69th OREGON LEGISLATIVE ASSEMBLY--1997 Regular Session
Enrolled
Senate Bill 125
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Department of Consumer and
Business Services)
CHAPTER ................
AN ACT
Relating to banking; creating new provisions; amending ORS
20.160, 22.020, 23.350, 29.185, 29.205, 29.377, 41.580, 52.170,
59.015, 59.175, 59.840, 59.850, 74.1040, 74.1050, 74A.1050,
82.025, 83.510, 86.170, 86.205, 86.610, 86.620, 86.790, 87.342,
87.435, 92.060, 92.065, 94.881, 94.890, 97.820, 98.302, 98.308,
98.412, 99.050, 105.480, 105.515, 107.089, 112.535, 114.535,
116.083, 118.300, 124.115, 125.095, 125.475, 126.805, 128.100,
128.155, 128.400, 128.412, 128.570, 165.072, 166.715, 180.540,
192.550, 192.800, 194.164, 198.220, 204.020, 210.120, 210.150,
260.007, 262.065, 275.314, 279.335, 284.750, 284.755, 284.760,
284.765, 284.780, 284.790, 285.466, 285.507, 288.875, 292.042,
292.067, 293.180, 294.035, 295.005, 305.140, 311.385, 311.395,
314.397, 314.610, 316.164, 316.472, 316.683, 317.097, 323.120,
324.200, 328.260, 334.225, 337.090, 348.625, 352.805, 366.470,
374.310, 381.270, 384.140, 407.201, 441.555, 447.118, 452.550,
453.065, 458.240, 461.330, 462.050, 462.065, 466.706, 468A.395,
471.645, 479.840, 480.150, 508.415, 537.753, 539.180, 543.560,
545.685, 547.125, 547.555, 552.428, 554.120, 554.220, 554.280,
558.050, 565.070, 565.210, 565.315, 576.385, 577.511, 578.110,
579.130, 585.045, 599.610, 603.025, 645.005, 646.200, 646.382,
646.386, 646.388, 646.390, 646.551, 646.605, 652.340, 657.505,
657.507, 657.545, 658.075, 671.690, 682.105, 696.247, 696.375,
696.395, 697.622, 705.105, 706.005, 706.500, 706.520, 706.530,
706.544, 706.560, 706.570, 706.575, 706.580, 706.600, 706.610,
706.630, 706.650, 706.660, 706.680, 706.690, 706.720, 706.725,
706.730, 706.780, 706.790, 706.795, 706.815, 706.980, 707.005,
707.010, 707.020, 707.025, 707.050, 707.070, 707.075, 707.080,
707.090, 707.100, 707.110, 707.120, 707.140, 707.145, 707.150,
707.155, 707.160, 707.170, 707.180, 707.200, 707.210, 707.220,
707.230, 707.242, 707.244, 707.246, 707.248, 707.250, 707.252,
707.254, 707.256, 707.258, 707.260, 707.262, 707.266, 707.268,
707.270, 707.272, 707.350, 707.380, 707.400, 707.610, 707.611,
707.612, 707.613, 707.615, 707.617, 707.619, 707.620, 707.621,
707.623, 707.625, 707.642, 707.644, 707.646, 707.660, 707.670,
707.675, 707.680, 707.690, 707.700, 707.705, 707.710, 707.720,
707.730, 707.735, 707.740, 707.744, 707.746, 707.748, 707.752,
707.754, 707.756, 707.758, 707.762, 707.764, 709.030, 709.040,
709.050, 709.060, 709.070, 709.080, 709.120, 709.150, 709.160,
709.170, 709.175, 709.190, 709.200, 709.220, 709.270, 709.280,
709.300, 709.330, 709.350, 709.390, 709.400, 709.410, 709.420,
709.430, 709.440, 709.460, 711.040, 711.045, 711.055, 711.060,
711.217, 711.225, 711.250, 711.405, 711.415, 711.419, 711.435,
Enrolled Senate Bill 125 (SB 125-B) Page 1
711.465, 711.470, 711.510, 711.515, 711.520, 711.525, 711.577,
711.585, 711.620, 711.625, 711.630, 711.635, 711.640, 711.645,
711.650, 711.655, 711.660, 711.665, 711.670, 713.010, 713.016,
713.020, 713.025, 713.035, 713.045, 713.090, 713.130, 713.140,
713.150, 713.160, 713.170, 713.190, 713.200, 713.210, 713.220,
713.230, 713.240, 713.250, 713.260, 714.210, 714.270, 715.045,
715.055, 716.024, 716.028, 716.032, 716.040, 716.055, 716.060,
716.070, 716.080, 716.100, 716.120, 716.135, 716.140, 716.145,
716.160, 716.210, 716.320, 716.420, 716.450, 716.594, 716.600,
716.626, 716.630, 716.780, 716.790, 716.800, 716.830, 716.840,
716.850, 716.855, 716.900, 716.905, 716.910, 717.080, 722.004,
722.014, 722.034, 722.056, 722.058, 722.066, 722.068, 722.072,
722.202, 722.206, 722.257, 722.304, 722.308, 722.354, 723.122,
726.070, 731.328, 732.105, 744.057, 744.061, 744.225, 746.182,
746.185, 750.045, 776.540, 803.092, 803.220, 822.030, 822.120,
825.145, 825.166 and 825.354 and section 2, chapter 791, Oregon
Laws 1989 and section 5, chapter 967, Oregon Laws 1989, and
ORCP 82A, 82B, 82C and 84A; and repealing ORS 705.500, 705.510,
705.600, 706.670, 706.800, 706.805, 707.023, 707.029, 707.130,
707.215, 707.240, 707.264, 707.310, 707.320, 707.330, 707.340,
707.355, 707.370, 707.420, 707.430, 707.440, 707.450, 707.640,
707.855, 707.860, 708.006, 708.010, 708.025, 708.026, 708.078,
708.082, 708.088, 708.100, 708.108, 708.116, 708.126, 708.136,
708.146, 708.205, 708.210, 708.212, 708.215, 708.220, 708.225,
708.230, 708.235, 708.250, 708.265, 708.272, 708.300, 708.305,
708.310, 708.315, 708.320, 708.325, 708.330, 708.335, 708.340,
708.345, 708.355, 708.360, 708.365, 708.370, 708.375, 708.380,
708.385, 708.388, 708.395, 708.400, 708.405, 708.410, 708.415,
708.420, 708.428, 708.430, 708.431, 708.432, 708.433, 708.434,
708.435, 708.440, 708.444, 708.446, 708.451, 708.455, 708.460,
708.465, 708.470, 708.475, 708.480, 708.484, 708.486, 708.488,
708.489, 708.491, 708.500, 708.506, 708.508, 708.520, 708.525,
708.530, 708.535, 708.555, 708.600, 708.606, 708.611, 708.616,
708.621, 708.626, 708.631, 708.636, 708.641, 708.646, 708.651,
708.656, 708.661, 708.715, 708.720, 708.980, 708.990, 711.005,
711.010, 711.015, 711.017, 711.020, 711.022, 711.025, 711.030,
711.032, 711.035, 711.042, 711.047, 711.050, 711.110, 711.112,
711.115, 711.205, 711.207, 711.211, 711.305, 711.310, 711.315,
711.320, 713.011, 713.012, 713.050, 713.060, 713.070, 713.080,
713.100, 713.110, 713.120, 713.180, 714.030, 714.040, 714.060,
714.080, 714.110, 714.130, 714.133, 714.135, 714.140, 714.150,
714.160, 714.170, 714.180, 714.200, 714.220, 714.240, 714.250,
714.260, 715.010, 715.015, 715.025, 715.035, 715.065, 715.070,
715.910, 716.020, 716.029, 716.036, 716.085, 716.090, 716.110,
716.150, 716.155, 716.270, 716.280, 716.285, 716.290, 716.295,
716.330, 716.645, 716.670, 716.760, 716.920, 716.925, 716.930,
716.935 and 716.990 and section 1, chapter 101, Oregon Laws
1997 (Enrolled Senate Bill 248), section 1, chapter 148, Oregon
Laws 1997 (Enrolled Senate Bill 213), sections 1 and 2, chapter
___, Oregon Laws 1997 (Enrolled Senate Bill 674), section 215,
chapter ___, Oregon Laws 1997 (Enrolled House Bill 2509), and
sections 1, 3 and 4, chapter ___, Oregon Laws 1997 (Enrolled
House Bill 2794).
Be It Enacted by the People of the State of Oregon:
{ +
AMENDMENTS TO ORS CHAPTER 706 + }
Enrolled Senate Bill 125 (SB 125-B) Page 2
SECTION 1. ORS 706.005 is amended to read:
706.005. As used in the Bank Act, unless the context requires
otherwise:
{ + (1) 'Access area' means any paved walkway or sidewalk
within 50 feet of an automated teller machine or night deposit
facility. 'Access area' does not include publicly maintained
sidewalks or roads.
(2) 'Access device' means:
(a) An 'access device' as defined in Federal Reserve Board
Regulation E (12 C.F.R. Part 205) adopted under the Electronic
Fund Transfer Act (15 U.S.C. 1601, et seq.); or
(b) A key or other mechanism issued by a financial institution
to a customer to give the customer access to the institution's or
bank's night deposit facility. + }
{ - (1) 'Action' includes suits and legal proceedings. - }
{ - (2) 'Appropriate state supervisor' means the home state
supervisor with supervisory and regulatory jurisdiction over an
out-of-state banking institution in its home state. - }
{ + (3) 'Acquisition transaction' means:
(a) The sale and purchase of all or substantially all of the
assets of a bank that is not in the ordinary course of business
of such bank; or
(b) The transfer and assumption of all or substantially all of
the liabilities of a bank. + }
{ - (3) - } { + (4) + } 'Automated teller machine' or 'ATM'
{ - has the meaning given those terms under ORS 714.200 - }
{ + means any electronic information processing device located
in this state that:
(a) Accepts or dispenses cash in connection with a credit,
deposit or convenience account, provides information and
initiates transactions in accordance with the request or
instruction of a customer or the customer's agent; and
(b) Is unstaffed except for persons installing the device,
providing security or providing periodic servicing, maintenance
or repair. The term does not include devices used solely to
facilitate check guarantees or check authorizations, or used in
connection with the acceptance or dispensing of cash on a person
to person basis, such as by a store cashier + }.
{ - (4) 'Bank' means a corporation with capital stock that is
organized under the laws of this state and is authorized to
engage in a banking business. 'Bank' includes the banking
department of a trust company authorized to do a banking
business. - }
(5) 'Bank Act' means ORS chapters 706 to 716.
{ - (6) 'Bank holding company' means any company that is a
bank holding company under the federal Bank Holding Company Act
of 1956, as amended, 12 U.S.C. 1841, et seq. - }
{ - (7) - } { + (6) + } 'Banking business' { + or
'business of banking' + } means the business of
{ - soliciting, - } receiving or accepting money or its
equivalent on deposit as a regular business whether the deposit
is made subject to check or is evidenced by a certificate of
deposit, a pass book or other writing { + or evidence + }, but
does not include:
(a) Depositing money or its equivalent in escrow or with an
agent, pending investments in real estate or securities for or on
account of a principal; { - or - }
(b) The business of a savings and loan association or a
{ - building and loan association. - } { + credit union;
Enrolled Senate Bill 125 (SB 125-B) Page 3
(c) Deposits accepted in connection with the purchase or lease
of property or services; or
(d) Accepting deposits through an ATM or night deposit
facility. + }
{ - (8) 'Banking day' means a day a banking institution is
required to be open for the normal conduct of its business but
does not include Saturday or any day the bank is closed under ORS
707.430. - }
{ - (9) 'Banking institution' means a bank, a trust company,
a savings bank or a stock savings bank. - }
{ + (7) 'Banking day' has the meaning given that term in
section 1c of this 1997 Act. + }
{ - (10) - } { + (8) + } 'Branch' means an office or other
place, except a principal place of business { + or an ATM + },
at which:
(a) A bank { - receives money or its equivalent from the
public for deposit and conducts a general - } { + engages
in + } banking business { + ; or + } { - . - }
(b) A trust company { - engages in the business of acting as
a fiduciary - } { + transacts trust business + }.
{ - (c) ATM facilities are installed and operated off the
premises of the principal place of business and branches of
institutions described in paragraphs (a) and (b) of this
subsection, and of national banks in accordance with ORS 714.210
to 714.992. - }
{ + (9) 'Candlefoot power' means a light intensity of candles
on a horizontal plane at 36 inches above ground level and 5 feet
in front of the area to be measured. + }
{ - (11) 'Capital' means the aggregate par value of all
classes of outstanding stock of an institution. - }
{ + (10) 'Capital debentures' means capital notes, capital
debentures and any other form of unsecured obligations issued by
an institution or stock savings bank to evidence borrowings where
the rights of the lender are subordinate to the rights of the
depositors. + }
{ - (12) 'Commercial bank' means a bank, a savings bank, a
stock savings bank, a national bank, a foreign institution or an
extranational institution. - }
{ + (11)(a) 'Defined parking area' means that portion of any
parking area opened for customer parking that is:
(A) Contiguous to the access area of an ATM or night deposit
facility;
(B) Regularly, principally and lawfully used for parking by
users of the ATM or night deposit facility while the users
conduct transactions during hours of darkness; and
(C) Owned or leased by the operator of the ATM or night deposit
facility or owned or controlled by the party leasing the ATM or
night deposit facility site to the operator.
