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.