GENERAL ASSEMBLY OF NORTH CAROLINA
1995 SESSION
CHAPTER 129
AN ACT TO MAKE CERTAIN MISCELLANEOUS AMENDMENTS TO THE BANKING LAWS.
The General Assembly of North Carolina enacts:
Section 1. G.S. 53-1(3) reads as rewritten:
"(3) Insolvency. - The term 'insolvency' means:
a. When a bank cannot meet its deposit liabilities as they become due in the regular course of business;
b. When the actual cash market value of its assets is insufficient to pay its liabilities to depositors and other creditors;
c. When its reserve shall fall under the amount required by this Chapter, and it shall fail to make good such reserve within 30 days after being required to do so by the Commissioner of Banks; or
d. Whenever the undivided profits and surplus shall be inadequate to cover losses of the bank, whereby an impairment of the capital stock is created."
Sec. 2. G.S. 53-18 reads as rewritten:
"§ 53-18. Voluntary liquidation.
A bank may go into voluntary liquidation and be closed, and
may surrender its charter and franchise as a corporation of this State by the
affirmative votes of its stockholders owning two thirds of its stock, such vote
to be taken at a meeting of the stockholders duly called by resolution of the
board of directors, written notice of which, stating the purpose of the
meeting, shall be mailed to each stockholder, or in case of his death, to his
legal representative or heirs at law, addressed to his last known residence 10
days previous to the date of said meeting. Whenever stockholders shall by such
vote at a meeting regularly called for the purpose, notice of which shall be
given as herein provided, decide to liquidate such bank, a certified copy of
all proceedings of the meeting at which said action shall have been taken,
verified by the oath of the president and cashier, secretary, shall
be transmitted to the Commissioner of Banks for his approval. If the
Commissioner of Banks shall approve the same, he shall issue to the said bank,
under his seal, a permit for such purpose. No such permit shall be issued by
the Commissioner of Banks until said Commissioner of Banks shall be satisfied
that provision has been made by such bank to satisfy and pay off all depositors
and all creditors of such bank. If not so satisfied, the Commissioner of Banks
shall refuse to issue a permit, and shall be authorized to take possession of
said bank and its assets and business, and hold the same and liquidate said
bank in the manner provided in this Chapter. When the Commissioner of
Banks shall approve the voluntary liquidation of a bank, the directors of said
bank shall cause to be published in a newspaper in the city, town, or county
in which such bank is located, or if no newspaper is published in such
county, then in a newspaper having a general circulation in such county, a
notice that the bank is closing up its affairs and going into liquidation, and
notify its depositors and creditors to present their claims for payment. Such
notice shall be published once a week for four consecutive weeks. When
any bank shall be in process of voluntary liquidation, it shall be subject to
examination by the Commissioner of Banks, and shall furnish such reports from
time to time as may be called for by the Commissioner of Banks. All
unclaimed deposits and dividends remaining in the hands of such bank shall be
subject to the provisions of Chapter 116B. Whenever the Commissioner of Banks
shall approve it, any bank may sell and transfer to any other bank, either
State bank or national bank, all of its assets of every kind upon such terms as
may be agreed upon and approved by the Commissioner of Banks and by two-thirds
vote of its board of directors. A certified copy of the minutes of any meeting
at which such action is taken, under the oath of the president and cashier, secretary,
together with a copy of the contract of sale and transfer, shall be filed
with the Commissioner of Banks. Whenever voluntary liquidation shall be
approved by the Commissioner of Banks or the sale and transfer of the assets of
any bank shall be approved by the Commissioner of Banks, a certified copy of
such approval under seal of the Commissioner of Banks, filed in the office of
the Secretary of State, shall authorize the cancellation of the charter of such
bank, subject, however, to its continued existence, as provided by this Chapter
and the general law relative to corporations."
Sec. 3. G.S. 53-19 reads as rewritten:
"§ 53-19. When Commissioner of Banks may take charge.
The Commissioner of Banks may forthwith take possession of the business and property of any bank to which this Chapter is applicable whenever it shall appear that such bank:
(1) Has violated its charter or any laws applicable thereto;
(2) Is conducting its business in an unauthorized or unsafe manner;
(3) Is in an unsafe or unsound condition to transact its business;
(4) Has an impairment of its capital stock;
(5) Has refused to pay its depositors in accordance with the terms on which such deposits were received, or has refused to pay its holders of certificates of indebtedness or investment in accordance with the terms upon which such certificates of indebtedness or investment were sold;
(6) Has become otherwise insolvent;
(7) Has neglected or refused to comply with the terms of a duly issued lawful order of the Commissioner of Banks;
(8) Has refused, upon proper demand, to submit its records, affairs, and concerns for inspection and examination of a duly appointed or authorized examiner of the Commissioner of Banks;
(9) Its officers have refused to be examined upon oath regarding its affairs; or
(10) Has made a voluntary assignment of its assets to trustees.
Such banks may resume business as provided in G.S. 53-37."
Sec. 4. G.S. 53-20(j) reads as rewritten:
"(j) Notice and Time for Filing Claims; Copies Mailed. - Notice shall be given by advertisement once a week for four consecutive weeks in a newspaper published in said county; if no newspaper is published in said county, then in some newspaper having a general circulation in said county, calling on all persons who may have claims against the bank to present the same to the Commissioner of Banks at the office of the bank, and within the time to be specified in the notice, not less, however, than 90 days from the date of the first publication. A copy of this notice shall be mailed to all persons whose names appear as creditors upon the books of the bank. Affidavit by the Commissioner of Banks, or agent mailing the notice, to the effect that said notice was mailed shall be conclusive evidence thereof."