(b) 'Defined parking area' does not include any parking area
that is not open or regularly used for parking by users of the
ATM or night deposit facility who are conducting transactions
during the hours of darkness. A parking area is not open if it is
physically closed to access or if conspicuous signs indicate that
it is closed. If a multiple level parking area satisfies the
conditions of paragraph (a) of this subsection and would
therefore otherwise be a defined parking area, only the single
parking level designated by the operator of the ATM and night
deposit facility to be the most directly accessible to the users
of the ATM and night deposit facility shall be a defined parking
area. + }
Enrolled Senate Bill 125 (SB 125-B) Page 4
{ - (13) 'Demand deposits' means all deposits payable on
demand. - }
{ - (14) - } { + (12) + } 'Department' means the Department
of Consumer and Business Services.
{ - (15) - } { + (13) + } 'Director' means the Director of
the Department of Consumer and Business Services.
{ + (14) 'Document of title' means document of title as
defined in ORS 71.2010. + }
{ - (16) 'Extranational institution' includes: - }
{ - (a) A corporation organized under the laws of a nation
other than the United States and doing a banking or trust
business within this state; - }
{ - (b) An unincorporated company, partnership or association
of two or more individuals organized under the laws of a nation
other than the United States and doing a banking or trust
business within this state; - }
{ - (c) An incorporated company, partnership or association
of two or more individuals doing a banking or trust business if
persons who are not citizens of the United States and not
residents of this state own a majority interest of the business
and are entitled to more than half the profits of the business,
or who would, if it were dissolved, be entitled to more than
one-half the net assets of the business; or - }
{ - (d) An individual who is not a citizen of the United
States and not a resident of this state doing a banking or trust
business in the name and right of the individual. - }
{ - (17) - } { + (15) + } 'Federal Reserve Act' means the
Act of Congress approved December 23, 1913 (38 Stat. 251), as
amended.
{ + (16) 'Federal Reserve Bank' means the Federal Reserve
Banks created and organized under the authority of the Federal
Reserve Act. + }
{ + (17) 'Federal Reserve Board' means the Federal Reserve
Board created and described in the Federal Reserve Act. + }
{ - (18) 'Fiduciary' means a personal representative,
conservator, receiver, trustee, assignee for the benefit of
creditors or one acting in a court-appointed position of trust or
any other position of trust. - }
{ - (19) 'Financial institution' means banking institutions,
national banks, extranational institutions, foreign institutions,
federal associations as defined in ORS 722.004, savings
associations as defined in ORS 722.004, credit unions as defined
in ORS 723.006, out-of-state credit unions doing business in this
state under ORS 723.042 and federal credit unions. - }
{ - (20)(a) 'Foreign institution' includes: - }
{ - (A) A corporation organized under the laws of another
state doing a banking or trust business within this state, except
a national bank whose principal office as designated in its
articles of incorporation is located in the State of Oregon; - }
{ - (B) An unincorporated company, partnership or association
of two or more individuals organized under the laws of another
state doing a banking or trust business; - }
{ - (C) An incorporated company, partnership or association
of two or more individuals doing a banking or trust business if
persons who are citizens of the United States but not residents
of this state own a majority interest of the business and are
entitled to more than half the profits of the business, or who
would, if it were dissolved, be entitled to more than one-half
the net assets of the business; or - }
Enrolled Senate Bill 125 (SB 125-B) Page 5
{ - (D) Every citizen of the United States but nonresident of
this state doing a banking or trust business in the name and
right of the citizen. - }
{ - (b) 'Foreign institution' does not include a national
bank that has its principal office, as designated in its articles
of incorporation, outside the State of Oregon, and that maintains
a branch in the State of Oregon on January 1, 1974. - }
{ - (21) - } { + (18) + } 'Home state' means { + : + }
{ - , - }
{ + (a) + } With respect to { - an out-of-state banking
institution - } { + a state bank + }, the state under the laws
of which the { - out-of-state banking institution - }
{ + state bank + } is incorporated or otherwise
organized { + ; + } { - . - }
{ + (b) With respect to a federal bank, the state in which
the main office of the federal bank is located;
(c) With respect to an extranational institution, the state
determined to be the home state by election of the extranational
institution, or in default of such election, by the Board of
Governors of the Federal Reserve System; and
(d) With respect to a bank holding company, the state in which
the total deposits of all banking subsidiaries of such company
are the largest on the date on which the company becomes a bank
holding company.
(19) 'Hours of darkness' means the period that commences 30
minutes after sunset and ends 30 minutes before sunrise. + }
{ - (22) 'In-state banking institution' means a banking
institution, a national bank having its principal place of
business in Oregon or a bank holding company having its principal
place of business in Oregon. - }
{ - (23) 'Institution' means a bank or a trust company. - }
{ - (24) 'Like-type banking organization' means, with respect
to an out-of-state banking institution, an in-state banking
institution or a savings association or federal association as
defined in ORS 722.004 with the type of charter that most nearly
corresponds to the charter of the out-of-state banking
institution, as determined by the director. - }
{ + (20) 'Merger' includes consolidation. + }
{ - (25) 'National bank' means a national bank authorized to
do business in this state. - }
{ + (21) 'Night deposit facility' means a receptacle that is
provided by a financial institution for the use of the
institution's customers in delivering cash, checks and other
items to the financial institution.
(22) 'Obligations' includes:
(a) The direct liability of the maker or acceptor of paper
discounted with or sold to an institution;
(b) The liability of the drawer, indorser or assignor;
(c) If obligations of a copartnership or association, the
obligations of the several members of the copartnership or
association;
(d) If obligations of a corporation, the obligations of all
subsidiaries of the corporation in which the corporation owns or
controls 50 percent or more of the capital stock; and
(e) The liability of a lessee under a lease. + }
{ - (26) - } { + (23) + } 'Officer' of a banking
institution means a chief executive officer, president,
{ + any + } vice president, secretary, treasurer or cashier.
Enrolled Senate Bill 125 (SB 125-B) Page 6
{ + (24) 'Operator' means any financial institution or other
business entity, or any person who operates an ATM or night
deposit facility. + }
{ - (27) 'Out-of-state banking institution' means any bank
organized under the laws of any state other than Oregon, or any
national bank that has its principal place of business in one of
such states, or bank holding company that has its principal place
of business in one of such states. - }
{ - (28) 'Personal representative' means a personal
representative as defined in ORS 111.005. - }
{ - (29) 'Principal place of business' of a national bank or
bank holding company means that state in which the deposits of
the national bank or the total deposits of all the bank holding
company's banking subsidiaries are the largest. - }
{ - (30) 'Principal place of business' means the location in
Oregon of the principal office or main office of a banking
institution. - }
{ - (31) 'Savings bank' means a corporation without capital
stock which is organized under the laws of this state and is
authorized to engage in a banking business. - }
{ - (32) 'State' means any state of the United States, other
than this state, the District of Columbia, any territory of the
United States, Guam, American Samoa, the Trust Territory of the
Pacific Islands, the United States Virgin Islands and the
Northern Mariana Islands. - }
{ - (33) 'Stock savings bank' means a corporation with
capital stock organized under the laws of this state, authorized
to engage in a banking business, and which has converted from a
savings bank under provisions of ORS chapter 716, from a stock
savings association chartered under the provisions of ORS chapter
722, from a federally chartered stock savings and loan
association or a federally chartered stock savings bank or which
was converted to a federal stock savings bank under the
provisions of the Garn-St. Germain Depository Institutions Act
of 1982 (P.L. 97-320). - }
{ - (34) 'Surplus' represents the cumulative total of amounts
transferred from undivided profits, any capital contributed for
shares in excess of their par value, capital contributed other
than for shares, and reduced by amounts converted into capital
stock. - }
{ - (35) 'Time deposits' comprise all deposits, however
evidenced, which may be restricted as to time of withdrawal. - }
{ + (25) 'Paid-in capital' means the aggregate amount
received by an institution or stock savings bank from the
issuance of its stock or transferred from retained earnings.
(26) 'Person' means an individual, corporation, limited
liability company, partnership, association, joint stock company,
business trust or unincorporated organization.
(27) 'Stockholders' equity' means the aggregate of paid-in
capital and retained earnings of an institution or Oregon stock
savings bank.
(28) 'Trust business' means:
(a) Acting as a trustee of a trust, as defined in ORS 128.005;
(b) Acting as a fiduciary, as defined in ORS 125.005;
(c) Acting as a personal representative, as defined in ORS
111.005;
(d) Acting as a receiver, trustee or assignee for the benefit
of creditors; or
(e) Acting in a court-appointed position of trust or any other
position of trust. + }
Enrolled Senate Bill 125 (SB 125-B) Page 7
{ - (36) 'Trust company' means any corporation which is
authorized to engage in the business of acting as a fiduciary and
includes the trust department of a bank or savings bank, but does
not include a corporation appointed by a United States Bankruptcy
Court to serve as a bankruptcy trustee under Title 11, United
States Code, when the corporation is acting in its capacity as a
bankruptcy trustee. - }
{ - (37) 'Unimpaired capital' is capital of an institution
which has not become impaired as provided in ORS 711.305. - }
SECTION 1a. { + If House Bill 2794 becomes law, sections 1, 3
and 4, chapter ___, Oregon Laws 1997 (Enrolled House Bill 2794)
(amending ORS 707.430, 74.1040 and 706.005), are repealed. + }
SECTION 1b. { + Section 1c of this Act is added to and made a
part of the Bank Act. + }
SECTION 1c. { + (1) As used in this section:
(a) 'Bank' includes any banking institution, national bank,
extranational institution or foreign institution doing business
in this state.
(b) 'Banking day' means any day that is not an optional bank
holiday.
(c) 'Emergency' means any condition or occurrence which may
interfere with the conduct of normal business operations at one
or more of the offices of a bank, or which poses an imminent or
existing threat to the safety or security of persons or property.
(d) 'Open for the general conduct of banking business ' means
the office or offices of a bank are open to the public for
carrying on substantially all business functions of the bank.
(e) 'Optional bank holiday' means:
(A) Each Saturday and Sunday.
(B) New Year's Day on January 1.
(C) Martin Luther King, Jr.'s birthday on the third Monday in
January.
(D) Presidents Day on the third Monday in February.
(E) Memorial Day on the last Monday in May.
(F) Independence Day on July 4.
(G) Labor Day on the first Monday in September.
(H) Columbus Day on the second Monday in October.
(I) Veterans Day on November 11.
(J) Thanksgiving Day on the fourth Thursday in November.
(K) Christmas Day on December 25.
(2) When an optional bank holiday, other than a Saturday, falls
on a Saturday, the bank may observe the holiday either on that
day or on the preceding Friday. When an optional bank holiday,
other than a Sunday, falls on a Sunday, the bank may observe the
holiday either on that day or on the succeeding Monday.
(3) Except as otherwise provided in this section, banks shall
be open for the general conduct of banking business on each
banking day.
(4) Any bank may remain closed on any optional bank holiday
with respect to all or any of its banking and other functions.
(5) Subject to any applicable federal law or regulation, an
office of a bank may be closed for any part or all of a banking
day if the times or days which the office is open are posted on
the premises of the office.
(6) When the Director of the Department of Consumer and
Business Services determines that an emergency exists, the
director may authorize the closing of the principal office or
branch of any bank which may be affected by the emergency. The
office or branch so closed may remain closed until the director
determines that the emergency has ended and for such further time
Enrolled Senate Bill 125 (SB 125-B) Page 8
thereafter as may reasonably be required to prepare the office or
branch to reopen.
(7) When the officers of a bank determine that an emergency
exists which affects the principal office or a branch of the
bank, they may close the office or branch without the approval of
the director for a period not to exceed 48 hours, excluding
holidays, during the continuation of the emergency. A bank
closing an office or branch under this subsection shall give
prompt notice of its action to the director, or in the case of a
national bank, to the Comptroller of the Currency.
(8) The principal officers of a bank may close the principal
office or any branch of the bank on any day designated, by
proclamation of the President of the United States or the
Governor of this state, as a day of mourning, rejoicing, or other
special observance.
(9) When any obligation payable at, by or through a bank falls
due on a day on which the bank remains closed under this section,
it shall be due and payable on the next banking day on which the
bank is open. Any act authorized, required or permitted to be
performed at, by or with respect to any bank on a day on which
the bank remains closed may be performed on the next banking day
on which the bank is open, and no liability or loss of rights of
any kind shall result from the closing. + }
SECTION 2. { + Section 3 of this Act is added to and made a
part of ORS chapter 706. + }
SECTION 3. { + As used in the Bank Act, unless the context
requires otherwise:
(1) 'Bank' means a company, other than an extranational
institution, that accepts deposits insured to any extent by the
Bank Insurance Fund under the provisions of the Federal Deposit
Insurance Act, as amended, 12 U.S.C. 1811, et seq.
(2) 'Bank holding company' means any company that is a bank
holding company under the federal Bank Holding Company Act of
1956, as amended, 12 U.S.C. 1841, et seq.
(3) 'Bank service corporation' means a corporation, all of the
capital stock of which is owned by one or more banking
institutions or national banks, that is organized to perform
services authorized by section 124 of this 1997 Act.
(4) 'Banking institution' means an Oregon commercial bank, an
Oregon trust company or an Oregon savings bank.
(5) 'Company' means an entity that is a company under the
federal Bank Holding Company Act of 1956, as amended, 12
U.S.C. 1841, et seq.
