Chapter 192 Oregon Laws 2005

AN ACT

HB 2981

Relating to financial institutions; creating new provisions; and amending ORS 707.025, 707.110 and 716.040.

Be It Enacted by the People of the State of Oregon:

SECTION 1. Sections 2 to 5 of this 2005 Act are added to and made a part of ORS chapter 707.

SECTION 2. (1) Each institution and each Oregon stock savings bank shall continuously maintain in this state a registered agent and registered office that may be, but need not be, the same as any of its places of business.

(2) A registered agent shall be:

(a) An individual who resides in this state and whose business office is identical to the registered office;

(b) A domestic corporation, domestic limited liability company, domestic professional corporation or domestic nonprofit corporation whose business office is identical to the registered office; or

(c) A foreign corporation, foreign limited liability company, foreign professional corporation or foreign nonprofit corporation authorized to transact business in this state whose business office is identical to the registered office.

SECTION 3. (1) An institution or Oregon stock savings bank may change its registered office or registered agent by delivering to the Director of the Department of Consumer and Business Services for filing a statement of change that sets forth:

(a) The name of the institution or Oregon stock savings bank;

(b) If the registered office is to be changed, the address, including street and number, of the new registered office;

(c) If the registered agent is to be changed, the name of the new registered agent and that the new agent has consented to the appointment; and

(d) That after the change or changes are made, the street addresses of its registered office and the business office of its registered agent will be identical.

(2) If a registered agent changes the street address of the agent’s business office, the registered agent shall change the street address of the registered office of the institution or Oregon stock savings bank for which the agent is the registered agent by notifying the institution or Oregon stock savings bank in writing of the change and signing, either manually or in facsimile, and delivering to the director a statement that complies with the requirements of subsection (1) of this section and recites that the institution or Oregon stock savings bank has been notified of the change.

(3) The filing of the statement by the director terminates the existing registered office or agent, or both, on the effective date of the filing and establishes the newly appointed registered office or agent, or both, as that of the institution or Oregon stock savings bank.

SECTION 4. (1) A registered agent may resign as agent upon delivering a signed statement to the Director of the Department of Consumer and Business Services and giving notice in the form of a copy of the statement to the institution or Oregon stock savings bank. The statement may include a statement that the registered office is also discontinued.

(2) Upon delivery of the signed statement, the director shall file the resignation statement. The copy of the statement given to the institution or Oregon stock savings bank under subsection (1) of this section shall be addressed to the institution or Oregon stock savings bank at its mailing address or principal office as shown by the records of the director.

(3) The agency appointment is terminated and the registered office discontinued, if so provided, on the 31st day after the date on which the statement was filed by the director unless, prior to that date, the institution or Oregon stock savings bank appoints a successor registered agent as provided in section 3 of this 2005 Act, thereby terminating the capacity of such agent.

SECTION 5. (1) The registered agent appointed by an institution or Oregon stock savings bank shall be an agent of the institution or Oregon stock savings bank upon whom any process, notice or demand required or permitted by law to be served upon the institution or Oregon stock savings bank may be served.

(2) The Director of the Department of Consumer and Business Services shall be an agent of an institution or Oregon stock savings bank, including a dissolved institution or Oregon stock savings bank, upon whom any such process, notice or demand may be served whenever the institution or Oregon stock savings bank fails to appoint or maintain a registered agent in this state or whenever the institution’s or Oregon stock savings bank’s registered agent cannot with reasonable diligence be found at the registered office.

(3) Service shall be made on the director by:

(a) Serving the director or a clerk on duty at the office of the director a copy of the process, notice or demand, with any papers required by law to be delivered in connection with the service, and the required fee for each party being served or by mailing to the office of the director a copy of the process, notice or demand and the required fee for each party being served by certified or registered mail;

(b) Transmittal by the person instituting the proceedings of notice of the service on the director and a copy of the process, notice or demand and accompanying papers to the institution or Oregon stock savings bank being served by certified or registered mail:

(A) At the last registered office of the institution or Oregon stock savings bank as shown by the records of the director; and

(B) At such address the use of which the person initiating the proceedings knows or, on the basis of reasonable inquiry, has reason to believe is most likely to result in actual notice; and

(c) Filing with the appropriate court or other body, as part of the return of service, the return receipt of mailing and an affidavit of the person initiating the proceedings stating that this section has been complied with.