Sec. 5. G.S. 53-20(r) reads as rewritten:
"(r) Action by Commissioner of Banks after Full Settlement. - Whenever the Commissioner of Banks shall have paid all the expenses of liquidation and shall have paid to each and every depositor and creditor of such bank, whose claims shall have been duly proven and allowed, the full amount of such claims, and shall have made proper provision for unclaimed and unpaid deposits and disputed claims and deposits, and shall have in hand other assets of said bank, he shall call a meeting of the stockholders of said bank by giving notice thereof by publication once a week for four consecutive weeks in a newspaper published in said county, or if no newspaper is published in said county, then in a newspaper having general circulation in said county, and by mailing a copy of such notice to each stockholder addressed to him at his address as the same shall appear upon the books of the bank. Affidavit of the officer mailing the notice herein required and of the printer as to the publication shall be conclusive evidence of notice hereunder. At such meeting any stockholders may be represented by proxy and the stockholders shall elect, by a majority vote of the stock present, an agent or agents who shall be authorized to receive from the Commissioner of Banks all the assets of said bank then remaining in his hands; and the Commissioner of Banks shall cause to be transferred and delivered to the said agent, or agents, all such assets of said bank. The Commissioner of Banks shall thereupon cause to be filed in the office of the clerk of the superior court in the pending actions a full and complete report of all his transactions, showing the assets of said bank so transferred, together with the name of the agent or agents receipting for the same; and the filing of such report shall act as a full and complete discharge of the Commissioner of Banks from all further liabilities by reason of the liquidation of the bank. Such agent, or agents, shall convert the assets coming into his hands, or their hands, into cash, and shall make distribution to the stockholders of said bank as herein provided. Said agent, or agents, shall file semiannually a report of all transactions with the superior court of the county in which the bank is located, and with the Commissioner of Banks, and shall be allowed for such services such fees not in excess of five percent (5%), as may be fixed by the court. In case of death, removal or refusal to act, of any agent or agents elected by the stockholders, the Commissioner of Banks shall, upon report of such action on the part of such agent or agents to the superior court of the county in which the bank is located, turn over to said superior court for the stockholders of said bank, all the remaining assets of the bank, file his report and be discharged from any and all further liability to the stockholders as herein provided. Said assets, when turned over to the superior court hereunder, shall remain in the hands of the superior court until such time as, by order of court or by action of the stockholders, distribution shall be provided for."
Sec. 6. G.S. 53-26 reads as rewritten:
"§ 53-26. Petition for new trustee; service upon parties interested.
In all cases of such insolvency and liquidation mentioned in
G.S. 53-25, the clerk of the superior court of any county in which such
indenture, deed of trust or other instrument of like character is recorded
shall, upon the verified petition of any person interested in any such trust,
either as trustee, beneficiary or otherwise, which interest shall be set out in
said petition, enter an order directing service on all interested parties
either personally or by the publication in some a newspaper
published in the county, or in some adjoining county if no
newspaper is published in the county where such application is made, then in
a newspaper having a general circulation in such county, of a notice
directed to all persons concerned, commanding and requiring all persons having
any interest in said trust, to be and appear at his office at a day designated
in said order and notice, not less than 30 days from the date thereof, and show
cause why a new trustee shall not be appointed."
Sec. 7. G.S. 53-37 reads as rewritten:
"§ 53-37. Conditions under which banks may reopen.
Whenever the Commissioner of Banks has taken in possession any bank, such bank may, with the consent of the Commissioner of Banks, resume business upon such terms and conditions as may be approved by the State Banking Commission. When such banks have been taken in possession under the provisions of G.S. 53-20, subsections (a)or (b), such conditions shall be fully stated in writing and a copy thereof shall be filed with the clerk of the superior court in the action required to be commenced in such cases against said bank under the provisions of G.S. 53-20, subsection (c): Provided, however, no bank or banking institution which has been taken in possession by the Commissioner of Banks under the provisions of the State banking laws shall be reopened to receive deposits or for the transaction of a banking business unless and until:
(1) The bank has been completely restored to solvency;
(2) The capital stock, if impaired, has been entirely restored in cash; or
(3) It shall clearly appear to the Commissioner of Banks that such bank may be reopened with safety to the public and such reopening is necessary to serve the business interests of the community."
Sec. 8. G.S. 53-42 reads as rewritten:
"§ 53-42. Impairment of capital; assessments, etc.
The Commissioner of Banks shall notify every bank whose
capital shall have become impaired from losses or any other cause, and the
surplus and undivided profits of such bank are insufficient to make good such
impairment, to make the impairment good within 60 days of such notice by an
assessment upon the stockholders thereof, and it shall be the duty of the
officers and directors of the bank receiving such notice to immediately call a
special meeting of the stockholders for the purpose of making an assessment
upon its stockholders sufficient to cover the impairment of the capital,
payable in cash, at which meeting such assessment shall be made: Provided, that
such bank may reduce its capital to the extent of the impairment, as provided
in G.S. 53-11. If any stockholder of such bank neglects or refuses to pay
such assessment as herein provided, it shall be the duty of the board of
directors to cause a sufficient amount of the capital stock of such stockholder
or stockholders to be sold at public auction, upon 30 days' notice given by
posting such notice of sale in the office of the bank and by publishing such
notice in a newspaper in the place county where the bank is located,
and if none therein, a newspaper circulating having general
circulation in the county in which the bank is located, to make good the
deficiency, and the balance, if any, shall be returned to the delinquent
shareholder or shareholders. If any such bank shall fail to cause to be paid in
such deficiency in its capital stock for three months after receiving such
notice from the Commissioner of Banks, the Commissioner of Banks may forthwith
take possession of the property and business of such bank until its affairs be
finally liquidated as provided by law. A sale of stock, as provided in this
section, shall effect an absolute cancellation of the outstanding certificate
or certificates evidencing the stock so sold, and shall make the certificate
null and void, and a new certificate shall be issued by the bank to the
purchaser of such stock.”
