Bill Text: OR HB2070 | 2013 | Regular Session | Enrolled
Bill Title: Relating to financial institutions.
Spectrum: Committee Bill
Status: (Passed) 2013-05-13 - Chapter 104, (2013 Laws): Effective date January 1, 2014. [HB2070 Detail]
Download: Oregon-2013-HB2070-Enrolled.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
Enrolled
House Bill 2070
Introduced and printed pursuant to House Rule 12.00. Presession
filed (at the request of House Interim Committee on Business
and Labor)
CHAPTER ................
AN ACT
Relating to financial institutions; amending ORS 707.670,
707.740, 708A.120 and 708A.410.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 707.670 is amended to read:
707.670. (1) { - (a) - } The board of directors of a banking
institution shall hold regular meetings { - as provided in this
subsection - } . { + The Director of the Department of Consumer
and Business Services may specify by rule, in accordance with ORS
183.315, 183.330, 183.335 and 183.341 to 183.410, the minimum
frequency with which a board of directors of a banking
institution must meet. + }
{ - (b) Unless paragraph (c) of this subsection is
applicable, the board of directors shall hold a regular meeting
at least once every month. - }
{ - (c) Notwithstanding paragraph (b) of this subsection,
with the approval of the Director of the Department of Consumer
and Business Services, the board of directors of a banking
institution may hold regular meetings as infrequently as once
each calendar quarter. - }
(2) A quorum at any meeting of the board of directors
{ - shall consist - } { + consists + } of:
(a) If the banking institution has a fixed board size, a
majority of the members of the whole board.
(b) If the banking institution has a variable-range board size,
a majority of the number of directors prescribed or, if no number
is prescribed, a majority of the number in office immediately
before the meeting begins.
(3) If less than a quorum of directors is present at a meeting,
{ - they - } { + the directors + } may adjourn until the next
meeting.
(4) If a quorum is present when a vote is taken, the
affirmative vote of a majority of directors present is the act of
the board of directors unless the articles of incorporation or
bylaws require the vote of a greater number of directors.
(5) Meetings of the board of directors, regular or special, may
be held either within or { - without - } { + outside + } this
state.
(6) Meetings of the board of directors { - shall - } { +
must + } be held upon such notice as is prescribed in the bylaws.
{ + A director's + } attendance { - of a director - } at a
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meeting { - shall constitute - } { + constitutes + } a waiver
of notice of { - such - } { + the + } meeting, except where a
director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not
lawfully called or convened. { + The notice or waiver of notice
of a meeting of the board of directors does not need to specify
either + }
{ - Neither - } the business to be transacted at { - nor - }
{ + or + } the purpose of
{ - any - } { + the + } meeting { - of the board of
directors need be specified in the notice or waiver of notice of
such meeting - } unless required by the bylaws or by law.
(7) Unless { - otherwise restricted by - } the articles of
incorporation or bylaws { + provide otherwise + }, members of
the board of directors of a banking institution or any committee
designated by the board may hold a meeting of the board or
committee by means of conference telephone or similar
communications equipment that allows all persons participating in
the meeting to hear each other. Participation in a meeting under
this subsection { - shall constitute - } { + constitutes + }
presence in person at the meeting.
SECTION 2. ORS 707.740 is amended to read:
707.740. The board of directors of a banking institution shall
annually appoint an examining or audit committee of not fewer
than three directors of the banking institution who are not
active officers of the banking institution or not fewer than
three other persons who are approved by the Director of the
Department of Consumer and Business Services. The examining or
audit committee shall examine and study the report of each
examination
{ - made by - } { + that + } bank supervising
authorities { + make + } and report to the board of directors
within 60 days after { - receipt of - } { + receiving + } the
report { - relative to - } { + concerning the + } criticisms
and suggestions contained in the report and comment on any matter
relative to the affairs of the banking institution that in
{ - its - } { + the audit committee's + } judgment should be
known to the directors. The report
{ - shall - } { + must + } be recorded in the minute book of
the banking institution, and a { - certified - } copy
transmitted to the director
{ - within five days - } { + upon the director's request + }.
SECTION 3. ORS 708A.120 is amended to read:
708A.120. (1) An institution { - shall - } { + may + } not
invest any of
{ - its - } { + the institution's + } assets in the capital
stock of any other corporation { + or in a membership interest
in any limited liability company + }, except:
(a) In the capital stock of the Federal Reserve Bank.
(b) In stock { + or a membership interest the institution + }
acquired or purchased to save a loss on a preexisting debt. The
{ + institution shall sell the + } stock { - shall be
sold - } { + or membership interest + } within two years of the
date { + the institution + } acquired or purchased { + the
stock or membership interest + }. The Director of the Department
of Consumer and Business Services may extend the time if the
director finds that an extension will not be detrimental to the
public interest and will not contravene any other law.
