce and
Industry HJ-30
02/16/94 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-16
03/23/94 House Amended HJ-49
03/23/94 House Debate interrupted HJ-49
03/24/94 House Objection by Rep. Cromer HJ-17
03/24/94 House Amended HJ-17
03/24/94 House Read second time HJ-22
03/24/94 House Roll call Yeas-085 HJ-22
03/29/94 House Read third time and sent to Senate HJ-14
03/29/94 House Roll call Yeas-078 HJ-15
03/30/94 Senate Introduced, read first time, placed on calendar
without reference SJ-14
04/19/94 Senate Amended SJ-47
05/04/94 Senate Special order SJ-29
05/19/94 Senate Read second time SJ-48
05/19/94 Senate Ordered to third reading with notice of
amendments SJ-48
05/26/94 Senate Special order SJ-116
05/27/94 Senate Debate interrupted SJ-35
05/31/94 Senate Amended SJ-15
05/31/94 Senate Read third time and returned to House with
amendments SJ-16
06/02/94 House Concurred in Senate amendment and enrolled HJ-47
06/02/94 Ratified R 592
07/14/94 Signed By Governor
07/14/94 Effective date 07/14/94
07/26/94 Copies available
(A491, R592, H4566)
AN ACT TO AMEND CHAPTER 24 OF TITLE 34, CODE OF
LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE SOUTH
CAROLINA BANK HOLDING COMPANY ACT, SO AS TO REVISE
AND FURTHER PROVIDE FOR DEFINITIONS AND REGULATORY
PROVISIONS AND PROCEDURES IN ORDER TO PERMIT AFTER A
SPECIFIED DATE AN OUT-OF-STATE BANK HOLDING COMPANY
TO OPERATE AND MAKE ACQUISITIONS IN THIS STATE IN THE
SAME MANNER THAT A SOUTHERN REGION BANK HOLDING
COMPANY IS PERMITTED TO OPERATE AND MAKE
ACQUISITIONS.
Be it enacted by the General Assembly of the State of South Carolina:
Out-of-state bank holding company operating and making acquisitions
in this State
SECTION 1. Chapter 24 of Title 34 of the 1976 Code is amended to
read:
"CHAPTER 24
South Carolina Bank Holding Company Act
Section 34-24-10. This chapter may be cited as `The South Carolina
Bank Holding Company Act'.
Section 34-24-20. As used in this chapter the term:
(1) `Acquire', as applied to a bank holding company, means any of the
following actions or transactions:
(a) the merger or consolidation of the bank holding company with
another bank holding company;
(b) the acquisition of the direct or indirect ownership or control of
voting shares of another bank holding company or bank if, after the
acquisition, the bank holding company will directly or indirectly own or
control more than five percent of any class of voting shares of the bank
holding company or bank;
(c) the direct or indirect acquisition of all or substantially all of the
assets of another bank holding company or bank; or
(d) the taking of any other action that would result in the direct or
indirect control of another bank holding company or bank.
(2) `Bank' has the meaning set forth in Section 2(c) of the Bank
Holding Company Act of 1956, as amended (12 U.S.C. 1841(c)).
(3) `Banking office' means any office at which a bank accepts deposits.
The term banking office does not include:
(a) unmanned automatic teller machines, point-of-sale terminals, or
other similar unmanned electronic banking facilities at which deposits may
be accepted;
(b) offices located outside the United States; or
(c) loan production offices, representative offices, or other offices at
which deposits are not accepted.
(4) `Bank holding company' means any company which is a bank
holding company under Section 2(a) of the federal Bank Holding Company
Act of 1956, as amended, 12 U.S.C. Section 1841(a).
(5) `Board' means the State Board of Financial Institutions.
(6) `Company' means any corporation, partnership, business trust,
association, or similar organization or any other trust unless by its terms it
shall terminate within twenty-five years or not later than twenty-one years
and ten months after the death of individuals living on the effective date of
the trust, but does not include any corporation the majority of the shares of
which are owned by the United States or by any state.
(7) `Control' means that which is set forth in Section 2 of the federal
Bank Holding Company Act of 1956, as amended, 12 U.S.C. Section
1841.
(8) `Deposits' means, with respect to a bank, all demand, time, and
savings deposits of individuals, partnerships, corporations, the United
States government, states and political subdivisions in the United States,
and other entities, exclusive of deposits (a) by foreign governments and
official institutions, (b) by banks, (c) in foreign banking offices, and (d) in
its Edge Act bank subsidiaries organized pursuant to Section 25 or Section
25(a) of the Federal Reserve Act, as amended, 12 U.S.C. Section 601 or
Sections 611 through 631. Determinations of deposits must be made by
reference to the most recent available regulatory reports of condition or
similar reports filed by the bank with state or federal regulatory
authorities.