(4) The director shall keep a record of all processes, notices and demands served upon the director under this section.

(5) After completion of initial service upon the director, no additional documents need be served upon the director to maintain jurisdiction in the same proceeding or to give notice of any motion or provisional process.

(6) Nothing contained in this section shall limit or affect the right to serve any process, notice or demand required or permitted by law to be served upon an institution or Oregon stock savings bank in any other manner now or hereafter permitted by law, or enlarge the purposes for which service on the director is permitted where such purposes are limited by other provisions of law.

SECTION 6. ORS 707.110 is amended to read:

707.110. (1) Any number of persons, not less than five, may associate themselves by articles of incorporation to establish an institution or Oregon stock savings bank. The articles of incorporation shall be executed in duplicate, signed by the prospective incorporators and submitted to the Director of the Department of Consumer and Business Services.

(2) The articles of incorporation shall specify:

(a) The name of the institution or Oregon stock savings bank.

(b) The initial principal place where its business is to be transacted, designated by legal description or street and number in the city or town.

(c) The address, including street and number, and mailing address, if different, of its initial registered office and the name of its initial registered agent at that office.

[(c)] (d) The names of the prospective incorporators.

[(d)] (e) The term of its existence, which may be perpetual.

[(e)] (f) The purpose for which the institution or Oregon stock savings bank is formed.

[(f)] (g) The initial board of directors of the institution or Oregon stock savings bank, composed of not fewer than five persons, at least three of whom shall be prospective incorporators.

[(g)] (h) If the stockholders will have preemptive rights, a statement of such rights.

(3) In addition, the articles of incorporation:

(a) Must prescribe the classes of shares and the number of shares of each class that the institution or Oregon stock savings bank is authorized to issue. If more than one class of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class, and prior to the issuance of shares of a class, the preferences, limitations and relative rights of that class must be described in the articles of incorporation. All shares of a class must have preferences, limitations and relative rights identical to those of other shares of the same class except to the extent otherwise permitted by ORS 707.262.

(b) Must authorize one or more classes of shares that together have unlimited voting rights, and one or more classes of shares which may be the same class or classes as those with voting rights, that together are entitled to receive the net assets of the institution or Oregon stock savings bank upon dissolution.

(A) Have special, conditional or limited voting rights, or no voting rights, except to the extent prohibited by this chapter;

(B) Are redeemable or convertible as specified in the articles of incorporation:

(i) At the option of the institution or Oregon stock savings bank, the shareholder or another person or upon the occurrence of a designated event;

(ii) For cash, indebtedness, securities or other property; or

(iii) In a designated amount or in an amount determined in accordance with a designated formula or by reference to extrinsic data or events;

(C) Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative or partially cumulative; or

(D) Have preference over any other class of shares with respect to distributions, including dividends and distributions upon the dissolution of the institution or Oregon stock savings bank.

(4) The description of the designations, preferences, limitations and relative rights of share classes in subsection (3)(c) of this section is not exhaustive.

(5) The articles of incorporation also may contain any lawful provisions:

(a) Regulating the business or conduct of affairs of the institution or Oregon stock savings bank;

(b) Defining, limiting and regulating the powers of the directors; or

(c) Eliminating or limiting the personal liability of a director to the institution or Oregon stock savings bank or its shareholders for monetary damages for conduct as a director, provided that no such provisions shall eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective, and such provision shall not eliminate or limit the liability of a director for:

(A) Any breach of the director’s duty of loyalty to the institution or Oregon stock savings bank or its shareholders;

(B) Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

(D) Any transaction from which the director derived an improper personal benefit.

SECTION 7. Sections 8 to 11 of this 2005 Act are added to and made a part of ORS chapter 716.

SECTION 8. (1) Each Oregon savings bank shall continuously maintain in this state a registered agent and registered office that may be, but need not be, the same as any of its places of business.

(2) A registered agent shall be:

(a) An individual who resides in this state and whose business office is identical to the registered office;

(b) A domestic corporation, domestic limited liability company, domestic professional corporation or domestic nonprofit corporation whose business office is identical to the registered office; or

SECTION 9. (1) An Oregon savings bank may change its registered office or registered agent by delivering to the Director of the Department of Consumer and Business Services for filing a statement of change that sets forth:

(a) The name of the Oregon savings bank;

(b) If the registered office is to be changed, the address, including street and number, of the new registered office;

(c) If the registered agent is to be changed, the name of the new registered agent and that the new agent has consented to the appointment; and

(d) That after the change or changes are made, the street addresses of its registered office and the business office of its registered agent will be identical.

