Bill Text: MI SB0008 | 2009-2010 | 95th Legislature | Introduced

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Bill Title: Financial institutions; banks; location of branches or ATM's near commercial affiliates; restrict. Amends secs. 1201, 1202 & 3711 of 1999 PA 276 (MCL 487.11201 et seq.).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2009-01-14 - Referred To Committee On Banking And Financial Institutions [SB0008 Detail]

Download: Michigan-2009-SB0008-Introduced.html

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SENATE BILL No. 8

 

 

January 14, 2009, Introduced by Senator GLEASON and referred to the Committee on Banking and Financial Institutions.

 

 

 

     A bill to amend 1999 PA 276, entitled

 

"Banking code of 1999,"

 

by amending sections 1201, 1202, and 3711 (MCL 487.11201,

 

487.11202, and 487.13711).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1201. As used in this act:

 

     (a) "Administrative expense" means any of the following:

 

     (i) An expense designated as an administrative expense by this

 

act or the court.

 

     (ii) Court costs and expenses of operation and liquidation of a

 

bank.

 

     (iii) Current wages paid to an employee of a bank whose services

 

are retained by the receiver for services rendered after the date

 

the bank is ordered in receivership.

 

     (iv) An unpaid expense of supervision or conservatorship of a

 

bank.

 

     (v) Unpaid fees or assessments owed to the bureau.

 

     (b) "Administrative procedures act of 1969" means the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328.

 

     (c) "Affiliate" means a corporation, business trust, limited

 

liability company, or similar organization to which any of the

 

following apply:

 

     (i) An organization, directly or indirectly, owns or controls

 

either a majority of its voting shares or more than 50% of the

 

number of shares voted for the election of its directors, trustees,

 

or other persons exercising similar functions at the preceding

 

election, or controls in any manner the election of a majority of

 

its directors, trustees, or other persons exercising similar

 

functions.

 

     (ii) Control of the organization is held, directly or

 

indirectly, through either of the following:

 

     (A) Stock ownership or in any other manner, by the

 

shareholders or members of an organization who own or control a

 

majority of the shares of that organization, a majority ownership

 

interest in the organization, more than 50% of the number of shares

 

voted for the election of directors of that organization at the

 

preceding election, or more than 50% of the ownership vote for

 

election of directors of that organization at the preceding

 

election.

 

     (B) By trustees for the benefit of the shareholders or members

 

of that organization.

 

     (iii) A majority of its directors, trustees, or other persons

 

exercising similar functions constitute a majority of the

 

directors, trustees, or other persons exercising similar functions

 

of any 1 organization.

 

     (iv) The organization owns or controls, directly or indirectly,

 

either a majority of the shares of capital stock or other ownership

 

interest of an organization, or more than 50% of the number of

 

shares voted of the total ownership vote for the election of

 

directors of an organization at the preceding election, or controls

 

in any manner the election of a majority of the directors of an

 

organization, or for the benefit of whose shareholders or members

 

all or substantially all the capital stock or ownership interest of

 

an organization is held by trustees.

 

     (d) "Applicant" means a person making an application under

 

this act.

 

     (e) "Articles" means articles of incorporation, all amendments

 

to articles of incorporation, and agreements of consolidation and

 

merger.

 

     (f) "Association" means a federal savings association

 

organized under section 5 of the home owners' loan act, chapter 64,

 

48 Stat. 132, 12 U.S.C. USC 1464, or a savings and loan

 

association, building and loan association, or homestead

 

association that is organized under the laws of a state, the

 

District of Columbia, or a territory or protectorate of the United

 

States, and whose deposits are insured by the federal deposit

 

insurance corporation.

 

     (g) "Bank" means a state banking corporation organized or

 

reorganized under this act or organized under any law of this state

 

enacted before the effective date of this act, including a state

 

banking corporation that voluntarily limits its activities.

 

     (h) "Bank holding company" means a company as defined in the

 

bank holding company act that is not a bank or national banking

 

association and that is a bank holding company approved by the

 

board of governors of the federal reserve system under the bank

 

holding company act or that will become an approved bank holding

 

company before or upon the completion of a consolidation provided

 

in section 3706.

 

     (i) "Banking holding company act" means the federal bank

 

holding company act of 1956, chapter 240, 70 Stat. 133.