(9) `Principal place of business' of a bank holding company means the
state in which the aggregate deposits of the bank subsidiaries of the bank
holding company were the largest on July 1, 1966, or the date on which the
company became a bank holding company, whichever is later.
(10) `South Carolina bank' means a bank organized under the laws of
the State of South Carolina or of the United States and, in either event,
having banking offices located only in the State of South Carolina.
(11) `South Carolina bank holding company' means a bank holding
company that:
(a) has its principal place of business in the State of South Carolina;
and
(b) is not controlled by a bank holding company other than a South
Carolina bank holding company.
(12) `Out-of-state bank holding company' means a bank holding
company that is not a South Carolina bank holding company.
(13) `Southern Region states' means the states of Alabama, Arkansas,
Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North
Carolina, South Carolina, Tennessee, Virginia, West Virginia, and the
District of Columbia.
(14) `Southern Region bank' means a bank other than a South Carolina
bank organized under the laws of one of the Southern Region states or of
the United States and, in either event, having banking offices only in the
Southern Region states.
(15) `Southern Region bank holding company' means a bank holding
company that:
(a) is not a South Carolina bank holding company;
(b) has total deposits of its Southern Region bank subsidiaries and
South Carolina bank subsidiaries that exceed a majority of the total
deposits of all bank subsidiaries of the bank holding company other than
those bank subsidiaries held under subsection (a) of Section 34-24-60;
and
(c) is not controlled by a bank holding company other than a Southern
Region bank holding company.
(16) `State' means one of the states of the Union and the District of
Columbia.
(17) `Subsidiary' means that which is set forth in Section 2 of the
federal Bank Holding Company Act of 1956, as amended, 12 U.S.C.
Section 1841.
Section 34-24-30. With the prior approval of the board in accordance
with Section 34-24-50 and upon receipt of approval from all other
applicable state and federal regulatory authorities having approval authority
over the transaction:
(1) a company may become a South Carolina bank holding
company;
(2) a South Carolina bank holding company may acquire a South
Carolina bank or another South Carolina bank holding company;
(3) a South Carolina bank holding company may acquire a Southern
Region bank or a Southern Region bank holding company;
(4) a South Carolina bank holding company may acquire a bank or
bank holding company having banking offices which are located outside
the Southern Region as authorized under subsection (b) of Section
34-24-60;
(5) a Southern Region bank holding company or an out-of-state-bank
holding company may acquire a South Carolina bank or a South Carolina
bank holding company; and
(6) a Southern Region bank holding company or an out-of-state-bank
holding company may acquire a Southern Region bank holding company
having a South Carolina bank subsidiary or an out-of-state-bank holding
company having a South Carolina bank subsidiary.
Section 34-24-40. Without any prior approval of the board, a Southern
Region bank holding company having a South Carolina bank subsidiary or
an out-of-state-bank holding company having a South Carolina bank
subsidiary may acquire a Southern Region bank holding company that does
not have a South Carolina bank subsidiary, may acquire a Southern Region
bank, or to the extent authorized by subsection (b) of Section 34-24-60 may
acquire a bank or bank holding company having banking offices which are
located outside the Southern Region.
The Southern Region bank holding company or an out-of-state-bank
holding company having a South Carolina bank subsidiary shall notify the
board at least thirty days prior to the consummation of the proposed
transaction. The notification requirements of this section are satisfied by
furnishing the board with a copy of the completed application or
applications seeking approval for the proposed transaction which are filed
with the federal bank regulatory authority or authorities.
Section 34-24-50. (a) The board may not approve any proposed
transaction set forth in Section 34-24-30:
(1) which would result in a monopoly, or which would be in
furtherance of any combination or conspiracy to monopolize or to attempt
to monopolize the business of banking in this State; or
(2) whose effect in this State may be substantially to lessen
competition, or to tend to create a monopoly, or which in any other manner
would be in restraint of trade, unless the board finds that the
anticompetitive effects of the proposed transaction are clearly outweighed
in the public interest by the probable effect of the transaction in meeting the
convenience and needs of the community to be served; and
(3) which does not meet the requirements set forth in subsection (d) of
this section, if applicable.
In every case, the board shall take into consideration the financial and
managerial resources and future prospects of the company and the banks
concerned and the convenience and needs of the communities to be served.
Whenever the transaction must be approved by one or more regulatory
agencies of the United States Government under criteria substantially
similar to the criteria in this subsection, the board shall delay its
determination until after receipt of the ruling by the applicable federal
regulatory agencies and if the proposed transaction is approved, then the
approval is conclusive on the board with respect to the criteria unless the
board finds that the determination made by the federal regulatory agency is
not supported by evidence that is substantial when viewed in light of the
whole record considered by the federal agency. In the event the board
denies the application under this subsection, it shall issue a ruling stating
the specific reasons why it disagrees with the approval determination made
by the applicable federal regulatory agency. The board in considering an
application shall receive and must consider community input through
public hearings to be heard concurrently with the hearings held by the
Federal Reserve Board.