(c) In the capital stock { + or a membership interest + } of
any safe deposit company { - doing - } { + that does + } an
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exclusive safe deposit business on premises { - owned or leased
by - } the institution { + owns or leases + } upon 30 days'
advance notice to the director subject to the same limitations
applicable to a national bank.
(d) In the capital stock { + or a membership interest + }
of { + an + } agricultural and livestock finance
{ - companies - } { + company + }, subject to the same
limitations applicable to national banks and to the approval of
the director.
(e) In the capital stock { + or a membership interest + },
eligible for purchase by national banks, of { + a + } small
business investment
{ - companies - } { + company + }, but the aggregate
investment in the stock
{ - shall - } { + or membership interest may + } not exceed
two percent of the { + institution's + } capital { - of the
institution - } .
(f) In the common stock of any federally chartered corporation
that is chartered for the purpose of providing secondary markets
for the sale of mortgages by institutions.
(g) In the stock of the Federal Home Loan Bank.
(h) In the capital stock of a corporation exclusively engaged
in a trust business or a banker's bank, subject to the same
limitations applicable to national banks.
(i) In the capital stock of { + a + } bank service
{ - corporations - } { + corporation, + } as provided in ORS
708A.130 to 708A.145.
(j) In the capital stock of a community development
corporation { + , + } as provided in ORS 708A.150.
(k) If a trust company is not engaged in a banking business and
if the { + director first approves the + } investment { - is
first approved by the director - } , the trust company may invest
an amount
{ - not to - } { + that does not + } exceed 20 percent of the
capital of the trust company:
(A) In the capital stock { + or a membership interest + } of a
subsidiary investment company { + of a type + } defined in the
Investment Company Act of 1940, as amended; or
(B) In a company one of the purposes of which is to act as a
federal covered investment adviser or a state investment adviser,
as defined in ORS 59.015, with all the powers { - customarily
exercised by - } a federal covered investment adviser or a state
investment adviser { + customarily exercises + }.
(L) In adjustable rate preferred stock of the Student Loan
Marketing Association established in 20 U.S.C. 1087-2,
{ - but - } { + except that + } the aggregate investment in
the stock { - shall - } { + may + } not exceed 15 percent of
the { + institution's + } capital { - of the institution - } .
(m) In the capital stock { + or a membership interest + } of a
company acquired for the purpose of strengthening the
institution's capital structure or { - the elimination of - }
{ + eliminating + } undesirable assets { + , + } as provided in
ORS 708A.125.
(n) In the capital stock { + or a membership interest + } of
{ - banks and corporations - } { + a bank, limited liability
company or corporation that is + } engaged in international or
foreign banking or foreign banking in a dependency or insular
possession of the United States, as provided in ORS 708A.155.
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(o) In the capital stock of a corporation { + , or a membership
interest in a limited liability company, that was + } created to
establish ATMs { + , + } as provided in ORS 708A.160.
(2) An institution may invest { - its - } { + the
institution's + } assets in shares of any mutual fund, the assets
of which are invested solely in obligations of the type described
in and limited under ORS 708A.115.
(3) An institution may, subject to the { + director's + }
approval
{ - of the director - } , acquire or continue to hold the fully
paid stock of a corporation { + or a membership interest in a
limited liability company + }, one of the purposes of which is to
assist the institution in handling real estate, claims, judgments
or other assets or in holding title to the assets.
(4) An institution may acquire or continue to hold the fully
paid stock of a corporation { + or a membership interest in a
limited liability company, + } the purpose of which is to permit
the institution to engage in any business in which a financial
holding company, a bank holding company or a nonbank subsidiary
of a financial holding company or a bank holding company is
authorized to engage. This subsection does not apply unless the
institution is the owner of at least 80 percent of the common
stock of the subsidiary corporation { + or the membership
interests of the limited liability company + }, except qualifying
shares of directors { + or qualifying membership interests of
members + }.
(5) An institution may, subject to the { + director's + }
approval
{ - of the director - } and to rules { - promulgated by - }
the director { + adopts + }, acquire and continue to hold at
least 80 percent of the fully paid stock of a corporation { + ,
or at least 80 percent of the membership interests of a limited
liability company, that is + } engaged in any business in which
an institution is authorized to engage. Except as otherwise
permitted by statute or rule, the investment limitations
applicable to the institution apply to the subsidiary.