(6) 'Extranational institution' means a corporation,
unincorporated company, partnership or association of two or more
persons organized under the laws of a nation other than the
United States, any territory of the United States, Puerto Rico,
Guam, American Samoa or the Virgin Islands, that engages directly
in a banking business.
(7) 'Federal bank' means a national bank or any other bank
organized under the laws of the United States.
(8) 'Federal savings bank' means a corporation chartered as a
federal savings bank under the provisions of 12 U.S.C. 1464.
(9) 'Financial institution' means insured institutions,
extranational institutions, credit unions as defined in ORS
723.006, out-of-state credit unions under ORS 723.042 and federal
credit unions.
(10) 'In-state federal stock bank' means a federal bank that
issues capital stock, the home state of which is Oregon.
Enrolled Senate Bill 125 (SB 125-B) Page 9
(11) 'Institution' means an Oregon commercial bank or an Oregon
trust company.
(12) 'Insured institution' means a company, the deposits of
which are insured under the provisions of the Federal Deposit
Insurance Act, as amended, 12 U.S.C. 1811, et seq.
(13) 'Insured nonstock institution' means an insured
institution that does not issue capital stock.
(14) 'Insured stock institution' means an insured institution
that issues capital stock.
(15) 'National bank' means a bank that was organized under the
provisions of the National Bank Act, as amended, 12 U.S.C. 21, et
seq.
(16) 'Non-Oregon institution' means:
(a) An out-of-state state bank engaging in banking business in
Oregon;
(b) An out-of-state trust company transacting trust business in
Oregon; and
(c) An extranational institution engaging in banking business
in Oregon.
(17) 'Nonstock bank' means a bank that does not issue capital
stock.
(18) 'Oregon bank' means an Oregon stock bank or Oregon
nonstock bank.
(19) 'Oregon commercial bank' means an Oregon stock bank that
was chartered under ORS chapter 707 as a bank other than a stock
savings bank.
(20) 'Oregon nonstock bank' means a state nonstock bank, the
home state of which is Oregon.
(21) 'Oregon operating institution' means:
(a) A bank that is engaging in banking business in this state;
(b) An extranational institution that is engaging in banking
business in this state; or
(c) A trust company that is transacting trust business in this
state.
(22) 'Oregon savings bank' or 'savings bank' means an Oregon
stock savings bank or an Oregon nonstock bank.
(23) 'Oregon stock bank' means a state stock bank, the home
state of which is Oregon.
(24) 'Oregon stock savings bank' means an Oregon stock bank
that was initially chartered as or was converted to a stock
savings bank under the Bank Act.
(25) 'Oregon trust company' means a trust company that was
organized under the provisions of ORS chapter 707.
(26) 'Out-of-state bank' means an out-of-state state bank or an
out-of-state federal bank.
(27) 'Out-of-state bank holding company' means a bank holding
company whose home state is not Oregon, and that is not the bank
holding company of an Oregon stock bank or an in-state federal
stock bank.
(28) 'Out-of-state federal bank' means a federal bank, the home
state of which is a state other than Oregon.
(29) 'Out-of-state state bank' means a state bank, the home
state of which is a state other than Oregon.
(30) 'Out-of-state trust company' means a trust company that
was organized under the laws of another state.
(31) 'State bank' means a bank that was organized under the
laws of a state.
(32) 'State nonstock bank' means a nonstock bank that was
organized under the laws of a state.
Enrolled Senate Bill 125 (SB 125-B) Page 10
(33) 'State stock bank' means a stock bank that was organized
under the laws of a state.
(34) 'Stock bank' means a bank that issues capital stock.
(35) 'Trust company' means any company that is authorized under
the provisions of ORS chapter 709 to transact trust business, and
includes the trust department of a bank, but does not include a
corporation appointed by a United States Bankruptcy Court to
serve as a bankruptcy trustee under Title 11, United States Code,
when the corporation is acting in its capacity as a bankruptcy
trustee. + }
SECTION 3a. ORS 706.500 is amended to read:
706.500. (1) Each banking institution is subject to the
inspection of the Director { + of the Department of Consumer and
Business Services + }. The director shall conduct an examination
of the condition and resources of each banking institution, and
determine whether the banking institution is complying with the
laws of this state and such other matters as the director may
prescribe. Except as provided in subsections { - (2) - }
{ + (3) + } and { - (4) - } { + (5) + } of this section, the
examinations shall be conducted not more than 24 months apart.
{ + (2) Subject to section 27 of this 1997 Act, the director
shall have the power at any time in the discretion of the
director to examine every branch of a non-Oregon institution
located in this state, for the same purposes and to the same
extent as provided in the case of banking institutions. + }
{ - (2) - } { + (3) + } The director may participate in any
program offered by the Federal Deposit Insurance Corporation or
the Federal Reserve Board that provides for joint or alternate
examinations of banking institutions { + and non-Oregon
institutions + } by the director and the Federal Deposit
Insurance Corporation or the Federal Reserve Board.
{ - (3) - } { + (4) + } In addition to the examinations
under subsection (1) { + , + } { - or - } (2) { + or (3) + }
of this section, the director may conduct examinations of a
banking institution at any other time.
{ - (4) - } { + (5) + } Instead of making an examination of
a banking institution { + or non-Oregon institution + } under
subsection (1) { + , + } { - or - } (2) { + or (3) + } of this
section, the director may accept an examination or report made
under the Federal Reserve Act or under other statutes of the
United States authorizing insurance of deposits.
SECTION 4. ORS 706.520 is amended to read:
706.520. When requested in writing by the board of directors of
a banking institution or stockholders owning a majority of the
capital stock of an institution { + or an Oregon stock savings
bank + }, the Director { + of the Department of Consumer and
Business Services + } may make or cause to be made an examination
into the affairs and conditions of the banking institution { +
or Oregon stock savings bank + }. For the examination { + , + }
the banking institution { + or Oregon stock savings bank + }
shall pay the fee imposed under ORS 706.544.
SECTION 5. ORS 706.530 is amended to read:
706.530. Each banking institution { - , - } and each
{ - out-of-state banking - } { + non-Oregon + } institution
{ - which has merged with or purchased the assets and assumed
the liabilities of an in-state banking institution under ORS
711.017 or 711.211, or has merged with or purchased the assets
and assumed the liabilities of a savings association or federal
association under ORS 714.133, - } shall pay each year to the
Director { + of the Department of Consumer and Business
Enrolled Senate Bill 125 (SB 125-B) Page 11
Services + } the fee determined by reference to the schedule
adopted by the director under ORS 705.620. The fee shall be paid
by the date set by the director in the rule establishing the
schedule.
SECTION 6. ORS 706.544 is amended to read:
706.544. A banking institution { + or a non-Oregon
institution + } shall pay to the Director { + of the Department
of Consumer and Business Services + } the actual costs of the
department, as determined by the director, for conducting any
special examination or taking any action under ORS 706.600.
SECTION 7. ORS 706.560 is amended to read:
706.560. (1) When a banking institution { + or a non-Oregon
institution + }has been examined by an examiner and the examiner
finds securities { - which - } { + that + } are of doubtful
value, the examiner shall report the same to the director, who
may, at the expense of the banking institution { + or non-Oregon
institution + }, investigate and appraise the securities.
(2) The director may, in the discretion of the director or
whenever requested to do so by a banking institution { + or
non-Oregon institution + }, make an audit of the affairs of the
banking institution { + or non-Oregon institution + }. The
department shall be reimbursed by the { + banking institution or
non-Oregon + } institution for all costs incurred by the
department in conducting the audit.
SECTION 8. ORS 706.570 is amended to read:
706.570. (1) If upon examination of a banking institution
{ + or non-Oregon institution + } it appears that the banking
institution { + or non-Oregon institution + } does not keep
books and accounts in such a manner as to enable the director to
readily ascertain the true condition of the banking
institution { + or non-Oregon institution + }, the Director
{ + of the Department of Consumer and Business Services + } may
require any officer of the banking institution { + or non-Oregon
institution + } to open and keep books or accounts as the
director prescribes.
(2) If a banking institution { + or non-Oregon institution + }
fails to open and keep the books and accounts prescribed by the
director, the director shall send written notice to the banking
institution { + or non-Oregon institution + } of intent to
assess and collect the penalty under this subsection. For each
day the banking institution { + or non-Oregon institution + }
fails to open and keep the books and accounts after receiving
notice from the director, the banking institution { + or
non-Oregon institution + } is subject to a penalty of
{ - $100 - } { + $1,000 + }. The penalty shall be paid by the
banking institution { + or non-Oregon institution + } when it
receives a notice and demand for the amount of the penalty from
the director. If the banking institution { + or non-Oregon
institution + } delays or refuses to pay the penalty upon demand,
the penalty shall be recovered in the name of the director in an
action brought by the Attorney General. All sums collected for
penalties imposed by this section shall be paid into the Consumer
and Business Services Fund created by ORS 705.145.
SECTION 9. ORS 706.575 is amended to read:
706.575. (1) A certificate attached to a copy of a document
filed by the Director { + of the Department of Consumer and
Business Services + }, bearing the director's signature, which
may be in facsimile, is conclusive evidence that the original
document or a facsimile thereof is on file with the office.
Enrolled Senate Bill 125 (SB 125-B) Page 12
(2) All certificates issued by the director in accordance with
the provisions of this chapter and all copies of documents filed
in the office of the director in accordance with the provisions
of this chapter, when certified by the director, shall be taken
and received in all courts, public offices and official bodies as
prima facie evidence of the facts stated in the certificates or
documents. A certificate by the director, as to the existence or
nonexistence of the facts relating to { + financial + }
institutions { - which - } { + that + } would appear from the
presence or absence of documents filed in the office of the
director or the compliance or noncompliance with provisions of
this chapter, shall be taken and received in all courts, public
offices and official bodies as prima facie evidence of the
existence or nonexistence of the facts stated in the certificates
or documents.
SECTION 10. ORS 706.580 is amended to read:
706.580. When it appears to the Director { + of the Department
of Consumer and Business Services + } that a banking institution
{ + or non-Oregon institution + } is violating any law or
{ + duly issued order of the director, + } is conducting its
business in an unsafe or unauthorized manner { + , or has refused
to submit its records for inspection by an examiner or
examination by the department: + } { - , - }
{ + (1) + } The director { - shall, - } { + may: + }
{ + (a) Notify the appropriate bank supervisory agency, with
respect to such banking institution or non-Oregon institution, of
the director's determination and the facts and circumstances on
which such determination is based;
(b) Provide the banking institution or non-Oregon institution
with a statement of the charges on the basis of which the
determination was made that the banking institution or non-Oregon
institution is violating the law or conducting its business in an
unsafe or unauthorized manner;
(c) Notify the banking institution or non-Oregon institution of
the date and place of a hearing before the director, or any
person designated by the director, with respect to the charges
against the banking institution or non-Oregon institution; and
(d) Conduct a hearing pursuant to the notice given to the
banking institution or non-Oregon institution under subsection
(1)(c) of this section, and make findings with respect to each of
the charges specified in the notice to the banking institution or
non-Oregon institution.
(2) The director may:
(a) + } By an order in writing { + : + } { - , - }
{ + (A) + } Direct the discontinuance of the illegal, unsafe
or unauthorized practices { + ; and + } { - . - }
{ + (B) Direct the banking institution or non-Oregon
institution to take affirmative action to correct or remedy any
conditions resulting from the illegal, unsafe or unauthorized
practice;
(b) Apply for and obtain an injunction or other appropriate
order from a court having jurisdiction over the matter, enforcing
the director's order issued under subsection (2)(a) of this
section;
(c) Publish notice of any order issued by the director pursuant
to subsection (2)(a) of this section; and
(d) Suspend or revoke the authority of a non-Oregon institution
to open, occupy or maintain a branch or branches in this
state. + }
SECTION 11. ORS 706.600 is amended to read:
Enrolled Senate Bill 125 (SB 125-B) Page 13
706.600. (1) The Director { + of the Department of Consumer
and Business Services + } may take one or more of the actions
described in this section to protect the interest of the
creditors and depositors of a banking institution { + or
non-Oregon institution + } if any of the following occurs:
(a) It is unsafe or inexpedient for the banking institution
{ + or non-Oregon institution + } to continue to transact
business.
(b) Extraordinary withdrawals of money are jeopardizing the
interests of remaining depositors.
(c) A director or officer has abused that person's trust or has
been guilty of misconduct in an official position injurious to
the banking institution { + or non-Oregon institution + }.
(d) The banking institution { + or non-Oregon institution + }
has suffered a serious loss by fire, floods, burglary, disaster
or otherwise.
(e) The banking institution { + or non-Oregon institution + }
neglects or refuses to observe an order of the director under ORS
706.580 or refuses to submit to the inspection of an examiner.
(f) A director or officer refuses to be examined under oath
regarding the affairs of the banking institution { + or
non-Oregon institution + }.
(2) For purposes of subsection (1) of this section and subject
to subsection { - (4) - } { + (5) + } of this section, the
director may take any of the following actions in regard to a
banking institution:
(a) Take immediate possession and control of the property and
affairs of the banking institution.
(b) If the director has issued an order under ORS 706.580,
enter the banking institution to monitor and enforce
implementation of the order.
(c) Direct the sale of all or part of the banking institution's
assets, or portions thereof, and the assumption of all or part of
its liabilities.
(d) Direct the conversion, reorganization or consolidation of
the banking institution, either with or without a merger.