 

     (j) "Branch" means, except as otherwise provided in this

 

subdivision, a branch bank, branch office, branch agency,

 

additional office, or a branch place of business at which deposits

 

are received, checks paid, or money lent. The acceptance of

 

deposits in furtherance of a school thrift or savings plan by an

 

officer, employee, or agent of a bank at a school shall not be

 

construed as the establishment or operation of a branch. An

 

electronic funds transfer facility that is made available to 2 or

 

more depository institutions under Michigan law that regulates

 

electronic funds transfer facilities is not a branch. A trust

 

office of a bank is not a branch. A loan production office is not a

 

branch. An additional office of a state agency is not a branch. An

 

international banking facility as defined in 12 C.F.R. CFR

 

204.8(a)(1), as in effect December 31, 1982, is not a branch. The

 

receipt of deposits by a messenger service or the delivery by a

 

messenger service of items representing deposit account withdrawals

 

or of loan proceeds is not the establishment or operation of a

 

branch, whether or not the messenger service is owned or operated

 

by the bank. Branch does not include an agent acting under section

 

4101(1)(d).

 

     (k) "Bureau" means the financial institutions bureau of the

 

department of consumer and industry services office of financial

 

and insurance regulation of the department of energy, labor, and

 

economic growth.

 

     (l) "Capital" or "capital stock" means the stated par value of

 

issued and outstanding unimpaired common stock and the stated par

 

value of issued and outstanding unimpaired preferred stock. For

 

purposes of sections 4202, 4301, 4307, and 4308, "capital" and

 

"capital stock" shall also include outstanding capital notes,

 

debentures, and any other instrument of indebtedness issued under

 

section 3801.

 

     (m) "Cease and desist order which has become final" or "order

 

which has become final" means a cease and desist order or an order

 

issued by the commissioner with the consent of the institution or

 

the director or officer or other person concerned, or with respect

 

to which no petition for review of the action of the commissioner

 

has been filed and perfected in a circuit court as specified in

 

section 2310(2), or with respect to which the action of the court

 

in which the petition is filed is not subject to further review by

 

the courts of the state.

 

     (n) "Commercial activities" means activities in which a bank

 

holding company, financial holding company, national bank, or

 

subsidiary of a national bank may not engage under federal law.

 

     (o) (n) "Commissioner" means the commissioner of the financial

 

institutions bureau office of financial and insurance regulation.

 

     (p) (o) "Consolidate", "consolidated", "consolidating", and

 

"consolidation" include, respectively, consolidate or merge,

 

consolidated or merged, consolidating or merging, and consolidation

 

or merger.

 

     (q) (p) "Consolidated bank" means a bank that results from a

 

consolidation between a bank and 1 or more banks, out-of-state

 

banks, national banks, associations, or savings banks.

 

     (r) (q) "Consolidated organization" means an out-of-state

 

bank, national bank, association, or savings bank organized under

 

the laws of another state or the United States that results from a

 

consolidation of 1 or more banks, with 1 or more out-of-state

 

banks, national banks, associations, or savings banks.

 

     (s) (r) "Consolidating organizations" means any combination of

 

banks, out-of-state banks, national banks, associations, or savings

 

banks that have consolidated or are in the process of consolidation

 

as provided in section 3701 or 3702.

 

     (t) (s) "Depository institution" means a bank, out-of-state

 

bank, national bank, foreign bank branch, association, savings

 

bank, or credit union organized under the laws of this state,

 

another state, the District of Columbia, the United States, or a

 

territory or protectorate of the United States.

 

     (u) (t) "Dissolution" means the process by which a solvent

 

bank voluntarily ends its corporate existence by liquidating its

 

assets and winding up its affairs.

 

     (v) (u) "Dividend reinvestment plan" means a plan that is

 

offered solely to existing shareholders of the bank and which

 

allows the shareholders to reinvest dividends received under

 

section 3806 in stock of the bank and that may allow additional

 

cash amounts to be contributed by the shareholders participating in

 

the reinvestment plan.

 

     (w) (v) "Federal agency" means a foreign bank agency

 

established and operating under the international banking act of

 

1978.

 

     (x) (w) "Federal branch" means a foreign bank branch

 

established and operating under the international banking act of

 

1978.

 

     (y) (x) "Federal deposit insurance act" means the federal

 

deposit insurance act, chapter 967, 64 Stat. 873.

 

     (z) (y) "Federal home loan bank act" means the federal home

 

loan bank act, chapter 522, 47 Stat. 725.

 

     (aa) (z) "Federal reserve act" means the federal reserve act,

 

chapter 6, 38 Stat. 251.