Sec. 9. G.S. 53-43(3) reads as rewritten:
"(3) To purchase, hold, and convey real estate for the following purposes:
a. Such as shall be necessary for the convenient transaction of its business, including furniture and fixtures, with its banking offices and other spaces to rent as a source of income, which investment shall not exceed fifty percent (50%) of its unimpaired capital fund: Provided, that this fifty percent (50%) limitation shall not apply to banking houses, furniture and fixtures leased for the purposes set forth in this subdivision. Provided, further, that if any bank shall demonstrate to the satisfaction of the Commissioner of Banks that an investment of more than fifty percent (50%) of its unimpaired capital fund in its banking houses, furniture and fixtures, would promote the convenience of the general public in transacting its banking business and would not adversely affect the financial stability of the bank, the Commissioner of Banks may, in his discretion, authorize any bank to invest more than fifty percent (50%) of its unimpaired capital fund in its banking houses, furniture and fixtures.
b. Such as is mortgaged to it in good faith by way of security for loans made or moneys due to such banks.
c. Such as has
been purchased at sales upon foreclosures of mortgages and deeds of trust held
or owned by it, or on judgments or decrees obtained and rendered for debts due
to it, or in settlements affecting security of such debts. All real
property referred to in this subdivision shall be sold by such bank within one
year five years after it is acquired unless, upon application by the
board of directors, the Commissioner of Banks extends the time within which
such sale shall be made. Any and all powers and privileges heretofore
granted and given to any person, firm, or corporation doing a banking business
in connection with a fiduciary and insurance business, or the right to deal to
any extent in real estate, inconsistent with this Chapter, are hereby
repealed."
Sec. 10. G.S. 53-46 reads as rewritten:
"§ 53-46. Limitations on investments in securities.
The investment in any bonds or other debt obligations of any one
firm, individual, or corporation, unless it be the obligations of the United
States, or agency thereof, or other obligations guaranteed by the United States
Government, State of North Carolina, or other state of the United States, or
of some city, town, township, county, school district, or other
political subdivision of the State of North Carolina, or other state of the
United States in which the bank maintains a branch, shall at no time be
more than twenty percent (20%) of the unimpaired capital fund of any bank
to an amount not in excess of two hundred fifty thousand dollars
($250,000); and not more than ten percent (10%) of the unimpaired capital fund
in excess of two hundred fifty thousand dollars ($250,000). exceed fifty
thousand dollars ($50,000) plus ten percent (10%) of all amounts in excess of
two hundred fifty thousand dollars ($250,000) of the bank's unimpaired capital
fund."
Sec. 11. Article 6 of Chapter 53 of the General Statutes is amended by adding a new section to read:
"§ 53-46.1. Investments in mutual funds.
Subject to rules adopted by the Banking Commission, a bank may invest a portion of its unimpaired capital in mutual funds. Any limitation imposed by rule on the amount of such investment shall be in addition to a bank's limitations on investment in stocks provided in G.S. 53-47."
Sec. 12. G.S. 53-54 reads as rewritten:
"§ 53-54. Transactions not performed during banking hours.
Nothing in any law of this State shall in any manner
whatsoever affect the validity of, or render void or voidable, the payment,
certification, or acceptance of a check or other negotiable instrument or any
other transaction by a bank in this State, because done or performed during any
time other than regular banking hours: Provided, that nothing herein shall
be construed to compel any bank in this State, which by law or custom is
entitled to close at 12 noon on any Saturday, or for the whole part day
of any legal holiday, to keep open for the transaction of business, or to
perform any of the acts or transactions aforesaid on any Saturday after such
hour or on any legal holiday, except at its option. hours. Nothing
herein shall be construed to require a bank doing business in this State to be
open when it may otherwise lawfully be closed or to prohibit a bank from
conducting a transaction at times other than its regularly scheduled hours of
operation."
Sec. 13. G.S. 53-62(e) reads as rewritten:
"(e) A bank may
discontinue a branch office upon resolution of its board of directors or board
of managers. Upon the adoption of such a resolution, the bank shall file
a certification with the Commissioner of Banks specifying the location of the
branch office to be discontinued and the date upon which it is proposed that
the discontinuance shall be effective. This certificate must state the
reasons for the closing of such branch and indicate that the needs and
conveniences of the community would still be adequately met. Notice
stating the intention to discontinue said branch shall be published in a
newspaper serving such community once a week for four consecutive weeks before
any certificate requesting discontinuance is filed with the Commissioner of
Banks. No such branch may be discontinued until approved by the
Commissioner of Banks, who shall first hold a public hearing thereon, if so
requested by any interested party.
A bank may, upon resolution by the board of directors, discontinue a branch office subject to the following:
(1) The bank shall notify the Commissioner in writing of its intent to close a branch not later than 90 days prior to the proposed closing date. Such notice shall include a detailed statement of the reasons for the decision to close a branch and statistical or other information in support of such reasons.
(2) The bank shall provide a notice of its intent to close a branch to its customers. Such notice shall be posted in a conspicuous manner on the branch premises for a period of 30 days prior to the proposed closing date, and shall either be included in at least one of any regular account statements mailed to customers of such branch, or in a separate mailing to such customers. The later notice shall be given at least 90 days prior to the proposed closing date.
No branch shall be closed until approved by the Commissioner of Banks, provided, however, the consolidation of two or more branches into a single location in the same vicinity shall not be considered a closure subject to the provisions of this subsection."
Sec. 14. G.S. 53-63 reads as rewritten:
"§ 53-63. Unlawful issuing of certificate of deposit.
It shall be unlawful for any bank to issue any certificate of
deposit or other negotiable instrument of its indebtedness to the holder
thereof except for lawful money of the United States, checks, drafts, or bills
of exchange which are the actual equivalent of such money; nor shall such
moneys, checks, drafts, or bills of exchange be the proceeds of any note given
in payment of the purchase price of any stock. money. Any officer or
employee of any bank violating the provisions of this section shall be guilty
of a Class 1 misdemeanor.”
Sec. 15. G.S. 53-77.1A reads as rewritten:
"§ 53-77.1A. Days and hours of operation.
(a) A bank as
defined at G.S. 53-1 or G.S. 53-136, including national banking associations
and Federal Reserve banks, or any branch of the foregoing, located in this
State, shall operate not less than five days per week. On one day of the
week each bank and its branches shall remain open for not less than seven
hours, three of which shall be after 3 o'clock p.m.