(e) Direct the merger of the banking institution.
(f) Direct the sale of a banking institution.
(g) Direct the banking institution to develop and endeavor to
implement an acquisition plan, under which the banking
institution will acquire or be acquired by a national bank or
banking institution, or a state or federal savings association.
(h) Take any other action that the director determines is
necessary and expedient to facilitate the sale of the stock or
assets of the banking institution, or the sale, conversion,
reorganization, consolidation or merger of the banking
institution.
{ + (3) For purposes of subsection (1) of this section, and
subject to section 27 of this 1997 Act, the director may take any
one of the following actions in regard to a non-Oregon
institution:
(a) Take immediate possession and control of the property in
this state of the non-Oregon institution.
(b) If the director has issued an order under ORS 706.580,
enter the branches, offices or other places of business in this
state of the non-Oregon institution to monitor and enforce
implementation of the order.
(c) Acting alone or in concert with another appropriate bank
supervisory agency, take any action authorized or permitted to be
Enrolled Senate Bill 125 (SB 125-B) Page 14
taken under or pursuant to any agreement or contract between the
director and one or more bank supervisory agencies. + }
{ - (3) - } { + (4) + } Notwithstanding any other provision
of law and pursuant to ORS 706.544, any actual costs incurred by
the department under this section shall be paid by the banking
institution { + or non-Oregon institution + } to the director
for deposit in the Consumer and Business Services Fund. The
moneys deposited in the Consumer and Business Services Fund under
this subsection shall not be considered as a budget item on which
a limitation is otherwise fixed by law, but shall be in addition
to any specific biennial appropriations or amounts authorized to
be expended from the Consumer and Business Services Fund for any
biennial period.
{ - (4) - } { + (5) + } Subsection (2)(c) to (h) of this
section are available to the director only when a banking
institution is in immediate danger of insolvency.
SECTION 12. ORS 706.610 is amended to read:
706.610. An examiner of the Department of Consumer and Business
Services, having knowledge of the insolvency or unsafe condition
of { - a banking - } { + an Oregon operating + } institution
shall report the fact in writing, over the examiner's signature,
to the director.
SECTION 13. ORS 706.630 is amended to read:
706.630. (1) The Director { + of the Department of Consumer
and Business Services + } shall call for the report of condition
of
{ - banking - } { + Oregon operating + } institutions { - ,
foreign institutions and branches of foreign and extranational
institutions - } at the close of business on the same day on
which a report is required from national { - banking
associations - } { + banks + } by the federal regulatory
agencies.
(2) The report of each { - banking and foreign - }
{ + Oregon operating + } institution { - and each branch of a
foreign and extranational institution - } required in subsection
(1) of this section shall:
(a) Show its assets and liabilities combined for all
departments at the close of business on the day specified.
(b) Be sworn to by an officer of the { - banking - }
{ + Oregon operating + } institution making the report and
attested by not less than two directors of the { - banking - }
{ + Oregon operating + } institution.
(c) Exhibit in detail, and under appropriate heads, the total
liabilities and resources of the { - banking - } { + Oregon
operating + } institution at the close of business on the day
specified.
(d) Be transmitted to the director within the time allowed by
federal regulations for submission of reports of national bank
associations to the federal regulatory agencies.
(3) The director may require additional reports of condition at
any time the director considers it necessary. The additional
reports shall meet the requirements of subsection (2) of this
section.
(4) Trust companies not conducting a banking business are not
required to submit the reports required in subsection (1) of this
section, but shall submit reports as may be required by the
director.
SECTION 14. ORS 706.650 is amended to read:
706.650. If { - a banking - } { + an Oregon operating + }
institution delays or fails to furnish reports in the manner
Enrolled Senate Bill 125 (SB 125-B) Page 15
required under ORS 706.630, the { - banking - } { + Oregon
operating + } institution is subject to a penalty of
{ - $25 - } { + $250 + } a day for each day while in default.
The penalty shall be paid by the { - banking - } { + Oregon
operating + } institution upon receiving notice or demand for the
amount of the penalty from the Director { + of the Department of
Consumer and Business Services + }. If the penalty is not paid
upon demand by the director, the director shall proceed to
collect the penalty in the manner prescribed by ORS 706.570 (2).
If the director determines that the default was unavoidable, the
director may waive the penalty.
SECTION 15. ORS 706.660 is amended to read:
706.660. (1) Each banking institution, { - foreign - }
{ + non-Oregon + } institution { - , extranational
institution - } and each branch { + in this state + } of every
{ - foreign and - } extranational institution shall submit to
the Director { + of the Department of Consumer and Business
Services + } a report of earnings and dividends when called for
by the director. The director shall call for a report of earnings
and dividends on the same day on which an earnings and dividends
report is required from national { - banking associations - }
{ + banks + } by the federal regulatory agencies. The report
shall be for a period designated by the director in the call.
(2) The report shall be in the form prescribed by the director
and shall show all losses sustained, expenses and taxes paid,
gross earnings and profits, losses recovered since the last
report, payments made by stockholders and all amounts carried to
surplus, undivided profits or dividends paid.
(3) The director may require additional reports of earnings and
dividends at any time the director considers it necessary. The
additional reports shall meet the requirements of subsection (2)
of this section.
SECTION 16. ORS 706.680 is amended to read:
706.680. A banking institution, { - foreign - }
{ + non-Oregon + } institution { - , extranational
institution - } and any branch { + in this state + } of { - a
foreign or - } { + an + } extranational institution
{ - which - } { + that + } fails to make and submit any report
required by ORS 706.660 { - or 706.670 - } is subject to a
penalty of { - $25 - } { + $250 + } for each day the reports
are delayed beyond the time allowed by ORS 706.660 { - or
706.670 - } . The penalty shall be collected in the manner
provided in ORS 706.570. { + If the Director of the Department
of Consumer and Business Services determines that the default was
unavoidable, the director may waive the penalty. + }
SECTION 17. ORS 706.690 is amended to read:
706.690. (1) If the Director { + of the Department of Consumer
and Business Services + } determines that the condition of an
institution { + or Oregon stock savings bank + } is such that
any transfer of the capital stock of the institution { + or
Oregon stock savings bank + } would jeopardize the interest of
its depositors, the director shall notify the institution { + or
Oregon stock savings bank + } in writing that when any shares of
the capital stock of the institution { + or Oregon stock savings
bank + } are to be transferred on the books or records of the
institution { + or Oregon stock savings bank + }, the officer
proposing to make the transfer shall report in writing to the
director the proposed transfer of stock. A transfer of stock
shall not be made, after the date such a notice is issued, unless
the transfer agent first obtains the written consent of the
Enrolled Senate Bill 125 (SB 125-B) Page 16
director. The director shall notify the institution { + or
Oregon stock savings bank + } of the director's decision within
30 days after receiving the report.
(2) If a director or officer of an institution { + or Oregon
stock savings bank + }, a transfer agent, vendee or vendor has
reason to believe that a transfer of stock creates or changes a
controlling interest in an institution { + or Oregon stock
savings bank + }, that person shall immediately notify the
director of the transfer. A transfer that creates a controlling
interest in, or changes the control of, an institution { + or
Oregon stock savings bank + } shall not be entered upon the books
of the institution { + or Oregon stock savings bank + } or
become effective until:
(a) Notice has been received at the office of the director; and
(b) The sale, exchange or other disposition has been approved
in writing by the director.
(3) For purposes of this section, a controlling interest of an
institution { + or Oregon stock savings bank + } exists if a
person, directly or indirectly, acting through one or more other
persons, owns or has power to vote 25 percent or more of any
class of voting stock of an institution { + or Oregon stock
savings bank + } or of a corporation that is or becomes a bank
holding company as defined in { - ORS 715.010 - } { + section
3 of this 1997 Act + } unless:
(a) The stock of the institution { + or Oregon stock savings
bank + } is held in a fiduciary capacity and not for the benefit
of the person or of the { - shareholders - } { +
stockholders + }, employees or members of the person; or
(b) The stock is acquired, not as a means of circumventing ORS
chapter 715, but by the person in the ordinary course of business
to secure or collect a debt previously contracted in good faith
and the person disposes of the stock within two years after the
acquisition of the stock. The director may extend the period if
an extension will not be detrimental to the public interest or in
contravention of any other law.
(4) The director shall approve or disapprove the transfer in
accordance with the standards provided by ORS 707.080 (1). The
director also may disapprove a transfer under subsection (2) of
this section if any of the reasons stated by ORS 707.145 apply to
the proposed new owner of the shares.
{ + (5) Notwithstanding subsections (2) to (4) of this
section, if the person acquiring a controlling interest in an
institution or Oregon stock savings bank is or will through such
acquisition become a bank holding company, the provisions of ORS
chapter 715 apply to the change in controlling interest in lieu
of the provisions of subsections (2) to (4) of this section. + }
SECTION 18. ORS 706.720 is amended to read:
706.720. (1) The Director { + of the Department of Consumer
and Business Services + } shall receive and file in the
department all reports required by the Bank Act.
(2) Except as provided in subsection (3) of this section and
ORS 706.730, the records of the Department of Consumer and
Business Services pertaining to the administration of the Bank
Act are available for public inspection unless the director
determines in the particular instance that the public interest in
disclosure of the records is outweighed by the interests of
{ - a banking - } { + an Oregon operating + } institution or
its directors, stockholders, officers, employees and customers in
keeping the records confidential, or that the records are exempt
from disclosure under ORS 192.501 to 192.505. A determination by
Enrolled Senate Bill 125 (SB 125-B) Page 17
the director under this subsection is subject to review under ORS
192.410 to 192.505.
(3) Except as provided in subsections (4) and (5) of this
section, the following records of the department are exempt from
disclosure or production:
(a) Examination reports and work papers, directives, orders and
correspondence that relate to examination reports.
(b) Investigatory information concerning persons subject to
investigation by the director under ORS 707.070, 707.080,
707.110, 707.140, 707.145, 707.155 { - , - } { + or + }
707.705 { - or 716.085 - } and financial statements of such
persons.
(c) Proprietary information.
(d) Reviews of financial statements submitted to the director.
(e) Reports filed under ORS 706.655.
(f) Stockholder lists.
(4) Notwithstanding subsection (3) of this section, the
director may disclose any record of the department specified in
this subsection pertaining to an { + Oregon operating + }
institution that has been liquidated under ORS 711.400 to 711.615
if the director determines in the particular instance that the
public interest in disclosure of the record outweighs the
interests of the { - banking - } { + Oregon operating + }
institution or its directors, stockholders, officers, employees
or customers in keeping the record confidential. Under no
circumstances, however, shall the director disclose any such
record or portion thereof that contains any proprietary
information or any information relating to the individual
financial activities or affairs of persons unless the director
concludes that those activities or affairs were a direct and
substantial contributing factor in the failure of the { + Oregon
operating + } institution. This subsection applies to the
following records of the department:
(a) Examination reports and work papers, directives, orders and
correspondence relating to examination reports;
(b) Investigatory information concerning persons subject to
investigation by the director under ORS 707.070, 707.080,
707.110, 707.140, 707.145, 707.155 { - , - } { + or + }
707.705 { - or 716.085 - } ;
(c) Reviews of financial statements; and
(d) Reports filed under ORS 706.655.
(5) Notwithstanding ORS 40.270, an officer of the department
may be examined concerning records that are exempt from
disclosure under subsection (2) or (3) of this section and ORS
706.730 and the records are subject to production if the court
before which a civil or criminal action is pending finds that
such examination and production is essential for establishing a
claim or defense. In making a finding under this subsection, if
the court views the records, the court shall do so in camera.
(6) A civil penalty imposed by the director under the Bank Act
shall become subject to public inspection after the 20th day
after the director imposes the civil penalty.
(7) All records of the department pertaining to the condition
of { - banking - } { + Oregon operating + } institutions may
be furnished to:
(a) The Federal Reserve Bank and its examiners.
(b) The Comptroller of the Currency of the United States and
national bank examiners.
(c) The Federal Deposit Insurance Corporation and its
examiners.
Enrolled Senate Bill 125 (SB 125-B) Page 18
(d) The State Treasurer if the { - banking - } { + Oregon
operating + } institution is a depository of public fund
deposits.
{ + (e) Any supervisory authority that regulates financial
institutions or bank holding companies. + }
{ - (e) The following, if a merger, purchase or consolidation
is prospective or imminent of institutions supervised by the
director, or if the following supervise an institution that owns
or controls an institution under the supervision of the
director: - }
{ - (A) The Federal Home Loan Bank. - }
{ - (B) Regulators of out-of-state institutions or foreign
bank holding companies or subsidiaries of foreign bank holding
companies. - }
(f) The respective { - banking - } { + Oregon operating + }
institution, or the { - out-of-state institution, foreign bank
holding company or subsidiary of a foreign - } bank holding
company that controls { - a banking - } { + an Oregon
operating + } institution.
{ - (g) A holding company of a bank. - }
(8) The director shall prescribe and furnish to interested
persons the forms for all reports required by the Bank Act.
(9) If the director is requested to disclose any record subject
to this section and the record contains both material that is
exempt from disclosure under this section or any other provision
of law and material that is not exempt from disclosure, the
director shall separate the exempt and nonexempt material and
shall disclose only the nonexempt material.
SECTION 19. ORS 706.725 is amended to read:
706.725. An officer, director, stockholder or employee of any
{ - banking - } { + Oregon operating + } institution shall
not:
(1) Knowingly subscribe to or make or cause to be made any
false statement or report to the Director { + of the Department
of Consumer and Business Services + } or any false entry in the
books or accounts of the { - banking - } { + Oregon
operating + } institution.