 

     Sec. 1202. As used in this act:

 

     (a) "Financial institution" means an organization licensed,

 

chartered, or regulated by the financial institutions bureau office

 

of financial and insurance regulation under the laws of this state.

 

     (b) "Foreign bank" means an entity organized and recognized as

 

a bank under the laws of a foreign country that lawfully engages in

 

the business of banking and is not directly or indirectly owned or

 

controlled by United States citizens or by a corporation organized

 

under the laws of the United States. Foreign bank includes foreign

 

commercial banks, foreign merchant banks, and other foreign

 

institutions that engage in banking activities usual in connection

 

with the business of banking in the countries in which the foreign

 

institutions are organized.

 

     (c) "Foreign bank agency" means an office or place of business

 

of a foreign bank, established under this act, the international

 

banking act of 1978, or the laws of another state, that does not

 

exercise trust powers and at which deposits of citizens or

 

residents of the United States are not accepted.

 

     (d) "Foreign bank branch" means a place of business of a

 

foreign bank, located in any state, the District of Columbia, or a

 

territory, or protectorate of the United States, that is not a

 

foreign bank agency, bank, or out-of-state bank, at which deposits

 

are received and that is established and operating as a branch of a

 

foreign bank under this act, the international banking act of 1978,

 

or the laws of another state.

 

     (e) "Foreign country" means a country other than the United

 

States and includes a colony, dependency, or possession of a

 

country other than the United States.

 

     (f) "Incorporator" means a signer of the original articles of

 

incorporation.

 

     (g) "Institution" means a bank, state agency, or state foreign

 

bank branch operating or organized or reorganized under this act or

 

operating or organized under any law of this state enacted before

 

August 20, 1969.

 

     (h) "International banking act of 1978" means the

 

international banking act of 1978, Public Law 95-369. , 92 Stat.

 

607.

 

     (i) "Investment security" means a marketable obligation in the

 

form of a bond, note, or debenture, commonly regarded as an

 

investment security and that is salable under ordinary

 

circumstances with reasonable promptness at a fair value.

 

     (j) "Loan and extension of credit" or "loan or extension of

 

credit" includes all direct or indirect advances of funds to a

 

person made on the basis of any obligation of that person to repay

 

the funds or repayable from specific property pledged by or on

 

behalf of the person. To the extent specified by the commissioner,

 

loan and extension of credit or loan or extension of credit

 

includes any liability of a bank to advance funds to or on behalf

 

of a person under a contractual commitment. The term does not

 

include investment securities held by a bank under section 4301.

 

     (k) "Loan production office" means an office of a depository

 

institution or institutions at which activities related to the

 

lending of money are conducted, deposits are not received, and

 

checks are not paid, and which office is not the principal office,

 

a branch, or an agency of an affiliated depository financial

 

institution.

 

     (l) "Member" means a person with ownership interest under the

 

Michigan limited liability company act, 1993 PA 23, MCL 450.4101 to

 

450.5200.

 

     (m) "Messenger service" means a service such as a courier

 

service or an armored car service that picks up from or delivers to

 

customers of 1 or more depository institutions or 1 or more

 

affiliates of a depository institution cash, currency, checks,

 

drafts, securities, or other items relating to transactions between

 

or involving a depository institution or affiliate of a depository

 

institution and those customers, or that transfers cash, currency,

 

checks, drafts, securities, or other items or documents between

 

depository institutions or affiliates of depository institutions.

 

The service may be owned and operated by 1 or more depository

 

institutions or affiliates or by a third party.

 

     (n) "Mobile branch" means a branch, the physical structure of

 

which is moved from time to time.

 

     (o) "National bank" means a national banking association

 

chartered by the federal government under the national bank act.

 

     (p) "National bank act" means the national bank act, chapter

 

106, 13 Stat. 99.

 

     (q) "Out-of-state bank" means a banking corporation organized

 

under the laws of another state, the District of Columbia, or a

 

territory or a protectorate of the United States whose principal

 

office is located in a state other than this state, in the District

 

of Columbia, or in a territory or a protectorate of the United

 

States, and whose deposits are insured by the federal deposit

 

insurance corporation. The term includes an industrial loan bank or

 

industrial loan company organized or chartered under the laws of

 

another state.

 

     (r) "Person" means an individual, partnership, corporation,

 

limited liability company, governmental entity, or any other legal

 

entity.

 

     (s) "Professional investor" means an accredited investor under

 

15 U.S.C. USC 77b.

 

     (t) "Publication", "publish", or "published" means to appear

 

in a newspaper of general circulation in the community or

 

communities where the principal office or offices of the depository

 

institution or institutions are located.