(b) Before July 1, 1996, whenever an application is filed by a Southern
Region bank holding company not having a South Carolina bank subsidiary
(other than a South Carolina bank acquired pursuant to Section 34-24-60)
to acquire either a South Carolina bank, a South Carolina bank holding
company, or a Southern Region bank holding company having a South
Carolina bank subsidiary, the board shall approve the application if the
proposed transaction is approved under subsection (a).
(c) On and after July 1, 1996, an out-of-state bank holding company
that does not have a South Carolina bank subsidiary (other than a South
Carolina bank subsidiary that was acquired either in a transaction involving
the provision of assistance by the Federal Deposit Insurance Corporation or
in the regular course of securing or collecting a debt previously contracted
in good faith, as provided in Section 3(a) of the Bank Holding Company
Act of 1956, as amended, (12 U.S.C. 1842(a)) may acquire a South
Carolina bank holding company or a South Carolina bank with the approval
of the board if the proposed transaction is approved under subsection
(a).
(d) Where a Southern Region bank holding company or an out-of-state
bank holding company seeking board approval or an acquisition pursuant to
subsection (a) of this section, such application shall be approved by the
board only if:
(1) the laws of the state in which the Southern Region bank holding
company or the out-of-state bank holding company filing the application
has its principal place of business permit South Carolina bank holding
companies to acquire banks and bank holding companies in that state;
(2) any conditions, restrictions, and requirements (other than
regulations or requirements relating to the procedural steps necessary for
approval of acquisitions) that would apply to the acquisition by a South
Carolina bank holding company of a bank or bank holding company in the
state where the Southern Region bank holding company or the out-of-state
bank holding company has its principal place of business, which would not
apply to acquisitions by bank holding companies all of whose banking
subsidiaries are located in that state must be applicable to the transaction
proposed by the Southern Region bank holding company or the out-of-state
bank holding company filing the application; and
(3) each South Carolina bank sought to be acquired directly or
indirectly in the proposed transaction has been in existence and
continuously operated as a bank for a period of five years or more prior to
the date the application for approval of the transaction was filed with the
board. This requirement does not prohibit a Southern Region bank holding
company or the out-of-state bank holding company from acquiring all or
substantially all of the shares of a South Carolina bank organized solely for
the purpose of facilitating the acquisition of a South Carolina bank that has
been in existence and continuously operated as a bank for the requisite
five-year period.
(e) The board shall rule on any application requiring approval under
this section not later than ninety days following the date of submission of a
completed application seeking approval of the proposed transaction. If the
board fails to rule on the application within the requisite ninety-day period,
the proposed transaction is approved. Whenever the board is required to
delay its ruling until after a ruling on the approval of the application by one
or more federal regulatory agencies pursuant to subsection (a), the board
shall rule on the application within thirty days following the receipt of the
federal ruling, and if the board fails to rule on the application within this
thirty-day period, the proposed transaction is approved.
(f) The applicant is entitled to notice and a hearing contesting the
denial by the board of any application.
Section 34-24-60. (a) A Southern Region Bank, a Southern Region
bank holding company, a South Carolina bank, or a South Carolina bank
holding company may acquire or control, and does not cease to be a
Southern Region bank, Southern Region bank holding company, South
Carolina bank, or South Carolina bank holding company, respectively, by
virtue of its acquisition or control of the institutions described in items (1)
through (3):
(1) a bank having offices in a state other than a Southern Region state,
if the acquisition has been consummated in a transaction involving the
provision of assistance by the Federal Deposit Insurance Corporation;
(2) a bank having banking offices in a state other than a Southern
Region state, if the acquisition has been consummated in the regular course
of securing or collecting a debt previously contracted in good faith, as
provided in Section 3(a) of the federal Bank Holding Company Act of
1956, as amended, 12 U.S.C. Section 1842(a), and if the bank or bank
holding company divests the securities or assets acquired within two years
of the date of acquisition. A South Carolina bank, a South Carolina bank
holding company, or a Southern Region bank holding company controlling
a South Carolina bank may retain the interests for up to three additional
periods of one year each if the board determines that the required
divestiture would create undue financial difficulties for the bank or bank
holding company; or
(3) a bank organized under the laws of the United States or of any
state and operating under Section 25 or Section 25(a) of the Federal
Reserve Act, as amended, 12 U.S.C. Section 601 or Sections 611 through
631, or a bank or bank holding company organized under the laws of a
foreign country that is principally engaged in business outside the United
States and which either has no banking office in the United States or has
banking offices in the United States that are engaged only in operating
under Section 25 or 25(a) of the Federal Reserve Act, as amended, 12
U.S.C. Section 601 or Sections 611 through 631.