(2) Knowingly subscribe to or exhibit false papers with the
intent to deceive any person authorized to examine into the
affairs of the { - banking - } { + Oregon operating + }
institution.
(3) Knowingly state or publish any false report or statement of
the { - banking - } { + Oregon operating + } institution or
prepare any false minutes, with intent to deceive the directors
of the { - banking - } { + Oregon operating + } institution
or any person authorized to examine the affairs of the
{ - banking - } { + Oregon operating + } institution.
(4) Make improper or fail to make proper entry upon the books
or records or in any statement or report of the { - banking - }
{ + Oregon operating + } institution with intent to deceive or
conceal the true condition of the { - banking - } { + Oregon
operating + } institution.
SECTION 20. ORS 706.730 is amended to read:
706.730. (1) The Director { + of the Department of Consumer
and Business Services + } or any other person employed by the
Department of Consumer and Business Services shall not knowingly
disclose the name of a person who is a depositor or debtor of a
{ - banking institution - } { + bank + }, or the amount of the
person's deposit or debt, except { - as follows: - }
{ + that + }
Enrolled Senate Bill 125 (SB 125-B) Page 19
{ - (a) - } the director or the employee may disclose such
information as may be required under ORS 706.720 (5) or as may be
necessary in the performance of the director's or employee's
official duty including any duty under ORS 295.018.
{ - (b) The director may maintain a record of borrowers from
banking institutions and may give information concerning the
total liabilities of a borrower to a banking institution owning
obligations of the borrower. - }
(2) Subsection (1) of this section does not prohibit disclosure
of the name of any debtor or the amount of the person's debt
included in reports that are filed under ORS 706.655, if the
reports were filed by a banking institution that has been
liquidated or is in the process of being liquidated under ORS
711.400 to 711.615 and if disclosure is otherwise allowed under
ORS 706.720.
SECTION 21. ORS 706.780 is amended to read:
706.780. If the Director { + of the Department of Consumer and
Business Services + } has reason to believe that a person has
violated any provision of the Bank Act for which criminal
prosecution is provided, the director shall give the information
relative to the violation to the appropriate federal, state or
local law enforcement officer having jurisdiction of the
violation. However, this section does not apply when a director
or officer of an { + Oregon operating + } institution has
reported the information to the appropriate law enforcement
agency under ORS 707.735.
SECTION 22. ORS 706.790 is amended to read:
706.790. (1) In accordance with ORS 183.310 to 183.550, the
Director { + of the Department of Consumer and Business
Services + } may adopt rules for the purpose of carrying out the
Bank Act.
(2) In addition to the notice requirements of ORS 183.310 to
183.550, before the director adopts a rule, the director shall
submit a copy of the rule to each { - banking - } { + Oregon
operating + } institution.
SECTION 23. ORS 706.795 is amended to read:
706.795. Notwithstanding any other provision of law, the
Director { + of the Department of Consumer and Business
Services + } may, in accordance with ORS 183.310, 183.315,
183.330, 183.335 and 183.341 to 183.410, make rules authorizing
{ - a - } banking
{ - institution - } { + institutions + } to exercise any of
the powers conferred upon { - a federally chartered bank, trust
company, credit union, savings and loan association or savings
association or institution doing - } { + any financial
institution that is accepting deposits or transacting trust + }
business in this state { - that is subject to the regulations
of the Comptroller of the Currency, the Federal Reserve Board,
the Federal Home Loan Bank Board, the Federal Deposit Insurance
Corporation, the National Credit Union Administration or the
successor or successors of them - } , if the director finds that
the exercise of the power:
(1) Serves the public convenience and advantage; and
(2) Equalizes and maintains the quality of competition between
{ - state chartered - } banking institutions and
{ - federally chartered banking - } { + other financial + }
institutions.
SECTION 24. ORS 706.815 is amended to read:
706.815. Notwithstanding ORS 705.145 (2), moneys received or
expended by the Director { + of the Department of Consumer and
Enrolled Senate Bill 125 (SB 125-B) Page 20
Business Services + } under this chapter relating to the
supervision of { - banking - } { + Oregon operating + }
institutions may be deposited in or withdrawn from a single
account. The director need not establish a separate account in
the Consumer and Business Services Fund relating to the
supervision of banks { - , savings banks and stock savings
banks - } and a separate account relating to the supervision of
trust companies.
SECTION 25. ORS 706.980 is amended to read:
706.980. (1) Any person who violates any provision of the Bank
Act, or any lawful rule or final order of the Director { + of
the Department of Consumer and Business Services + } for which a
civil penalty is not expressly provided, shall forfeit a civil
penalty in an amount determined by the director of not more than
$2,000 for each offense, or $10,000 in the aggregate for all such
offenses within any three-month period. In the case of
individuals, the civil penalty shall be not more than $1,000 for
each offense or $5,000 in the aggregate for all such offenses
within any three-month period. Each violation is a separate
offense.
(2) Any person who violates ORS 706.610 and 706.725 shall
forfeit a civil penalty in an amount determined by the director
of not more than $5,000. In addition, a person violating ORS
706.610 shall forfeit the person's office.
(3) Any person who violates ORS 706.730 shall forfeit a civil
penalty, in an amount determined by the director, of not more
than $1,000. In addition, the violator shall forfeit the
violator's office.
(4) All money forfeited under subsections (1), (2) and (3) of
this section shall be paid to the State Treasurer to be deposited
in the Consumer and Business Services Fund.
(5) In addition to any other civil penalty, any person who
violates any provision of the Bank Act or any lawful rule or
final order of the director may be required to forfeit and pay to
the State Treasurer to be deposited in the Consumer and Business
Services Fund a civil penalty in an amount determined by the
director but not to exceed the amount by which the person
profited in any transaction which violates any such provision,
rule or order.
(6) The civil penalty may be recovered in an action brought
thereon in the name of the State of Oregon in any court of
appropriate jurisdiction or may be imposed as provided in ORS
183.090.
(7) In any court action with respect to a civil penalty,
including judicial review under ORS 183.090, the court may review
the penalty as to both liability and reasonableness of amount.
(8) If a civil penalty is assessed against a director, officer
or employee of a banking institution { + or non-Oregon
institution + }, unless the director provides otherwise, the
director, officer or employee shall forfeit the penalty and the
penalty shall not be paid either directly or indirectly by the
banking institution { + or non-Oregon institution + }.
(9) The provisions of this section are in addition to and not
in lieu of any other enforcement provisions contained in the Bank
Act.
{ + (10) If a civil penalty is assessed against a director,
officer or employee of a non-Oregon institution, the director
shall give notice of the assessment to the bank supervisory
agency having primary responsibility for the supervision of the
Enrolled Senate Bill 125 (SB 125-B) Page 21
non-Oregon institution in the state or country in which it is
chartered or otherwise organized. + }
SECTION 26. { + Sections 27 and 28 of this Act are added to
and made a part of ORS chapter 706. + }
SECTION 27. { + (1) The Director of the Department of Consumer
and Business Services may enter into cooperative, coordinating
and information sharing agreements with any other bank
supervisory agencies or any organization affiliated with or
representing one or more bank supervisory agencies with respect
to the periodic examination or other supervision of any branch or
other office or place of business in this state of any non-Oregon
institution, or any branch of a banking institution located in
any other state. The director may accept such supervisory
agencies' reports of examination and reports of investigation in
lieu of conducting the director's own examinations or
investigations. The agreement may resolve conflicts of laws and
specify the manner in which examination, supervision and
application processes shall be coordinated between this state and
the home state of the non-Oregon institution.
(2) The director may enter into contracts with any bank
supervisory agency that has concurrent jurisdiction over a
banking institution or non-Oregon institution operating a branch
or other office or place of business in this state, to engage the
services of such agency's examiners at a reasonable rate of
compensation, or to provide the services of the director's
examiners to such agency at a reasonable rate of compensation.
Any such contract shall be deemed exempt from competitive bidding
requirements under the provisions of ORS chapter 279. The
contract may resolve conflicts of laws and specify the manner in
which examination, supervision and application processes shall be
coordinated between this state and the home state of the
non-Oregon institution.
(3) The director may enter into joint examinations or joint
enforcement actions with other bank supervisory agencies having
concurrent jurisdiction over any branch or other office or place
of business in this state of a non-Oregon institution, or any
branch of a banking institution located in any other state,
provided that the director may at any time take such actions
independently if the director deems such actions to be necessary
or appropriate to carry out the director's responsibilities or to
ensure compliance with the laws of this state, but provided
further, that in the case of a non-Oregon institution, the
director shall recognize:
(a) The exclusive authority of the banking supervisory agency
of the home state or country of the non-Oregon institution over
corporate governance matters; and
(b) The primary responsibility of the banking supervisory
agency of the home state or country of the non-Oregon institution
over safety and soundness matters.
(4) Any fees collected by the director from non-Oregon
institutions under the provisions of the Bank Act may be shared
with other bank supervisory agencies or any organization
affiliated with or representing one or more bank supervisory
agencies in accordance with agreements between such parties and
the director. + }
SECTION 28. { + Bank Act references to federal statutes and
regulations. References in the Bank Act to federal statutes and
regulations shall, except as otherwise provided in the Bank Act,
be construed to refer to the statutes or regulations as they are
in effect on the effective date of this 1997 Act. The Director of
Enrolled Senate Bill 125 (SB 125-B) Page 22
the Department of Consumer and Business Services may adopt rules
providing that one or more of the federal statutes and
regulations shall be construed to refer to the statutes and
regulations as they are in effect on a later date. + }
{ +
AMENDMENTS TO ORS CHAPTER 707 + }
SECTION 29. ORS 707.005 is amended to read:
707.005. It is unlawful for any person to engage in or transact
a banking or trust business within this state except by means of
{ - a corporation - } { + an entity + } duly organized for the
purpose.
SECTION 30. ORS 707.010 is amended to read:
707.010. A person who has not received a certificate to do a
banking { - or trust - } business from the Director { + of
the Department of Consumer and Business Services + }, except a
national bank, shall not:
(1) Advertise that it is receiving or accepting money { - and
issuing notes or certificates of deposit therefor - } { + on
deposit + }.
(2) Use a sign at its place of business containing words
indicating that the place is a place of business:
(a) Of { - an - } { + a banking + } institution;
(b) Where deposits are received or payments made on check; or
(c) Where any other form of banking business is transacted.
(3) Make use of or circulate any letterheads, blank notes,
blank receipts, certificates, circulars or any written or printed
paper containing words indicating that the business is the
business of { - an - } { + a banking + } institution.
(4) Transact business under any name { - which - } { + that
the director determines + } leads the public to believe that its
business is that of { - an - } { + a banking + }
institution { + or that it is affiliated with a banking
institution + }.
(5) Solicit or receive deposits or transact business in the
manner of { - an - } { + a banking + } institution or in such
a manner as to lead the public to believe that its business is
that of { - an - } { + a banking + } institution.
SECTION 31. ORS 707.020 is amended to read:
707.020. (1) The Director { + of the Department of Consumer
and Business Services + } may examine the accounts, books and
papers of every person the director has reasonable cause to
believe is violating any provision of ORS { + 707.005 or + }
707.010.
(2) When the director believes, from evidence satisfactory to
the director, that any person is violating the provisions of ORS
{ + 707.005 or + } 707.010, the director may cause a complaint
to be filed in the circuit court of the county in which the
person conducts business to enjoin and restrain the person from
continuing the violation. The court shall have jurisdiction of
the proceeding and may make and enter an order or judgment
awarding such preliminary or final injunctive relief as in its
judgment is proper.
SECTION 32. ORS 707.025 is amended to read:
707.025. (1) { - An - } { + 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 { - state banks or national banks - }
{ + financial institutions + } pursuant to ORS chapter 711
Enrolled Senate Bill 125 (SB 125-B) Page 23
{ - , and not with - } { + 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 { - to 707.150 - } , 707.170, 707.200 and 707.210 (1)
and such other sections as may specifically be inconsistent with
this section, { - an - } { + a banking + } institution
described in subsection (1) of this section shall be organized as
follows:
(a) The incorporator shall { - file - } { + 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 verified and filed in the office of the director - }
{ + 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 { - the organization fee required under ORS
707.130 plus - } an
{ - additional - } 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)
{ - , (c) and (h) - } { + and (g) and (3) + }.
(C) The term of its existence, which may be perpetual.
(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 { - an - } { + 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) If the director finds the articles conform to
subsection (3) of this section, the director shall file the
articles and issue a certificate of incorporation in accordance
with ORS 707.120. - }
{ + (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
Enrolled Senate Bill 125 (SB 125-B) Page 24
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) An institution in the process of organization solely
for the purposes set forth in subsection (1) of this section at
the time this section becomes law may choose to comply with this
section rather than the other sections in this chapter, if a
charter has not been issued. If such election is made, any fees
paid under ORS 707.070 and 707.130 shall be applied against the
organization fees required under this section. - }
{ - (8) - } { + (7) + } { - An - } { + 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, { - reduce its
capital stock and guaranty and surplus funds below those required
under - } { + have initial paid-in capital in an amount less
than that required by + } ORS 707.050 { - and 707.200 - }
prior to consummation of a proposed merger { - and, in applying
ORS 707.350 to such institution, the requirements of ORS 707.050
shall be disregarded - } .