 

     Sec. 3711. (1) A Subject to subsection (13), a bank may

 

establish and operate a branch or branches within any state, the

 

District of Columbia, a territory or protectorate of the United

 

States, or a foreign country, unless the commissioner objects in

 

writing within 30 days after receipt of a written notice from the

 

bank of its intent to establish a branch. The commissioner may

 

issue a written statement of intent not to object at any time

 

before the expiration of the 30 days.

 

     (2) The written notice of intent to establish a mobile branch

 

shall contain a statement by the applying bank that it intends to

 

move the location of the physical structure of the branch from time

 

to time.

 

     (3) Except for a mobile branch, a branch of a bank shall not

 

be moved from 1 location to another without prior written notice to

 

the commissioner.

 

     (4) Unless Subject to subsection (13), unless the commissioner

 

objects in writing within 30 days after receipt of written notice

 

from a bank of its intent to contract for branch services, a bank

 

may contract with 1 or more banks, out-of-state banks, national

 

banks, associations, or savings banks for the depository

 

institution or institutions to act as branches to provide services

 

to the customers of the contracting bank. The commissioner may

 

issue a written statement of intent not to object at any time prior

 

to the expiration of the 30 days. This subsection shall not be

 

construed to limit the powers granted to a bank under section

 

4101(1)(d).

 

     (5) Unless Subject to subsection (13), unless the commissioner

 

objects in writing within 30 days after receipt of written notice

 

from a contracting depository institution of its intent to contract

 

for branch services, 1 or more out-of-state banks, national banks,

 

associations, or savings banks may contract with a bank for the

 

bank to provide services to the customers of the contracting out-

 

of-state bank, national bank, association, or savings bank. The

 

commissioner may issue a written statement of intent not to object

 

at any time prior to the expiration of the 30 days. This subsection

 

shall not be construed to limit the powers granted to a bank under

 

section 4101(1)(d).

 

     (6) Subject to the requirements, limitations, and restrictions

 

of subsections (1) to (3), a state agency or state foreign bank

 

branch organized under this act may establish and operate

 

additional offices in the United States and its territories and

 

protectorates.

 

     (7) An Subject to subsection (13), an out-of-state bank or

 

national bank located in a state, the District of Columbia, or a

 

territory or protectorate of the United States whose laws permit

 

the establishment in that state, district, territory, or

 

protectorate of a branch by a bank may establish and operate 1 or

 

more branches in this state.

 

     (8) An out-of-state bank may apply to organize a branch in

 

this state under this act by providing to the commissioner proof

 

that its deposits are insured by an agency of the United States

 

government. If the commissioner determines that the out-of-state

 

bank is safe and sound, that the proposed branch complies with

 

subsection (13), that the out-of-state bank is subject to

 

regulation, and that there exists an agreement for exchange of

 

supervisory information between the bureau and the out-of-state

 

bank's regulator, the commissioner shall provide to the out-of-

 

state bank a certificate of organization and eligibility to accept

 

deposits and investments of public funds of the state and local

 

units of government.

 

     (9) A foreign bank branch that has designated a home state

 

other than this state may establish and operate 1 or more

 

additional offices in this state.

 

     (10) Prior to commencing operations at a branch in this state,

 

an out-of-state bank, foreign bank, or national bank shall provide

 

written notice to the commissioner of the name of the bank, the

 

street address and mailing address, if different, of the bank's

 

principal office, the street address of the branch office, and the

 

date when the branch is to commence operations in this state.

 

     (11) Each bank, out-of-state bank, foreign bank, and national

 

bank operating in this state shall do both of the following:

 

     (a) Designate and maintain an agent located in this state upon

 

whom process for judicial and administrative matters may be served

 

and shall provide written notice containing the name and address of

 

its agent to the commissioner before commencing operations in this

 

state.

 

     (b) Notify the commissioner in writing of any change in its

 

designated agent or the agent's address within 10 days following

 

the effective date of the change.

 

     (12) For purposes of this section, the designated agent of a

 

bank or a national bank is its chief executive officer.

 

     (13) A bank, out-of-state bank, or national bank shall not

 

establish or maintain a branch or an automated teller machine in

 

this state that is on, in, or within 1.5 miles of any premises or

 

property owned, leased, or controlled by an affiliate if the

 

affiliate engages in commercial activities on or in that property

 

or premises.