(2) If a registered agent changes the street address of the agent’s business office, the registered agent shall change the street address of the registered office of the Oregon savings bank for which the agent is the registered agent by notifying the Oregon savings bank in writing of the change and signing, either manually or in facsimile, and delivering to the director a statement that complies with the requirements of subsection (1) of this section and recites that the Oregon savings bank has been notified of the change.

SECTION 10. (1) A registered agent may resign as agent upon delivering a signed statement to the Director of the Department of Consumer and Business Services and giving notice in the form of a copy of the statement to the Oregon savings bank. The statement may include a statement that the registered office is also discontinued.

(2) Upon delivery of the signed statement, the director shall file the resignation statement. The copy of the statement given to the Oregon savings bank under subsection (1) of this section shall be addressed to the Oregon savings bank at its mailing address or principal office as shown by the records of the director.

(3) The agency appointment is terminated and the registered office discontinued, if so provided, on the 31st day after the date on which the statement was filed by the director unless, prior to that date, the Oregon savings bank appoints a successor registered agent as provided in section 9 of this 2005 Act, thereby terminating the capacity of such agent.

SECTION 11. (1) The registered agent appointed by an Oregon savings bank shall be an agent of the Oregon savings bank upon whom any process, notice or demand required or permitted by law to be served upon the Oregon savings bank may be served.

(2) The Director of the Department of Consumer and Business Services shall be an agent of an Oregon savings bank, including a dissolved Oregon savings bank, upon whom any such process, notice or demand may be served whenever the Oregon savings bank fails to appoint or maintain a registered agent in this state or whenever the Oregon savings bank’s registered agent cannot with reasonable diligence be found at the registered office.

(3) Service shall be made on the director by:

(b) Transmittal by the person instituting the proceedings of notice of the service on the director and a copy of the process, notice or demand and accompanying papers to the Oregon savings bank being served by certified or registered mail:

(A) At the last registered office of the Oregon savings bank as shown by the records of the director; and

(B) At such address the use of which the person initiating the proceedings knows or, on the basis of reasonable inquiry, has reason to believe is most likely to result in actual notice; and

(4) The director shall keep a record of all processes, notices and demands served upon the director under this section.

(6) Nothing contained in this section shall limit or affect the right to serve any process, notice or demand required or permitted by law to be served upon an Oregon savings bank in any other manner now or hereafter permitted by law, or enlarge the purposes for which service on the director is permitted where such purposes are limited by other provisions of law.

SECTION 12. ORS 716.040 is amended to read:

716.040. (1) Not less than five persons may associate themselves by articles of incorporation to form an Oregon savings bank, either as an Oregon stock savings bank or as an Oregon nonstock bank. If the Oregon savings bank is organized as an Oregon stock savings bank, its articles of incorporation shall conform to the provisions set forth in ORS 707.110. If the Oregon savings bank is organized as an Oregon nonstock bank, its articles of incorporation shall conform to the provisions of subsection (2) of this section, be executed in duplicate, signed by the incorporators and submitted to the Director of the Department of Consumer and Business Services.

(2) The articles of incorporation of an Oregon nonstock bank shall specify:

(a) The name by which the Oregon nonstock bank is to be known.

(b) The initial principal place where its business is to be transacted, naming the city or town and county.

(c) The address, including street and number, and mailing address, if different, of its initial registered office and the name of its initial registered agent at that office.

[(c)] (d) The name of each incorporator.

[(d)] (e) The term of its existence, which may be perpetual.

[(e)] (f) The purpose for which it is organized.

[(f)] (g) The sums that each incorporator will contribute in cash to the initial guaranty fund and the expense fund, as provided in ORS 716.060 and 716.070.

[(g)] (h) The initial board of directors of the Oregon nonstock bank, composed of not less than five persons, at least three of whom shall be incorporators, who shall serve until their successors are regularly elected and qualified.

(3) The articles of incorporation also may contain any lawful provisions for the regulation of the business, for the conduct of the affairs of the Oregon nonstock bank, defining and regulating the powers of the directors or eliminating or limiting the personal liability of directors to the extent permitted under ORS 707.110 (5)(c).