SECTION 33. ORS 707.050 is amended to read:
707.050. { + (1) + } Every institution { - organized after
January 1, 1974, - } { + or Oregon stock savings bank + } shall
have { - a paid-up capital stock - } { + at the time of
issuance of its charter, initial paid-in capital of + } not less
than $1,500,000. The Director of the Department of Consumer and
Business Services may require { - less paid-up capital
stock - } { + a lesser or greater amount of initial paid-in
capital + }for a particular institution { + or Oregon stock
savings bank + } if the director determines that the lesser { +
or greater + } amount is sufficient { + or is necessary + } for
safe and sound operation of the institution { + or Oregon stock
savings bank + }.
{ + (2) + } The { - capital stock - } { + initial paid-in
capital of an institution or Oregon stock savings bank + } must
be paid { - up - } either in cash or by exchange of real
property and improvements thereon. The real property and
improvements must be approved by the director as meeting all
applicable requirements of law and all other conditions and
standards that the director adopts by rule, including but not
limited to a proper appraisal by a qualified appraiser.
{ + NOTE: + } Sections 34 and 35 were deleted. Subsequent
sections were not renumbered.
SECTION 36. ORS 707.070 is amended to read:
707.070. Any number of persons, not less than five,
{ - citizens of the United States and residents of this
state, - } desiring to organize { - an - } { + a banking + }
Enrolled Senate Bill 125 (SB 125-B) Page 25
institution shall, as prospective incorporators, first
{ - file - } { + submit + } an application { - with - }
{ + to + } the Director { + of the Department of Consumer and
Business Services + } for a permit to organize { - an - }
{ + a banking + } institution { - or to circulate a stock
subscription list for the organization of an institution - } .
The applicants shall pay to the director at the time of their
application a fee of $2,500, no part of which shall be refunded.
The application shall be { - in duplicate on forms provided by
the director and certified by one of the applicants. The
application - } { + signed by one of the applicants and + }
shall include { + the following + } information { - with
regard to - } :
(1) The proposed location { + of the initial principal place
of business + }.
(2) The { - amount of the capital stock and the - } class or
classes of { - capital - } stock proposed to be issued { + ,
the proposed offering price per share and the aggregate dollar
amount of the proposed initial paid-in capital + }.
(3) The corporate name.
{ + (4) The names of the proposed senior officers and the
initial directors, at least three of whom shall also be among the
incorporators.
(5) The residence addresses and occupations of the proposed
incorporators and directors.
(6) The proposed articles of incorporation meeting the
requirements of ORS 707.110. + }
{ - (4) - } { + (7) + } The { + number of shares of voting
stock proposed to be subscribed for by the incorporators and each
of the proposed directors and senior officers, and the + } names
of { - the - } { + any other + } persons who { - in the
aggregate propose - } { + are expected + } to subscribe for, to
own or to control more than { - 25 - } { + 10 + } percent of
the
{ - capital - } { + voting + } stock and the amount of stock
for which each proposes to subscribe.
{ - (5) The names of the proposed active managers and
directors. - }
{ - (6) - } { + (8) + } Evidence { + satisfactory to the
director + } of the character, financial responsibility and
ability of the incorporators, directors and { - manager - }
{ + senior officers + }.
{ - (7) - } { + (9) + } Evidence { - of the need and
advisability of granting the authority - } { + satisfactory to
the director, in the form of a business plan and such additional
information as the director may require, demonstrating that the
proposed banking institution is likely to be financially
successful + }.
{ + (10) The proposed operating policies of the banking
institution.
(11) A statement as to whether the banking institution is to be
a trust company, an Oregon commercial bank or an Oregon stock
savings bank, and, if the proposed Oregon commercial bank or
Oregon stock savings bank is applying for trust powers, a
statement to that effect. + }
{ - (8) - } { + (12) + } Any other information
{ - which - } { + that + } the director may require.
SECTION 37. ORS 707.075 is amended to read:
707.075. (1) The corporate name of { - an - } { + a
banking + } institution:
Enrolled Senate Bill 125 (SB 125-B) Page 26
(a) Shall not contain any word or phrase that indicates or
implies that it is organized for any purpose other than one or
more of the purposes contained in its articles of incorporation.
(b) Shall { - not be the same as, or deceptively similar
to, - } { + be distinguishable from + } any other
{ + financial institution, + } corporate, { + professional
corporate, nonprofit corporate, cooperative, limited liability
company, + } limited partnership, { + business trust, + }
reserved or registered name currently on file with the Secretary
of State or Director of the Department of Consumer and Business
Services, { + or + } an assumed business name registered as
provided in ORS 648.010
{ - or a trademark, trade name or service mark registered as
provided in ORS chapter 647 - } .
{ + (2) The director may refuse to permit the use of any name
if the director determines that the name is deceptively similar
to the name of a financial institution already lawfully
transacting banking business or accepting deposits in this
state. + }
{ - (2) - } { + (3) + } Nothing contained in this section
shall preclude
{ - an - } { + a banking + } institution from transacting
business under { - an - } { + one or more + } assumed business
{ - name - } { + names, if the names meet the requirements of
subsection (1) of this section, unless the director determines
that the names will be confusingly similar to any financial
institution, corporate, professional corporate, nonprofit
corporate, cooperative, limited liability company, limited
partnership, business trust, reserved or registered name
currently on file with the Secretary of State or Director of the
Department of Consumer and Business Services, or an assumed
business name registered as provided in ORS 648.010 + }.
SECTION 38. { + Section 39 of this Act is added to and made a
part of ORS chapter 707. + }
SECTION 39. { + A trust company that desires to also conduct a
banking business may convert to an Oregon bank in accordance with
the provisions of sections 266 and 268 of this Act. + }
SECTION 40. ORS 707.080 is amended to read:
707.080. (1) When { - the application mentioned in ORS
707.070 - } { + an application to organize + } has been
{ - filed - } { + submitted + }, the Director of the
Department of Consumer and Business Services shall determine
whether:
(a) The { + purposes of the + } proposed { + banking + }
institution { - is being formed for legitimate objects as
contemplated by - } { + as stated in the proposed banking
institution's articles of incorporation and the application are
consistent with + } the Bank Act;
(b) The character, financial responsibility and general fitness
of the persons named in the application are such as to command
the confidence of the community in which the proposed { +
banking + } institution is to be located and to warrant the
belief that the business of the proposed corporation will be
honestly and efficiently conducted;
(c) The proposed directors and officers are competent to manage
successfully { - an - } { + a banking + } institution;
(d) The suggested capitalization is adequate for the proposed
{ + banking + } institution's anticipated development and
growth within a reasonable period of time; { + and + }
Enrolled Senate Bill 125 (SB 125-B) Page 27
(e) There is reasonable assurance of sufficient volume of
business { + for the proposed banking institution to be
economically viable. + } { - ; - }
{ - (f) The organization of the proposed institution is
justified; and - }
{ - (g) The public convenience and advantage will be promoted
by the opening of the proposed institution. - }
(2) If the director { - of the Department of Consumer and
Business Services - } is satisfied that the applicant meets the
standards prescribed in subsection (1) of this section the
director shall note the approval and the date on each copy of the
application. If the director is not satisfied or believes that
the public interest will be endangered the director shall note
the disapproval of the director and the date on each copy of the
application.
(3) { - One of the duplicate original applications shall be
filed - } { + The director shall acknowledge receipt of an
application and shall notify the applicants of approval or
disapproval of the application. The director shall file the
original of an approved application + } in the office of the
director { - and the other returned by mail to the
applicants - } .
(4) The director shall act to approve or disapprove an
application within 60 days from { - the filing - }
{ + receipt + } of the application, unless a majority of the
applicants and the director agree to extend the time an
additional 30 days.
(5) The director may grant conditional approval of any
application and require the applicants to make additional showing
or changes in the proposed { + banking + } institution as the
director considers advisable.
(6) The applicants may appeal the decision of the director to
any court of appropriate jurisdiction.
SECTION 41. ORS 707.090 is amended to read:
707.090. If, after approving the application for authority to
organize, it appears to the Director of the Department of
Consumer and Business Services that the articles of
incorporation, the organization or { + proposed + } manner of
conducting business do not comply with the terms of the
application, the requirements of approval or the requirements of
law, the director may refuse to
{ - approve - } { + file + } the articles of incorporation or
to grant a charter.
SECTION 42. ORS 707.100 is amended to read:
707.100. Within 30 days after authority to organize has been
finally granted, the prospective incorporators shall
{ - file - } { + submit to the Director of the Department of
Consumer and Business Services + } articles of incorporation
{ - and pay to the director the organization and filing fees
required in ORS 707.130 - } . If articles of incorporation are
not { - filed - } { + received by the director + } within the
specified time, the authority to organize is void.
SECTION 43. ORS 707.110 is amended to read:
707.110. (1) Any number of persons, not less than five,
{ - citizens of the United States and residents of this
state, - } 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 { - ,
verified - } and { - filed in the office of - } { + submitted
Enrolled Senate Bill 125 (SB 125-B) Page 28
to + } the Director of the Department of Consumer and Business
Services.
(2) The articles of incorporation shall specify:
(a) The name { - by which the institution is to be known - }
{ + 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 amount of its capital stock and the par value of
each share. - }
{ - (d) - } { + (c) + } The names { - , occupations and
places of residence - } of the prospective incorporators
{ - and the number of shares subscribed for by each - } .
{ - (e) - } { + (d) + } The term of its existence, which
may be perpetual.
{ - (f) - } { + (e) + } The purpose for which the
institution { + or Oregon stock savings bank + } is formed.
{ - (g) - } { + (f) + } The { - proposed - }
{ + initial + } board of directors of the institution { + or
Oregon stock savings bank + }, composed of not { - less than
three of the - } { + fewer than five persons, at least three of
whom shall be + } prospective incorporators.
{ - (h) - } { + (g) + } { - Whether the stockholders are
given - } { + 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.
(c) May authorize one or more classes of shares that:
(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
Enrolled Senate Bill 125 (SB 125-B) Page 29
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;
(C) Any unlawful distribution under the Bank Act; or
(D) Any transaction from which the director derived an improper
personal benefit.
SECTION 44. ORS 707.120 is amended to read:
707.120. (1) If the Director { + of the Department of Consumer
and Business Services + } finds that the articles of
incorporation conform to law, the director shall within 60 days
after receiving the articles of incorporation and when all fees
have been paid:
(a) Indorse on each of the duplicate originals the word '
Filed,' and the month, day and year of the filing.
(b) File one of the duplicate originals in the office of the
director.
(c) Issue a certificate of incorporation to which the director
shall affix the other duplicate original.
(2) The certificate of incorporation, with one of the duplicate
originals affixed thereto shall be returned to the incorporators
or their representative.
(3) Upon issuance of the certificate of incorporation the
corporate existence of { - an - } { + a banking + }
institution begins.
SECTION 45. { + Section 46 of this Act is added to and made a
part of ORS chapter 707. + }
SECTION 46. { + At or after the time the articles of
incorporation are submitted for filing, the incorporators shall
submit the proposed offering documents for the sale of the
banking institution's stock to the Director of the Department of
Consumer and Business Services for review. No subscriptions for
stock in the institution or Oregon stock savings bank may be
accepted prior to the date on which the director approves the
offering documents. + }
SECTION 47. ORS 707.140 is amended to read:
707.140. { - (1) The Director of the Department of Consumer
and Business Services shall examine the condition of an
institution when the institution files with the director: - }
Enrolled Senate Bill 125 (SB 125-B) Page 30
{ - (a) A copy of its articles of incorporation, as required
by ORS 707.110. - }
{ + (1) When subscriptions totaling not less than the amount
of the initial paid-in capital have been received, the
incorporators shall submit for filing with the Director of the
Department of Consumer and Business Services: + }
{ - (b) - } { + (a) + } A list of stockholders, showing
name, address, number of shares and amount paid, { - sworn
to - } { + certified + } by the president or cashier.
{ + (b) A certificate of any escrow agent holding moneys in
escrow as payment for subscriptions to stock of the institution
or Oregon stock savings bank showing the amount held. + }
{ - (c) The sworn statement of an officer of the institution
that all requirements of law have been complied with. - }
{ - (d) - } { + (c) + } A list of the directors and
{ + senior + } officers elected.
{ - (e) The oaths of office of the directors and officers of
the institution. - }
{ - (f) - } { + (d) + } A copy of its bylaws certified to
by its president or cashier.
{ + (e) Evidence of approval by the Federal Deposit Insurance
Corporation of the Oregon commercial bank's or Oregon stock
savings bank's application for deposit insurance. + }
(2) { + Upon receiving the items referred to in subsection (1)
of this section, the director shall examine the condition of the
institution or Oregon stock savings bank. + } If, upon
examination, the director determines that the institution { + or
Oregon stock savings bank + } has complied with the requirements
of { - ORS 707.070 to 707.130 - } { + the Bank Act + } and
that the amount of { - its authorized - } { + the
institution's or Oregon stock savings bank's initial paid-in + }
capital has been paid { - in - } { + or is held in escrow for
release upon issuance of a charter + }, the director shall issue
to the institution { + or Oregon stock savings bank + } a
charter { + , which, depending on the form of the application and
the approval of the director, shall be + } to do a banking
{ - or - } { + business either as an Oregon commercial bank or
as an Oregon stock savings bank, or to do a trust business, or to
do both a banking and + } trust business.