(b) In addition
to the minimum hours required of a bank and its branches in subsection (a), a
bank and its branches may operate on such days and during such hours as the
bank deems appropriate.
(c) A limited
service facility may operate on such days of the week and during such hours as
the bank deems appropriate.
(d) A bank
shall give such notice of the days and hours during which it and its branches
and limited service facilities shall operate as required by the Commissioner of
Banks. Except as provided in G.S. 53-77.2A, a bank as defined in G.S.
53-1 or G.S. 53-136, including national banking associations and federal
reserve banks, or any branch or limited service facility of the foregoing located
in this State, may operate on such days and during such hours as the board of
directors shall designate."
Sec. 16. G.S. 53-78 reads as rewritten:
"§ 53-78. Appointment of executive and loan committees by directors.
The board of directors shall appoint an executive committee or committees, each of which shall be composed of at least three of its members with such duties and powers as are defined by the regulations or bylaws, who shall serve until their successors are appointed. Such executive committee or committees shall meet as often as the board of directors may require, except that the executive committee or committees shall meet at least once during each month in which there is no meeting of the board of directors, and approve or disapprove all loans and investments. All loans and investments shall be made under such rules and regulations as the board of directors may prescribe.
The board of directors may appoint, in addition to the
executive committee or committees, a general loan committee, the membership of
which shall include at least three directors and such officers of the bank as
may be appointed, with such duties and powers with respect to making loans and
investments as are defined in the bylaws or by resolution of the board of
directors, the members of such general loan committee to serve until their
successors are appointed. Such general loan committee, if appointed, shall meet
as often as the bylaws or resolution of the board of directors may require,
which shall not be less frequently than once each month, and approve or
disapprove all such loans and investments as may be required by the bylaws or
by resolution of the board of directors to be submitted to the general loan
committee. The board of directors of any bank, which has branches, may appoint,
in addition to a general loan committee, a loan committee for the parent bank
and for any branch, each of which committees shall include at least three
members who are officers or members of the board of managers of the
local advisory board for such parent bank or branch, with such duties and
powers with respect to approving or disapproving loans and investments as may
be defined in the bylaws or by resolution of the board of directors, and under
such rules and regulations as the board of directors may prescribe. Such loans
and investments as are authorized or approved by a general loan committee or
either of the other loan committees hereinabove provided for may, but need not,
be approved or disapproved by the executive committee or committees. All loans
and investments made, however, shall be authorized or approved by either the
executive committee or committees, a general loan committee, or one of the
other loan committees herein provided for.”
Sec. 17. G.S. 53-91 is repealed.
Sec. 18. Article 7 of Chapter 53 of the General Statutes is amended by adding two new sections to read:
"§ 53-91.2. Loans to executive officers.
No bank may extend credit to any of its executive officers nor a firm or partnership of which such executive officer is a member, nor a company in which such executive officer owns a controlling interest, unless the extension of credit is made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions by the bank with persons who are not employed by the bank, and provided further that the extension of credit does not involve more than the normal risk of repayment. For the purposes of this section, the term 'executive officer' shall mean an officer who has authority to participate in major policy-making functions of the bank. Provided further, the maximum amount of such loans shall be that as prescribed by applicable federal banking regulations.
"§ 53-91.3. Directors defined; appointment of advisory directors.
(a) Unless otherwise expressly provided, reference to 'director' or 'board of directors' shall mean a director of the banking corporation as elected by the shareholders pursuant to North Carolina corporation law.
(b) The board of directors so elected by the shareholders may, consistent with a bank's articles of incorporation or bylaws, appoint advisory directors to perform such duties as prescribed by the board with respect to local offices and branches of any bank chartered under Chapter 53 of the General Statutes."
Sec. 19. G.S. 53-92.1 reads as rewritten:
"§ 53-92.1. Commission bound by requirements imposed on Commissioner as to certification of new banks, establishment of branches, etc.
Notwithstanding any other provisions of this Chapter, the
State Banking Commission, in the exercise of its authority to review the action
of the Commissioner of Banks, shall be bound by the requirements, conditions
and limitations imposed in this Chapter on said Commissioner as to the certification
of new banks or the establishments of branch banks or teller's windows. limited
service facilities."
Sec. 20. G.S. 53-93.1 reads as rewritten:
"§ 53-93.1. Deputy commissioner.
The Commissioner of Banks shall appoint, with approval of the Governor, and may remove at his discretion a deputy commissioner, who, in the event of the absence, death, resignation, disability or disqualification of the Commissioner of Banks, or in case the office of Commissioner shall for any reason become vacant, shall have and exercise all the powers and duties vested by law in the Commissioner of Banks.
Irrespective of the conditions under which the deputy commissioner may exercise the powers and perform the duties of the Commissioner of Banks, pursuant to the preceding paragraph, such deputy commissioner, in addition thereto, is hereby authorized and empowered at any and all times, at the discretion of the Commissioner of Banks, to perform such duties and exercise such powers of the Commissioner of Banks in the name of and on behalf of the Commissioner as the Commissioner, in his discretion, may direct.
This section is not to be construed to modify the
provisions of G.S. 53-97."
Sec. 21. G.S. 53-99 is amended by adding a new subsection to read:
"(d) Nothing in this section of the law shall prohibit a bank, upon approval of the Commissioner of Banks, from disclosing to an insurance carrier, for the purpose of obtaining insurance coverage required by Chapter 53 of the General Statutes, the bank's regulatory rating prepared by the Commissioner's office. Provided however, the insurance underwriter must agree in writing to maintain the confidentiality of such information and to not disclose the same in any manner whatsoever."
Sec. 22. G.S. 53-105 reads as rewritten:
"§ 53-105. Reports of condition.