(b) A South Carolina bank holding company, a Southern Region bank
holding company having a South Carolina bank subsidiary or the
out-of-state bank holding company having a South Carolina bank
subsidiary may also acquire a bank or bank holding company other than as
expressly permissible under subsection (a) of this section or under Section
34-24-30 or 34-24-40 if:
(1) immediately following the consummation of the acquisition, the
South Carolina bank holding company, Southern Region bank holding
company or the out-of-state bank holding company qualifies as such under
the definitional tests provided in item (11), (12), or (15) of Section
34-24-20; and
(2) the South Carolina bank holding company, Southern Region bank
holding company, or out-of-state bank holding company complies with the
requirements of Section 34-24-30 or 34-24-40, as appropriate, which
sections are expressly applicable to any acquisition.
Section 34-24-70. Except as specifically permitted by this article or
federal law, no South Carolina bank holding company, Southern Region
bank holding company, or out-of-state bank holding company may acquire
a South Carolina bank holding company or a South Carolina bank.
Section 34-24-80. Any Southern Region bank holding company or
out-of-state bank holding company that directly or indirectly acquires a
South Carolina bank or South Carolina bank holding company is subject to
all the laws of this State relating to the acquisition, ownership, and
operation of banks and bank holding companies as are otherwise applicable
to South Carolina banks and South Carolina bank holding companies.
Section 34-24-90. (a) Each South Carolina bank holding company,
each out-of-state bank holding company acquiring a South Carolina bank or
a South Carolina bank holding company or a Southern Region bank
holding company having a South Carolina bank subsidiary or an
out-of-state bank holding company having a South Carolina bank
subsidiary, and each Southern Region bank holding company controlling a
South Carolina bank that engages in a transaction which requires approval
of the board pursuant to Section 34-24-30 shall within thirty days after
approval of the transaction initially register and file annually with the board
on forms prescribed by the board which shall include the information with
respect to the financial condition and operations, management, and
intercompany relationships of the bank holding company and its
subsidiaries, and related matters, as the board may consider necessary or
appropriate to carry out the purposes of this chapter.
(b) The board, from time to time, may require reports under oath to
keep it informed as to whether the provisions of this chapter and the
regulations and orders issued under this chapter have been complied with
and the board may make examinations of each bank holding company
required to be registered pursuant to subsection (a) of this section and to the
extent authorized by law each subsidiary thereof, the cost of which must be
assessed against and paid by the holding company.
(c) The board may enter into cooperative and reciprocal agreements
with the bank regulatory authorities of any state for the periodic
examination of bank holding companies that are required to be registered
under this chapter and may accept reports of examination and other records
from the authorities in lieu of conducting its own examinations. The board
may enter into joint actions with other regulatory bodies having concurrent
jurisdiction or may enter into the actions independently to carry out its
responsibilities under this chapter and assure compliance with the laws of
this State.
(d) Any bank holding company that has a South Carolina bank
subsidiary that is not otherwise organized under the laws of this State or
qualified to do business in this State shall advise the board of the location
of the name and address of its resident agent located in South Carolina who
is authorized to accept service of process on its behalf and shall promptly
advise the board of any changes in the office and service of process agent it
has filed with the board.
(e) The board may establish regulations as it considers necessary to
carry out the purposes of this chapter.
Section 34-24-100. (a) Any company which knowingly violates any
provision of this chapter, or any regulation or order issued by the board
pursuant to this chapter must, upon conviction, be fined not more than one
hundred dollars for each day during which the violation continues. Any
individual who wilfully participates in a violation of this chapter, or any
regulation, or order of the board issued pursuant to this chapter must, upon
conviction, be fined not more than five thousand dollars. Any officer,
director, agent, or employee of a bank holding company or subsidiary
thereof who makes any false entry in any book, report, record, or statement
of the company or subsidiary with the intent to deceive, or who, with like
intent wilfully omits to make a true entry of any material pertaining to the
business of the company or subsidiary in any book, report, record, or
statement of the company or subsidiary, made or kept by him or under his
direction, is guilty of a misdemeanor and, upon conviction, must be fined
not more than ten thousand dollars or imprisoned not more than one year,
or both.
(b) In the event any bank holding company consummates an acquisition
that is prohibited by this chapter, the commissioner shall require the bank
holding company to divest itself within two years of its direct or indirect
ownership or control of all South Carolina banks. In addition, the
commissioner has the power to enforce any other requirements or
prohibitions in this chapter by requiring divestitures of nonconforming
banks, bank holding companies, or assets, or through the exercise of other
remedies as are provided in this title or otherwise by law including, but not
limited to, injunctive or other judicial actions."
Time effective
SECTION 2. This act takes effect upon approval by the Governor.
Approved the 14th day of July, 1994. |