SECTION 48. ORS 707.145 is amended to read:
707.145. The Director { + of the Department of Consumer and
Business Services + } may disapprove an application for a permit
to organize or refuse to approve the articles of incorporation or
to grant a charter { - under ORS 707.080, 707.090 or
707.140, - } upon a finding that any person named in the
application { - submitted under ORS 707.080 - } { + to
organize + } or in { - the - } { + other + } documents
submitted
{ - under ORS 707.140 - } { + for filing + }:
(1) Is insolvent, either in the sense that the person's
liabilities exceed the person's assets or that the person cannot
meet the person's obligations as they mature, or is in such
financial condition that the person cannot continue in business
with safety to the person's customers;
(2) Has engaged in dishonest, fraudulent or illegal practices
or conduct in any business or profession;
(3) Has willfully or repeatedly violated or failed to comply
with any provisions of the { - Oregon - } Bank Act or any rule
or order of the director;
Enrolled Senate Bill 125 (SB 125-B) Page 31
(4) Has been convicted of a crime, an essential element of
which is fraud;
(5) Is not qualified to conduct a banking business on the basis
of such factors as training, experience and knowledge of the
business;
(6) Is permanently or temporarily enjoined by a court of
competent jurisdiction from engaging in or continuing any conduct
or practice involving any aspect of the banking business { + or
other business that may lawfully be conducted by an insured
institution + };
(7) Is the subject of an order of the director subjecting the
person to a fine or a civil penalty, or removing the person from
an office in any entity regulated by the director; or
(8) Is the subject of an order entered within the past five
years, { + directing the person to cease and desist from any
fraudulent or unlawful business or banking practice, + }
subjecting the person to a fine or other civil penalty, or
removing the person from an office in a { - banking - }
{ + financial + } institution { - , a national bank, a state or
federal savings association, a state or federal credit union - }
or a consumer finance company issued by the banking supervisor of
another state or by the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System or by any other agency of
the Federal Government or another state with regulatory authority
over such { - banking - } { + financial + } institutions
{ - , savings associations, credit unions - } or consumer
finance companies.
SECTION 49. ORS 707.150 is amended to read:
707.150. Notwithstanding the provisions of ORS 183.310 to
183.550, the director may, without prior hearing or opportunity
therefor, refuse to grant authority to organize { - an - }
{ + a banking + } institution. In case authority to organize is
refused by the director, the applicants may within 30 days after
the refusal appeal the decision to any court of appropriate
jurisdiction.
SECTION 50. ORS 707.155 is amended to read:
707.155. (1) In the course of investigating any person named in
the application { - under ORS 707.070 - } { + to organize + }
or in { - the - } { + other + } documents { - filed under
ORS 707.140 - } { + submitted for filing + }, the Director of
the Department of Consumer and Business Services may require the
person to provide additional information for the director's
further inquiry. For the purpose of such further inquiry, the
director may require any of the following persons to submit to
fingerprinting:
(a) Any person required to be named in the application
{ - under ORS 707.070 - } { + to organize + }.
(b) Any person named in the { + proposed articles of
incorporation of the banking institution or + } documents
{ - filed under ORS 707.140 - } { + submitted for filing + }
as a prospective incorporator or as a director, president or
chief executive officer of the { + banking + } institution.
(2) Fingerprints acquired under subsection (1) of this section
may be submitted to appropriate law enforcement agencies,
including the Federal Bureau of Investigation, for the purpose of
discovering any unlawful activities of the person.
SECTION 51. ORS 707.160 is amended to read:
707.160. (1) { - An - } { + A banking + } institution shall
not transact any business, except as is incidental or necessary
to its organization, until it has received its charter from the
Enrolled Senate Bill 125 (SB 125-B) Page 32
Director { + of the Department of Consumer and Business
Services + }.
(2) An institution { - which - } { + or Oregon stock
savings bank that + } fails to { - pay in its - } { + obtain
paid subscriptions in at least the amount of its approved initial
paid-in + } capital and complete its organization and receive
from the director a charter, within one year after the date of
approval of its articles of incorporation, ceases to exist and
the articles of incorporation are void.
(3) All persons purporting to act as or on behalf of
{ - an - } { + a banking + } institution, knowing there was no
incorporation, are jointly and severally liable for all
liabilities created while so acting.
SECTION 52. ORS 707.170 is amended to read:
707.170. (1) A charter shall specify the date on which it
becomes effective, which shall not be more than { - 30 - }
{ + 90 + } days after the date of issuance of the charter,
unless an extension of time is granted by the Director { + of
the Department of Consumer and Business Services + }.
(2) { - An - } { + A banking + } institution shall commence
business on the effective date specified in its charter. If
{ - an - } { + a banking + } institution fails to commence
business on the effective date specified in the charter or
according to any extension of time granted by the director it
ceases to exist and its articles of incorporation and charter are
void.
SECTION 53. ORS 707.180 is amended to read:
707.180. { - (1) - } The { + initial + } principal place of
business of
{ - an - } { + a banking + } institution shall be specified
in its articles of incorporation. The principal place of business
may be changed upon application of the { + banking + }
institution to the Director { + of the Department of Consumer
and Business Services + }. The director shall determine whether
the change in location is advisable or justified and whether the
public convenience and advantage will be promoted and shall
approve or disapprove the change of location. An appeal from the
decision of the director may be taken to any court of appropriate
jurisdiction.
{ - (2) Except as provided in subsection (3) of this section,
the change of location approved by the director shall not take
effect until articles of amendment are approved and filed. - }
{ - (3) If the principal place of business specified in the
articles of incorporation is damaged to the extent that the
institution cannot conduct its normal business, the director may
approve an immediate change of place of business. - }
SECTION 54. ORS 707.200 is amended to read:
707.200. { - (1) - } The subscribers to the
{ - capital - } stock of { - an - } { + a newly
organized + } institution { + or Oregon stock savings bank + }
shall pay in, { - at the time of the payment - } { + prior to
the time a charter is issued, directly to the institution or
Oregon stock savings bank or by deposit with an escrow agent
acceptable to the Director of the Department of Consumer and
Business Services to be released upon the issuance of a charter,
the full amount + } of { + their + } stock subscriptions,
{ + which shall total + } an { + aggregate + } amount
{ - equal to - } not less than { - 50 percent of the
respective stock subscriptions in addition to the par value
thereof - } { + the initial paid-in capital approved by the
Enrolled Senate Bill 125 (SB 125-B) Page 33
director + }. The payment must be in cash or by exchange of real
property and improvements thereon. The real property and
improvements are subject to approval by the director as provided
in ORS 707.050.
{ - (2) One-half of the amount paid under subsection (1) of
this section shall constitute a guaranty or expense fund to be
used in liquidation of the cost of organization and for the
general expenses of the institution. When the gross operating
revenues are sufficient to pay the operating expenses any
remaining balance in the guaranty or expense fund shall be
transferred to undivided profits. - }
{ - (3) One-half of the amount paid under subsection (1) of
this section shall be placed in a surplus account. - }
SECTION 55. ORS 707.210 is amended to read:
707.210. (1) An institution { + or Oregon stock savings
bank + } shall not issue any share of stock until its charter has
been issued and ORS 707.200 has been complied with.
(2) Except as provided in subsection (3) of this section, each
certificate representing shares of the stock of an institution
{ + or Oregon stock savings bank + } shall:
(a) Be signed by { - the president or a vice president and
the secretary or an assistant secretary - } { + two
officers + } of the institution { + or Oregon stock savings bank
designated in the bylaws + }, and may be sealed with the seal of
the institution { + or Oregon stock savings bank + } or a
facsimile thereof. The signatures of the
{ - president or vice president and the secretary or assistant
secretary - } { + officers + } upon a certificate may be
facsimiles if the certificate is manually signed on behalf of a
transfer agent or registrar other than the institution { + or
Oregon stock savings bank + } itself or an employee of the
institution { + or Oregon stock savings bank + }. In the case of
any person who, as an officer, has signed or whose facsimile
signature has been placed upon such certificate and has ceased
being such officer before such certificate is issued, the
certificate may be issued by the institution { + or Oregon stock
savings bank + } with the same effect as if the person were such
officer at the date of its issue.
(b) If the institution { + or Oregon stock savings bank + } is
authorized to issue shares of more than one class, state upon the
face or back of the certificate, or state that the institution
{ + or Oregon stock savings bank + } will furnish to any
shareholder upon request and without charge, a full statement of
the designations, preferences, limitations and relative rights of
the shares of each class authorized to be issued, and, if the
institution { + or Oregon stock savings bank + } is authorized
to issue any { - preferred or special - } class in series,
state the variations in the relative rights and preferences
between the shares of each such series so far as the same have
been fixed and determined and the authority of the board of
directors to fix and determine the relative rights and
preferences of subsequent series.
(c) State that the institution { + or Oregon stock savings
bank + } is organized under the laws of this state.
(d) State the name of the person to whom issued.
(e) State the number and class of shares, and the designation
of the series, if any, which such certificate represents.
{ - (f) State the par value of each share represented by such
certificate, except that a certificate need not contain a
statement of the par value of the shares represented thereby if
Enrolled Senate Bill 125 (SB 125-B) Page 34
the certificate contains a statement identifying the records of
the institution in which the par value is recorded and stating
the location of the records. - }
(3) In lieu of issuing certificates representing shares under
subsection (2) of this section, the board of directors of an
institution { + or Oregon stock savings bank + } may authorize
the institution { + or Oregon stock savings bank + } to issue
some or all of the shares of any or all of its classes or series
without certificates. The authorization shall not affect shares
already represented by certificates until the shares are
surrendered to the institution { + or Oregon stock savings
bank + }. Within a reasonable time after the issuance or transfer
of shares without certificates, the institution { + or Oregon
stock savings bank + } shall send the shareholder a written
statement of the information required on certificates under
subsection (2) of this section.
(4) No share shall be issued until such share is fully paid.
(5) At the request of any holder of two or more certificates of
the { - capital - } stock of any institution { + or Oregon
stock savings bank + } organized under the laws of this state,
such institution { + or Oregon stock savings bank + } shall,
upon the surrender of the certificates, issue to the holder of
such { - capital - } stock one certificate { + , or a
statement pursuant to subsection (3) of this section, + } for all
shares of stock of any one class in such institution { + or
Oregon stock savings bank + } owned by the stockholder if the
number of such shares owned by the stockholder in the particular
class equals or exceeds 100.
SECTION 56. ORS 707.220 is amended to read:
707.220. { + (1) + } An institution { + or Oregon stock
savings bank + } shall keep a stock ledger or register
{ - which shall at all times during the usual hours for the
transaction of business be subject to the inspection of any
stockholder of the institution. The ledger or register - }
{ + that + } shall show { - : - }
{ - (1) - } the name and { - residence - } { + mailing
address + } of and the number of shares held by each stockholder
{ + of record. + } { - ; and - }
{ - (2) All - } { + The institution or Oregon stock savings
bank shall also maintain a record of + } transfers of stock,
stating the time when made, the number of shares transferred and
to whom transferred.
{ + (2) The stock ledger or register shall be available for
inspection and copying, during regular business hours at a
reasonable location specified by the institution or Oregon stock
savings bank, by a stockholder of the institution or Oregon stock
savings bank upon at least five days' prior written notice if:
(a) The stockholder's demand for inspection is made in good
faith and for a proper purpose;
(b) The stockholder described with reasonable particularity the
stockholder's purpose; and
(c) The stock ledger or register requested is directly
connected to the stockholder's purpose. + }
SECTION 57. ORS 707.230 is amended to read:
707.230. The shares of stock of an institution { + or Oregon
stock savings bank + } shall be transferred on the books of the
institution { + or Oregon stock savings bank + } in such manner
as the bylaws may provide and as required in ORS 707.220. A
transfer of stock is not valid while an institution { + or
Oregon stock savings bank + } is under notice from the Director
Enrolled Senate Bill 125 (SB 125-B) Page 35
of the Department of Consumer and Business Services to make good
any impairment of its
{ - capital stock - } { + stockholders' equity + }, until the
impairment has been made good.
SECTION 58. ORS 707.242 is amended to read:
707.242. The initial bylaws of an institution shall be adopted
by its board of directors. The power to alter, amend or repeal
the bylaws or adopt new bylaws shall be vested in the board of
directors unless reserved to the shareholders by the articles of
incorporation or by bylaws { - existing on December 31,
1953 - } . The bylaws may contain any provisions for the
regulation and management of the affairs of the institution not
inconsistent with law or the articles of incorporation.
SECTION 59. ORS 707.244 is amended to read:
707.244. (1) An institution { + or Oregon stock savings
bank + } may amend its articles of incorporation, from time to
time, in any and as many respects as may be desired, so long as
its articles of incorporation, as amended, contain only such
provisions as might be lawfully contained in the original
articles of incorporation at the time of making such amendment.
{ - If a change in shares or the rights of shareholders, or an
exchange, reclassification or cancellation of shares or the
rights of shareholders is to be made, the articles of
incorporation, as amended, shall contain only such provisions as
may be necessary to effect such change, exchange,
reclassification or cancellation. - }
(2) In particular, and without limitation upon such general
power of amendment, an institution { + or Oregon stock savings
bank + } may amend its articles of incorporation, from time to
time, so as:
(a) To change its corporate name.
(b) To change its period of duration.
(c) To change, enlarge or diminish its corporate purposes.
(d) To increase or decrease the aggregate number of shares, or
shares of any class, which the institution { + or Oregon stock
savings bank + } has authority to issue.