Every bank shall make to the Commissioner of Banks not less
than four reports during each year in the manner and form prescribed by the
Commission by regulation. Each such report shall exhibit in detail and
under appropriate heads the resources, assets, and liabilities of such bank at
the close of business on any past day by the Commissioner of Banks specified,
and shall be transmitted to the Commissioner of Banks within 10 days after the
receipt of a request or requisition therefor from the Commissioner of Banks;
provided, however, the Commissioner of Banks may extend the time for a period
not to exceed 30 days for any bank to transmit the reports heretofore required
whenever in his judgment such extension is necessary; and in a form prescribed
by the Commissioner of Banks; a summary of such report the report for
the quarter ending December 31, shall if required by the Commissioner of
Banks, be published in a newspaper published in the place county where
the bank is located, or if there is no newspaper in the place, county,
then in the nearest one published thereto a newspaper having a
general circulation in the county in which such bank is established. Proof
of such publication shall be furnished the Commissioner of Banks in such form
as may be prescribed by him."
Sec. 23. G.S. 53-106 reads as rewritten:
"§ 53-106. Special reports.
The Commissioner of Banks may call for special reports
whenever in his judgment it is necessary to inform him of the condition of any
bank, or to obtain a full and complete knowledge of its affairs. Said reports
shall be in and according to the form prescribed by the Commissioner of Banks,
and shall be verified in the manner provided in G.S. 53-105, Banks and
shall be published as therein provided, as provided in G.S. 53-105, if
so required by the Commissioner of Banks so to be. Banks. The
Commissioner of Banks may extend the time for filing special reports for a
period not to exceed 30 days."
Sec. 24. G.S. 53-114 reads as rewritten:
"§ 53-114. Other powers of State Banking Commission.
In addition to all other powers conferred upon and vested in the State Banking Commission, the said Commission, with the approval of the Governor, is hereby authorized, empowered and directed, whenever in its judgment the circumstances warrant it:
(1) To authorize, permit, and/or direct and require all banking corporations under its supervision, to extend for such period and upon such terms as it deems necessary and expedient, payment of any demand and/or time deposits.
(2) To direct, require or
permit, upon such terms as it may deem advisable, the issuance of clearinghouse
certificates or other evidences evidence of claims against assets of
such banking institutions.
(3) To authorize and direct the creation, in such banking institutions, of special trust accounts for the receipt of new deposits, which deposits shall be subject to withdrawal on demand without any restriction or limitation and shall be kept separate in cash or on deposit in such banking institutions as it shall designate or invested in such obligations of the United States and/or the State of North Carolina as it shall designate.
(4) To adopt for such banking institutions such regulations as are necessary in its discretion to enable such banking institutions to comply fully with the federal regulations prescribed for national or state banks."
Sec. 25. G.S. 53-125 reads as rewritten:
"§ 53-125. Examiners disclosing confidential information.
If any bank examiner or other employee of the Commissioner of
Banks fails to keep secret the facts and information obtained in the course of
an examination of a bank, except when the public duty of such examiner or
employee requires him to report upon or take official action regarding the
affairs of such bank, he shall be guilty of a Class 1 misdemeanor.
Nothing in this section shall prevent the proper exchange of information with
the representatives of the banking departments of other states, with the
federal reserve bank or national bank examiners, or other authorities, with the
creditors of such bank or others with whom a proper exchange of information is
wise or necessary, or with the clearinghouse officials and examiners. necessary."
Sec. 26. G.S. 53-141 reads as rewritten:
"§ 53-141. Powers.
Industrial banks shall have the powers conferred by paragraphs 1, 2, 3, 5 and 7 of G.S. 55-17 [subdivisions (1), (2), (3), (5) and (7) of subsection (a) of G.S. 55-17], and subdivision (3) of G.S. 53-43, such additional powers as may be necessary or incidental for the carrying out of their corporate purposes, and in addition thereto the following powers:
(1) To discount and negotiate promissory notes, drafts, bills of exchange and other evidences of indebtedness, and to loan money on real or personal security, and to purchase notes, bills of exchange, acceptances or other choses in action, and to take and receive interest or discounts subject to G.S. 53-43(1).
(2) To make loans and charge and receive interest at rates not exceeding the rates of interest provided in G.S. 24-1.1 and 24-1.2.
(3) To establish branch offices or places of business within the county in which its principal office is located, and elsewhere in the State, after having first obtained the written approval of the Commissioner of Banks, which approval may be given or withheld by the Commissioner of Banks in his discretion. The Commissioner of Banks, in exercising such discretion, shall take into account, but not by way of limitation, such factors as the financial history and condition of the applicant bank, the adequacy of its capital structure, its future earnings prospects, and the general character of its management. Such approval shall not be given until he shall find
a. That the
establishment of such branch or teller's window limited service
facility will meet the needs and promote the convenience of the
community to be served by the bank, and
b. That the
probable volume of business and reasonable public demand in such community are
sufficient to assure and maintain the solvency of said branch or teller's
window limited service facility and of the existing bank or banks in
said community.
Provided, that the Commissioner of Banks shall not authorize the establishment of any branch the paid-in capital of whose parent bank is not sufficient in amount to provide for capital in an amount equal to that required with respect to the establishment of branches of commercial banks under the provisions of G.S. 53-62. For the purposes of this paragraph, the provisions of G.S. 53-62 as to the meaning of the word 'capital' shall be applicable.
A bank may discontinue a branch
office upon resolution of its board of directors or board of managers. directors.
Upon the adoption of such a resolution, the bank shall file a
certification with the Commissioner of Banks specifying the location of the
branch office to be discontinued and the date upon which it is proposed that
the discontinuance shall be effective. This certificate must state the reasons
for the closing of such branch and indicate that the needs and convenience of
the community would still be adequately met. Notice stating the intention to
discontinue the said branch shall be published in a newspaper serving said
community once a week for four consecutive weeks before a certificate
requesting a discontinuance is filed with the Commissioner of Banks. No such
branch may be discontinued until approved by the Commissioner of Banks, who
shall first hold a public hearing thereon, if so requested by any interested
party. follow the procedures for closing a branch as set forth at G.S.
53-62(e). No branch shall be closed until approved by the Commissioner of
Banks.