(6) An institution may, subject to the { + director's + }
approval
{ - of the director - } and under rules { - promulgated
by - } the director { + adopts + }, acquire and continue to
hold all the fully paid stock of a subsidiary corporation { + ,
or all of the membership interests of a limited liability
company, that is + } engaged in the business of purchasing the
stock of the institution for purposes of holding that stock and
making a market for that stock, if not more than 20 percent of
the net profit of the banking institution is disbursed to the
subsidiary { + or the limited liability company + } in any one
fiscal year. Except as otherwise permitted by statute or rule,
the investment limitations applicable to the institution apply to
the subsidiary { + or the limited liability company + }.
Acquisitions under this subsection { - shall - } { + may + }
not exceed 15 percent of the { + institution's + } capital
{ - of the institution - } .
(7) An institution may acquire and hold all or part of the
stock of a corporation { + , or the membership interests of a
limited liability company, + } that is or may
{ - thereafter - } be licensed { + after the acquisition + }
as an insurance producer as required by ORS 744.053 to transact
one or more of the classes of insurance described in ORS 744.062,
subject to the following requirements:
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(a) { - The acquisition - } { + Acquiring + } and holding
{ - of such - } { + the + } stock { + or the membership
interests are + } { - shall be - } subject to the { +
director's + } approval { - of the director - } . The director
shall base consideration for approval on the condition of the
institution, the adequacy of a formal business plan for the
insurance activities, and the existence of satisfactory
management for the corporation { + or the limited liability
company + }.
(b) The director may revoke or restrict the ongoing authority
of the institution to hold stock in the corporation { + or
membership interests in the limited liability company + } if the
condition of the institution substantially deteriorates or if the
insurance activities are adversely affecting the institution.
(c) For each calendar year during which an institution owns all
or part of { - any - } { + a + } corporation { + , or a
limited liability company, that is + } licensed as an insurance
producer as required by ORS 744.053, the institution shall file a
written report with the director. The report { - shall - }
{ + must + } be filed { - no - } { + not + } later than
March 31 of the following year and shall disclose the insurance
activities of the corporation { + or the limited liability
company + }. The { + director shall establish the + } required
contents of the report
{ - shall be established by the director - } by rule. The
reports filed with the director under this paragraph
{ - shall - } { + must + } be available for public inspection
in the { + director's + } office { - of the director - } .
(d) The corporation { - shall - } { + or limited liability
company may + } not in any manner use customer information { +
that the institution + } obtained { - by the institution - }
from another insurance producer to promote, develop or solicit
insurance business for the corporation { + or the limited
liability company + } unless the other insurance producer
consents to such use of the customer information.
(e) The corporation { + or the limited liability company
is + }
{ - shall be - } subject to the limitations
{ - applicable - } { + that apply + } to depository
institutions under ORS 746.213 to 746.219. For the purpose of
this paragraph, 'depository institution' has the meaning given
that term in ORS 746.213.
SECTION 4. ORS 708A.410 is amended to read:
708A.410. (1) Within the limits established under applicable
federal statutes and regulations, an Oregon commercial bank
{ - receiving - } { + that receives + } savings accounts
shall prescribe by
{ - its - } { + the Oregon commercial bank's + } bylaws or by
contract with
{ - its - } { + the Oregon commercial bank's + } depositors,
the time and conditions on which repayment is to be made to
depositors or to
{ - their - } { + the depositors' + } order.
(2) A bank may require 30 days' notice to withdraw any sum up
to $5,000, 90 days' notice to withdraw any sum over $5,000 and
not over $50,000, and 180 days' notice to withdraw any sum over
$50,000. { + The bank may limit, in the aggregate, + }
withdrawals during a specified time period { - may be limited
in the aggregate - } to the amount designated for { - that - }
{ + the + } time period.
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(3) { + (a) + } Except for negotiable orders of withdrawal and
similar deposit accounts, withdrawal from which is made subject
to check, { + and except for inadvertent overdrafts, + } an
Oregon commercial bank
{ - shall - } { + may + } not knowingly permit a depositor to
overdraw the depositor's savings account.
{ + (b) As used in paragraph (a) of this subsection, '
inadvertent overdraft' means an overdraft that:
(A) Is not expressly permitted or provided for in the bylaws or
deposit contract of the Oregon commercial bank;
(B) Results from events or circumstances beyond the Oregon
commercial bank's reasonable control; and
(C) Is eliminated within 14 days after the Oregon commercial
bank becomes aware of the overdraft. + }
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Passed by House February 28, 2013
.............................................................
Ramona J. Line, Chief Clerk of House
.............................................................
Tina Kotek, Speaker of House
Passed by Senate April 30, 2013
.............................................................
Peter Courtney, President of Senate
Enrolled House Bill 2070 (HB 2070-A) Page 6
Received by Governor:
......M.,............., 2013
Approved:
......M.,............., 2013
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2013
.............................................................
Kate Brown, Secretary of State
Enrolled House Bill 2070 (HB 2070-A) Page 7