SECTION 13. ORS 707.025 is amended to read:

707.025. (1) A banking institution may be organized under this section solely for the purpose of merging with, acquiring the assets of or assuming the liabilities of one or more existing financial institutions pursuant to ORS chapter 711 and, except as otherwise provided in this section, without authority to engage in or transact banking or trust business.

(2) The banking institution may be organized under this section by one or more persons or a corporation.

(3) Notwithstanding ORS 707.050, 707.070, 707.080 to 707.120, 707.140, 707.170, 707.200 and 707.210 (1) and such other sections as may specifically be inconsistent with this section, a banking institution described in subsection (1) of this section shall be organized as follows:

(a) The incorporator shall submit to the Director of the Department of Consumer and Business Services for filing articles of incorporation executed in duplicate, signed by the prospective incorporator or incorporators, and such other information as the director may require, which may include the additional information required in an application under ORS 707.070 or 716.028 if the banking institution organized under this section is to survive the merger, will purchase assets or will assume liabilities, together with an organizational fee of $2,500.

(b) Such articles of incorporation shall specify:

(A) The name and address of each incorporator.

(B) The information required under ORS 707.110 (2)(a), (b) and [(g)] (h) and (3).

(D) The purpose of the corporation, which shall be limited to the purposes set forth in subsection (1) of this section. However, if the corporation is to be the resulting bank in such merger, the articles may also contain all purposes allowed a banking institution under the Bank Act, provided the implementation of such purposes are conditioned upon consummation of such merger.

(E) The name and address of each director of the board of directors, which shall be composed of not less than three directors.

(4) Unless the director finds that approval of the articles would violate ORS 707.145 or other applicable law, the director shall file the articles and issue a certificate of incorporation in accordance with ORS 707.120, if:

(a) The director finds that the articles conform to subsection (3) of this section; and

(b) The director finds that the banking institution, following any merger or assumption of liabilities, will meet the requirements of ORS 707.080 (1) and (2).

(5) Upon issuance of the certificate of incorporation, the corporate existence of the banking institution shall begin and the banking institution may issue stock.

(6)(a) After the issuance of the certificate of incorporation, the new banking institution shall file a certified copy of its bylaws with the director within 90 days. If the director finds such bylaws to be consistent with the requirements of the Bank Act, the director shall issue a provisional charter to such bank.

(b) The provisional charter shall expire one year after its date of issuance. However, the director may extend such expiration period. If a merger or assumption of liabilities is not consummated before the provisional charter expires, the interim bank shall cease to exist and its articles of incorporation and charter shall be void.

(c) For purposes of ORS chapter 711, a provisional charter issued under this section shall be deemed a charter, where appropriate.

(d) If the merger or assumption of liabilities is consummated and the banking institution organized under this section survives the transaction, the director shall issue to the banking institution a charter to do a banking business either as an Oregon commercial bank or as an Oregon stock savings bank.

(7) A banking institution organized solely for the purposes set forth in subsection (1) of this section for which a charter has been issued may, with the director’s approval, have initial paid-in capital in an amount less than that required by ORS 707.050 prior to consummation of a proposed merger.

SECTION 14. (1) Sections 2 to 5 and 8 to 11 of this 2005 Act apply to institutions, Oregon stock savings banks and Oregon savings banks organized prior to, on or after the effective date of this 2005 Act.

(2) An institution, Oregon stock savings bank or Oregon savings bank organized prior to the effective date of this 2005 Act that does not have a registered agent or registered office in this state on the effective date of this 2005 Act shall designate a registered agent or registered office as provided in section 2, 3, 8 or 9 of this 2005 Act not later than December 31, 2006.

(3) The amendments to ORS 707.110 and 716.040 by sections 6 and 12 of this 2005 Act apply only to articles of incorporation filed on or after the effective date of this 2005 Act. An institution, Oregon stock savings bank or Oregon savings bank organized prior to the effective date of this 2005 Act is not required to amend the articles of incorporation of the institution, Oregon stock savings bank or Oregon savings bank to comply with the requirements of ORS 707.110 or 716.040, as amended by sections 6 and 12 of this 2005 Act.

Approved by the Governor June 8, 2005

Filed in the office of Secretary of State June 9, 2005

Effective date January 1, 2006

__________