(4) Subject to the approval of the Commissioner of Banks and on the authority of its board of directors, or a majority thereof, to enter into such contract, incur such obligations and generally to do and perform any and all such acts and things whatsoever as may be necessary or appropriate in order to take advantage of any and all memberships, loans, subscriptions, contracts, grants, rights or privileges, which may at any time be available or inure to banking institutions, or to their depositors, creditors, stockholders, conservators, receivers or liquidators, by virtue of those provisions of section eight of the Federal Banking Act of 1933 (section twelve B of the Federal Reserve Act as amended) which establish the Federal Deposit Insurance Corporation and provide for the insurance of deposits, or of any other provisions of that or any other act or resolution of Congress to aid, regulate or safeguard banking institutions and their depositors, including any amendments of the same or any substitutions therefor; also, to subscribe for and acquire any stock, debentures, bonds or other types of securities of the Federal Deposit Insurance Corporation and to comply with the lawful regulations and requirements from time to time issued or made by such corporations.
(5) To solicit, receive and accept money or its equivalent on deposit both in savings accounts and upon certificates of deposit.
(6) Subject to the approval of the State Banking Commission, to solicit, receive and accept money or its equivalent on deposit subject to check; provided, however, no such approval shall be given unless and until such industrial bank meets the capital requirements of a commercial bank as set forth in G.S. 53-2."
Sec. 27. G.S. 53-145 reads as rewritten:
"§ 53-145. Sections of general law applicable.
Sections 53-1, 53-3, 53-4, 53-5, 53-6, 53-7, 53-8, 53-9, 53-
10, 53-11, 53-12, 53-13, 53-18, 53-20, 53-22, 53-23, 53-42, 53-42.1, 53-47,
53-50, 53-51, 53-54, 53-63, 53-64, 53-67, 53-68, 53-70, 53-71, 53-72, 53-73,
53-74, 53-78, 53-79, 53-80, 53-81, 53-82, 53-83, 53-85, 53-87,
53-88, 53-90, 53-91, 53-91.2, 53-91.3, 53-105, 53-106,
53-107, 53-108, 53-109, 53-110, 53-111, 53-112, 53-117, 53-118, 53-119, 53-120,
53-121, 53-122, 53-123, 53-124, 53-125, 53-126, 53-128, 53-129, 53-132, 53-133,
53-134, relating to the supervision and examination of commercial banks,
shall be construed to be applicable to industrial banks, insofar as they are
not inconsistent with the provisions of this Article. Sections 53-19, 53-24,
53-37, 53-39, 53-40, 53-41, 53-44, 53-45, 53- 58, 53-59, 53-61, 53-66,
53-75, 53-76, 53-77, 53-86, 53-113, 53-114, 53-115, 53-116, 53-135, 53-146,
and 53-148 through 53-158, relating to commercial banks, shall be construed to
be applicable to industrial banks."
Sec. 28. G.S. 53-153 reads as rewritten:
"§ 53-153. Segregation of recent deposits not effective after bank turned back to officers; notice of turning bank back to officers.
After 15 days after the affairs of a bank shall have been
turned back to its board of directors by the conservator, either with or
without a reorganization as provided in G.S. 53-152 hereof, the provisions of
G.S. 53-151 with respect to the segregation of deposits received while it is in
the hands of the conservator, and with respect to the use of such deposits to
liquidate the indebtedness of such bank, shall no longer be effective:
Provided, that before the conservator shall turn back the affairs of the bank
to its board of directors, he shall cause to be published in a newspaper published
in the city, town or county in which such bank is located, and if
no newspaper is published in such city, town or county, in a
newspaper to be selected by the Commissioner of Banks, having a
general circulation in such county, a notice in form approved by the
Commissioner of Banks, stating the date on which the affairs of the bank will
be returned to its board of directors, and that the said provisions of G.S.
53-151 will not be effective after 15 days after such date; and on the date of
publication of such notice, the conservator shall immediately send to every
person who is a depositor in such bank under G.S. 53-151, a copy of such notice
by registered mail, addressing it to the last known address of such persons
shown by the records of the bank; and the conservator shall send similar notice
in like manner to every person making deposit in such bank under G.S. 53-151,
after the date of such newspaper publication and before the time when the
affairs of the bank are returned to its directors."
Sec. 29. G.S. 53-188 reads as rewritten:
"§ 53-188. Review of regulations, order or act of Commission or Commissioner.
The Commission shall have full authority to review any rule, regulation, order or act of the Commissioner done pursuant to or with respect to the provisions of this Article and any person aggrieved by any such rule, regulation, order or act may appeal to the Commission for review upon giving notice in writing within 20 days after such rule, regulation, order or act complained of is adopted, issued or done. Notwithstanding any other provision of law to the contrary, any aggrieved party to a decision of the Commission shall be entitled to an appeal pursuant to G.S. 53-92."
Sec. 30. G.S. 53-206 reads as rewritten:
"§ 53-206. Notice of denial or revocation of license; hearing; appeal.
(a) No license
shall be denied or revoked except on 10 days' notice to the applicant or
licensee. Upon receipt of such notice the applicant or licensee may, within
five days of such receipt, make written demand for a hearing. The hearing
before the Commissioner shall be an informal hearing and shall be held with
reasonable promptness. The decision of the Commissioner may be
appealed to the Banking Commission.
(b) The Banking Commission shall have full authority to review any rule, regulation, order, or act of the Commissioner done pursuant to or with respect to the provisions of this Article; and any person aggrieved by any such rule, regulation, order, or act may appeal to the Commission for review upon giving notice in writing within 20 days after such rule, regulation, order, or act complained of is adopted, issued, or done. Notwithstanding any other provision of law, any aggrieved party to a decision of the Banking Commission shall be entitled to an appeal pursuant to G.S. 53-92."
Sec. 31. G.S. 53-229 is repealed.
Sec. 32. G.S. 53-230 reads as rewritten:
"§ 53-230. Rules.
Notwithstanding the provision of G.S. 53-95, the
Commissioner The Banking Commission may promulgate adopt such
reasonable rules as may be necessary to effectuate the purposes of this
Article."
Sec. 33. G.S. 53-231 reads as rewritten:
"§ 53-231. Appeal of Commissioner's decision.
Notwithstanding any other provision of law, any aggrieved
party may, within 30 days after final decision of the Commissioner and by
written notice to the Commissioner, appeal directly to the North Carolina Court
of Appeals for judicial review on the record. In the event of an appeal, the
Commissioner shall certify the record to the Clerk of the Court of Appeals
within 30 days thereafter. Such record shall include all memoranda, briefs and
any other documents, data, information or evidence submitted by any party to
such proceeding except for material such as trade secrets normally not available
through commercial publication for which such party has made a claim of
confidentiality and requested exclusion from the record which the Commissioner
deems confidential. All factual information contained in any report of
examination or investigation submitted to or obtained by the Commissioner's
staff shall also be made a part of the record unless deemed confidential by the
Commissioner. Any aggrieved party in a proceeding under this Article
may, within 30 days after final decision of the Commissioner, appeal such
decision to the Banking Commission. The Banking Commission, within 30
days of receipt of the notice of appeal, shall approve, disapprove, or
modify the Commissioner's decision. Failure of the Banking Commission to
act within 30 days of receipt of notice of appeal shall constitute a final
decision of the Banking Commission approving the decision of the
Commissioner. Notwithstanding any other provision of law, any aggrieved
party to a decision of the Banking Commission shall be entitled to an appeal
pursuant to G.S. 53-92."
Sec. 34. G.S. 53-232.17 reads as rewritten:
"§ 53-232.17. Appeal of Commissioner's decision.
Notwithstanding any other law, an aggrieved party may,
within 30 days after final decision of the Commissioner and by written notice
to the Commissioner, appeal directly to the North Carolina Court of Appeals for
judicial review on the record. In the event of an appeal, the
Commissioner shall certify the record to the Clerk of the Court of Appeals
within 30 days thereafter. The record shall include all memoranda,
briefs, and any other documents, data, information, or evidence submitted by
any party to the proceeding, except for material such as trade secrets normally
not available through commercial publication of which the party has made a
claim of confidentiality and requested exclusion from the record which the
Commissioner deems confidential. All factual information contained in any
report of examination or investigation submitted to or obtained by the
Commissioner's staff is also made a part of the record unless deemed
confidential by the Commissioner. Any aggrieved party in a proceeding
under this Article may, within 30 days after final decision of the
Commissioner, appeal such decision to the Banking Commission. The Banking
Commission, within 30 days of receipt of the notice of appeal, shall approve,
disapprove, or modify the Commissioner's decision. Failure of the Banking
Commission to act within 30 days of receipt of notice of appeal shall
constitute a final decision of the Banking Commission approving the decision of
the Commissioner. Notwithstanding any other provision of law, any
aggrieved party to a decision of the Banking Commission shall be entitled to an
appeal pursuant to G.S. 53-92.”
Sec. 35. G.S. 53-234(6) reads as rewritten:
"(6) 'Exempt person or organization' means:
(a) Any lender authorized
to engage in business as a bank, a farm credit system, life insurance company,
savings institution, or credit union, or HUD-approved mortgagee under
the laws of the United States or the State of North Carolina and subsidiaries
and affiliates of such lenders, which subsidiaries and affiliates are subject
to the general supervision or regulation of the lender or subject to audit or
examination by a regulatory body or agency of the United States or the State of
North Carolina; the entities listed in this sub-subdivision, and their officers
and employees, are not subject to any of the provisions of this Article; or
(b) Any licensed real estate agent or broker, who is performing those activities subject to the regulation of the North Carolina Real Estate Commission. Notwithstanding the above, an exempt person does not include a real estate agent or broker who receives direct compensation or income in connection with the placement of a mortgage loan; or
(c) Any person who, as seller, receives in one calendar year no more than ten mortgages, deeds of trust, or other security instruments on real estate as security for a purchase money obligation; or
(d) The North Carolina Housing Finance Agency as established by Chapter 122A of the General Statutes and the North Carolina Agricultural Finance Authority as established by Chapter 122D of the General Statutes; or
(e) Any agency of the federal government or any state or municipal government granting first mortgage loans under specific authority of the laws of any state or the United States."
Sec. 36. G.S. 53-235(b) reads as rewritten:
"(b) No mortgage broker,
as defined in G.S. 53-234(4), shall engage in the business of processing,
placing or negotiating a mortgage loan or offering to process, place or
negotiate a mortgage loan in this State without first being registered with the
Commissioner in accordance with the registration procedure provided in this
Article and such regulations as may be promulgated by the Commissioner. Commissioner;
provided, however, any person or entity registered as a mortgage banker
pursuant to subsection (a) of this section shall not be required to separately
register as a mortgage broker to engage in such activity."
Sec. 37. G.S. 53-240 reads as rewritten:
"§ 53-240. Appeal of Commissioner's decision.
Notwithstanding any other provision of law, any aggrieved
party may, within 30 days after final decision of the Commissioner and by
written notice to the Commissioner, appeal directly to the North Carolina Court
of Appeals for judicial review on the record. In the event of an appeal,
the Commissioner shall certify the record to the Clerk of the Court of Appeals
within 30 days thereafter. Such record shall include all memoranda,
briefs and any other documents, data, information or evidence submitted by any
party to such proceeding except for material such as trade secrets normally not
available through commercial publication for which such party has made a claim
of confidentiality and requested exclusion from the record which the
Commissioner deems confidential. All factual information contained in any
report of examination or investigation submitted to or obtained by the
Commissioner's staff shall also be made a part of the record unless deemed
confidential by the Commissioner. The Banking Commission shall have full
authority to review any rule, regulation, order, or act of the Commissioner
done pursuant to or with respect to the provisions of this Article; and any
person aggrieved by any such rule, regulation, order, or act may appeal to the
Banking Commission for review upon giving notice in writing within 20 days
after such rule, regulation, order, or act complained of is adopted, issued, or
done. Notwithstanding any other provision of law, any aggrieved party to
a decision of the Banking Commission shall be entitled to an appeal pursuant to
G.S. 53-92."
Sec. 38. G.S. 53-241 reads as rewritten:
"§ 53-241. Rules and regulations.
Notwithstanding the provision of G.S. 53-95, the
Commissioner The Banking Commission may promulgate adopt such
reasonable rules and regulations as may be necessary to effectuate the purpose
of this Article, to provide for the protection of the borrowing public, and to
instruct mortgage lenders in interpreting this Article."
Sec. 39. G.S. 53-248 reads as rewritten:
"§ 53-248.
Registration procedure. procedure; informal hearing.
(a) Initial Registration. An application to become registered as a facilitator shall be in writing, under oath, and in a form prescribed by the Commissioner. The application shall contain all information prescribed by the Commissioner. Each application for registration shall be accompanied by a fee, payable to the Commissioner, of two hundred fifty dollars ($250.00) for each office where the registrant intends to facilitate refund anticipation loans.
Upon the filing of an application for registration, if the Commissioner finds that the responsibility and general fitness of the applicant are such as to command the confidence of the community and to warrant belief that the business of facilitating refund anticipation loans will be operated within the purposes of this Article, the Commissioner shall register the applicant as a facilitator of refund anticipation loans and shall issue and transmit to the applicant a certificate attesting to the registration. If the Commissioner does not so find, he shall not register the applicant and shall notify the applicant of the reasons for the denial.
Upon receipt of a certificate of registration, the applicant is registered under this Article and may engage in the business of facilitating refund anticipation loans at the offices identified on the application for registration.
(b) Renewal. Each registration as a facilitator of refund anticipation loans shall expire on December 31 following the date it was issued, unless it is renewed for the succeeding year. Before the registration expires, the registrant may renew the registration by filing with the Commissioner an application for renewal in the form and containing all information prescribed by the Commissioner. Each application for renewal of registration shall be accompanied by a fee of one hundred dollars ($100.00) for each office where the registrant intends to facilitate refund anticipation loans during the succeeding year.
Upon the filing of an application for renewal of registration under this Article, the Commissioner shall renew the registration unless the Commissioner determines that the fitness of the registrant or the operations of the registrant would not support registration of the registrant under subsection (a). If the Commissioner makes such a determination, he shall so notify the registrant, stating the reasons for the determination.
(c) Display of Certificate. Each registrant shall prominently display a certificate issued under this Article in each place of business in the State where the registrant facilitates the making of refund anticipation loans.
(d) Within five days of receipt of the Commissioner's notice, as required by subsections (a) and (b) of this section, the applicant may make written demand of the Commissioner for a hearing. The hearing before the Commissioner shall be an informal hearing and shall be held with reasonable promptness."
Sec. 40. G.S. 53-252 reads as rewritten:
"§ 53-252. Appeal of Commissioner's decision.
Notwithstanding any other provision of law, an aggrieved
party may, within 30 days after a final decision of the Commissioner and with
written notice to the Commissioner, appeal the decision directly to the North
Carolina Court of Appeals for judicial review on the record. In the event
of an appeal, the Commissioner shall certify the record to the Clerk of the
Court of Appeals within 30 days after receipt of notice of appeal. The
record shall include all memoranda and briefs, and any other documents, data,
information, or evidence submitted by any party to the proceeding except for
material such as trade secrets normally not available through commercial
publication for which a party has made a claim of confidentiality and requested
exclusion from the record. All factual information contained in any
report submitted to or obtained by the Commissioner's staff shall also be made
a part of the record unless deemed confidential by the Commissioner. The
Commission shall have full authority to review any rule, regulation, order, or
act of the Commissioner done pursuant to or with respect to the provisions of
this Article; and any person aggrieved by any such rule, regulation, order, or
act may appeal to the Commission for review upon giving notice in writing
within 20 days after such rule, regulation, order, or act complained of is
adopted, issued, or done. Notwithstanding any other provision of law, any
aggrieved party to a decision of the Banking Commission shall be entitled to an
appeal pursuant to G.S. 53-92."
Sec. 41. G.S. 53-253 reads as rewritten:
"§ 53-253. Rules; enforcement.
Notwithstanding the provisions of G.S. 53-95, the
Commissioner The Banking Commission may promulgate adopt reasonable
rules as necessary to effectuate the purpose of this Article, to provide for
the protection of the borrowing public, and to assist registrants in
interpreting this Article. In order to enforce this Article, the
Commissioner may make investigations, subpoena witnesses, require audits and
reports, and conduct hearings regarding possible violations of its
provisions."
Sec. 42. G.S. 53-272 reads as rewritten:
"§ 53-272. (Expires October 1, 1995) Appeals.
Notwithstanding any other provision of law, an aggrieved
party may, within 30 days after final decision of the Commissioner, and by
written notice to the Commissioner, appeal directly to the North Carolina Court
of Appeals for judicial review of the record. In the event of an appeal
the Commissioner shall certify the record to the Clerk of the Court of Appeals
no later than 30 days after receipt of the notice of appeal. The record
shall include all memoranda, briefs, and any other documents, data,
information, or evidence submitted by any party to the proceeding. All
factual information contained in a report of examination or investigation
submitted to or otherwise obtained by the Commissioner or the Commissioner's staff
shall be made a part of the record unless the information is deemed
confidential by the Commissioner. The Banking Commission shall have full
authority to review any rule, regulation, order, or act of the Commissioner
done pursuant to or with respect to the provisions of this Article; and any
person aggrieved by any such rule, regulation, order, or act may appeal to the
Commission for review upon giving notice in writing within 20 days after such
rule, regulation, order, or act complained of is adopted, issued, or
done. Notwithstanding any other provision of law, any aggrieved party to
a decision of the Banking Commission shall be entitled to an appeal pursuant to
G.S. 53-92."
Sec. 43. This act is effective upon ratification.
In the General Assembly read three times and ratified this the 31st day of May, 1995.
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Dennis A. Wicker
President of the Senate
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Harold J. Brubaker
Speaker of the House of Representatives