{ - (e) To increase or decrease the par value of the
authorized shares of any class with a par value, whether issued
or unissued. - }
{ - (f) - } { + (e) + } To exchange, classify, reclassify
or cancel all or any part of its shares, whether issued or
unissued.
{ - (g) - } { + (f) + } To change the designation of all or
any part of its shares, whether issued or unissued, and to change
the preferences, limitations and relative rights in respect to
all or any part of its shares, whether issued or unissued.
{ - (h) To change shares with a par value, whether issued or
unissued, into the same or a different number of shares without
par value, and to change shares without par value, whether issued
or unissued, into the same or a different number of shares with a
par value. - }
{ - (i) - } { + (g) + } To change the shares of any class,
whether issued or unissued { - and whether with or without par
value - } , into a different number of shares of the same class
or into the same or a different number of shares { - either
with or without par value, - } of other classes.
{ - (j) - } { + (h) + } To create new classes of shares
with rights and preferences either prior and superior or
subordinate and inferior to the shares of any class then
authorized, whether issued or unissued.
Enrolled Senate Bill 125 (SB 125-B) Page 36
{ - (k) - } { + (i) + } To cancel or otherwise affect the
right of the holders of the shares of any class to receive
dividends which have accrued but have not been declared.
{ - (L) - } { + (j) + } To divide any { - preferred or
special - } class of shares, whether issued or unissued, into
series and fix and determine the designations of such series and
the variations in the relative rights and preferences as between
the shares of such series.
{ - (m) - } { + (k) + } To authorize the board of directors
to establish, out of authorized but unissued shares, series of
any { - preferred or special - } class of shares and fix and
determine the relative rights and preferences of the shares of
any series so established.
{ - (n) - } { + (L) + } To authorize the board of directors
to fix and determine the relative rights and preferences of the
authorized but unissued shares of series theretofore established
in respect to which either the relative rights and preferences
have not been fixed and determined or the relative rights and
preferences theretofore fixed and determined are to be changed.
{ - (o) - } { + (m) + } To revoke, diminish or enlarge the
authority of the board of directors to establish series out of
authorized but unissued shares of any { - preferred or
special - } class and fix and determine the relative rights and
preferences of the shares of any series so established.
{ - (p) - } { + (n) + } To limit, deny or grant to
shareholders of any class the preemptive right to acquire
additional or treasury shares of the institution { + or Oregon
stock savings bank + }, whether then or thereafter authorized.
SECTION 60. ORS 707.246 is amended to read:
707.246. Amendments to the articles of incorporation shall be
made in the following manner:
(1) If an institution { + or Oregon stock savings bank + } has
issued shares of stock:
(a) The board of directors shall adopt a resolution setting
forth the proposed amendment and directing that it be submitted
to a vote at a meeting of shareholders, which may be either an
annual or a special meeting.
(b) Written or printed notice setting forth the proposed
amendment or a summary of the changes to be effected shall be
given to each shareholder of record entitled to vote within the
time and in the manner provided in this chapter for giving notice
of meetings of shareholders. If the meeting is an annual meeting,
the proposed amendment or such summary may be included in the
notice of such annual meeting.
(c) At such meeting, a vote of the shareholders entitled to
vote thereon shall be taken on the proposed amendment. The
proposed amendment shall be adopted upon receiving the
affirmative vote of the holders of at least a majority of the
shares entitled to vote thereon, unless any class of shares is
entitled to vote thereon as a class, in which event the proposed
amendment shall be adopted upon receiving the affirmative vote of
the holders of at least a majority of the shares of each class of
shares entitled to vote thereon as a class and of the total
shares entitled to vote thereon.
(2)(a) If an institution { + or Oregon stock savings bank + }
has not issued any shares of stock, the articles of incorporation
may be amended by resolution adopted by a majority of the
directors.
(b) If the provisions of the articles of incorporation relating
to the duration, purposes, authorized { - capital - } { +
Enrolled Senate Bill 125 (SB 125-B) Page 37
shares + }, rights or preferences of shares, or { - if - }
internal affairs { + of the institution or Oregon stock savings
bank + } are amended by the directors prior to the issuance of
stock, the directors shall immediately notify in writing each
person who is a party to any agreement for the subscription of
stock of the institution { + or Oregon stock savings bank + }.
Such notice shall set forth the text of the amendment and state
that the subscriber may, within 30 days after delivery or mailing
of the notice of amendment, rescind the subscriber's subscription
by notice in writing delivered or mailed to the directors at an
address specified. If a notice of rescission is not delivered or
mailed within 30 days, the subscriber may not thereafter assert
the fact of the amendment as the basis for avoiding the
subscription agreement or asserting any claim against any person.
(3) Any number of amendments may be submitted to the
shareholders or directors and voted upon by them at one meeting.
SECTION 61. ORS 707.248 is amended to read:
707.248. (1) The holders of the outstanding shares of a class
shall be entitled to vote as a class upon a proposed amendment,
whether or not entitled to vote thereon by the provisions of the
articles of incorporation, if the amendment would:
(a) Increase or decrease the aggregate number of authorized
shares of such class.
{ - (b) Increase or decrease the par value of the shares of
such class. - }
{ - (c) - } { + (b) + } Effect an exchange,
reclassification or cancellation of all or part of the shares of
such class.
{ - (d) - } { + (c) + } Effect an exchange, or create a
right of exchange, of all or any part of the shares of another
class into the shares of such class.
{ - (e) - } { + (d) + } Change the designations,
preferences, limitations or relative rights of the shares of such
class.
{ - (f) - } { + (e) + } Change the shares of such class
{ - , whether with or without par value, - } into the same or a
different number of shares { - , either with or without par
value, - } of the same class or another class or classes.
{ - (g) - } { + (f) + } Create a new class of shares with
rights and preferences prior and superior to the shares of such
class, or increase the rights and preferences of any class with
rights and preferences prior or superior to the shares of such
class.
{ - (h) - } { + (g) + } { - In the case of a preferred or
special class of shares, - } Divide the shares of such class
into series and fix and determine the designation of such series
and the variations in the relative rights and preferences between
the shares of such series or authorize the board of directors to
do so.
{ - (i) - } { + (h) + } Limit or deny the existing
preemptive rights of the shares of such class.
{ - (j) - } { + (i) + } Cancel or otherwise affect
dividends on the shares of such class which had accrued but had
not been declared.
(2) Different series of the same class of shares shall not
constitute different classes of shares for the purpose of voting
by classes upon a proposed amendment, except when a series will
be adversely affected by an amendment in a manner different from
other shares of the same class.
SECTION 62. ORS 707.250 is amended to read:
Enrolled Senate Bill 125 (SB 125-B) Page 38
707.250. The articles of amendment shall be executed in
duplicate by the institution { + or Oregon stock savings
bank + } by its president or a vice president and by its
{ + cashier, its + } secretary or an assistant secretary { - ,
and verified by one of the officers signing such articles, - }
and shall set forth:
(1) The name of the institution { + or Oregon stock savings
bank + }.
(2) If the amendment alters or changes any provision of the
original or amended articles of incorporation, an identification
by reference or description of the affected provision and a
statement of its text as it is amended to read. If the amendment
strikes or deletes any provision of the original or amended
articles of incorporation, an identification by reference or
description of the provision so stricken or deleted and a
statement that it is stricken or deleted. If the amendment is an
addition to the original or amended articles of incorporation, a
statement of that fact and the full text of each provision added.
(3) The date of the adoption of the amendment by the
shareholders.
(4) The number of shares outstanding and the number of shares
entitled to vote thereon, and if the shares of any class are
entitled to vote thereon as a class, the designation and number
of outstanding shares entitled to vote thereon of each such
class.
(5) The number of shares voted for and against such amendment,
respectively, and, if the shares of any class are entitled to
vote thereon as a class, the number of shares of each such class
voted for and against such amendment, respectively.
(6) If such amendment provides for an exchange,
reclassification or cancellation of issued shares, and, if the
manner in which the same shall be effected is not set forth in
the amendment, a statement of the manner in which the same shall
be effected.
{ - (7) If such amendment effects a change in the amount of
stated capital, a statement of the manner in which the same is
effected and a statement, expressed in dollars, of the amount of
stated capital as changed by such amendment. - }
{ - (8) - } { + (7) + } If such amendment was adopted by a
majority of the directors pursuant to ORS 707.246 (2)(a), then,
in lieu of the information required by subsections (3), (4) and
(5) of this section, a statement that no shares have yet been
issued and that the amendment was authorized as provided in ORS
707.246 (2)(a). The date of the adoption of the amendment by a
majority of the directors shall be included. Articles of
amendment under this subsection may be executed as provided in
this section or by a majority of the directors.
SECTION 63. ORS 707.252 is amended to read:
707.252. { - (1) - } Duplicate originals of the articles of
amendment shall be delivered to the Director { + of the
Department of Consumer and Business Services + }. If the director
finds that the articles of amendment conform to law, the director
shall, when all fees and charges have been paid as in this
chapter prescribed:
{ - (a) - } { + (1) + } Indorse on each such duplicate
originals the word ' Filed' and the month, day and year of the
filing thereof.
{ - (b) - } { + (2) + } File one of such duplicate
originals in the office of the director.
Enrolled Senate Bill 125 (SB 125-B) Page 39
{ - (c) Issue a certificate of amendment to which the
director shall affix the other duplicate original. - }
{ - (2) The certificate of amendment, together with the - }
{ + (3) Return one + } duplicate original of the articles of
amendment { - affixed thereto by the director, shall be
returned - } to the { + banking + } institution or its
representative.
SECTION 64. ORS 707.254 is amended to read:
707.254. (1) Upon { - issuance of the certificate of - }
{ + approval and filing of the + } amendment by the
Director { + of the Department of Consumer and Business
Services + }, the amendment shall become effective and the
articles of incorporation shall be deemed to be amended
accordingly.
(2) No amendment shall affect any existing cause of action in
favor of or against such { + banking + } institution, any
pending suit to which such { + banking + } institution shall be
a party or the existing rights of persons other than
shareholders. In the event the corporate name shall be changed by
amendment, no suit brought by or against such { + banking + }
institution under its former name shall abate for that reason.
SECTION 65. ORS 707.256 is amended to read:
707.256. (1) An institution { + or Oregon stock savings
bank + } may, by action taken in the same manner as required for
amendment of articles of incorporation, adopt restated articles
of incorporation. The restated articles of incorporation may
contain any changes in the articles of incorporation that could
be made by amendment regularly adopted. Adoption of restated
articles of incorporation containing any such changes shall have
the effect of amending the existing articles of incorporation to
conform to the restated articles of incorporation, without
further action of the board of directors or shareholders.
Restated articles of incorporation shall contain a statement that
they supersede the previously existing articles of incorporation
and amendments thereto. Restated articles of incorporation shall
contain all the statements required by ORS 707.110 to be included
in the original articles of incorporation except that { - : - }
{ - (a) The restated articles of incorporation shall set
forth the amount of its stated capital at the time of the
adoption of the restated articles of incorporation; and - }
{ - (b) - } no statement need be made with respect to the
{ + initial principal place of business or the + } number
{ - , - } { + or + } names { - and addresses - } of
directors constituting the initial board of directors or the
names { - , occupations or places of residence - } of the
incorporators { - or the shares subscribed for by each - } .
(2) Restated articles of incorporation when executed and
{ - filed - } { + submitted for filing + } with the Director
{ + of the Department of Consumer and Business Services + }
shall supersede the previously existing articles of incorporation
and amendments thereto. The director shall, upon request, certify
a copy of the articles of incorporation, the articles of
incorporation as restated or any amendments to either thereof.
(3) The restated articles of incorporation, when
{ - filed - } { + submitted for filing + }, shall be
accompanied by a statement, executed in duplicate by the
institution { + or Oregon stock savings bank + } by its
president or a vice president and by its { + cashier, its + }
secretary or an assistant secretary { - and verified by one of
Enrolled Senate Bill 125 (SB 125-B) Page 40
the officers signing such statement - } , setting forth the
following:
(a) The name of the institution { + or Oregon stock savings
bank + }.
(b) The date of the adoption of the restated articles of
incorporation by the shareholders.
(c) The number of shares outstanding and the number of shares
entitled to vote thereon, and, if the shares of any class are
entitled to vote thereon as a class, the designation and number
of outstanding shares entitled to vote thereon of each such
class.
(d) The number of shares voted for and against the restated
articles of incorporation, respectively, and, if the shares of
any class are entitled to vote thereon as a class, the number of
shares of each such class voted for and against the restated
articles of incorporation, respectively.
(e) If the restated articles of incorporation provide for an
exchange, reclassification or cancellation of issued shares, and
if the manner in which the same shall be effected is not set
forth in the restated articles of incorporation, a statement of
the manner in which the same shall be effected.
{ - (f) If the restated articles of incorporation effect a
change in the amount of stated capital, a statement of the manner
in which the same is effected and a statement, expressed in
dollars, of the amount of stated capital as changed by the
restated articles of incorporation. - }
SECTION 66. ORS 707.258 is amended to read:
707.258. (1) If the articles of incorporation so provide, the
board of directors may determine, in whole or part, the
preferences, limitations and relative rights, within the limits
set forth in ORS 707.110, of any class of shares before the
issuance of any shares of that class or of one or more series
within a class before the issuance of any shares of that series.
(2) Each series of a class must be given a distinguishing
designation.
(3) All shares of a series must have preferences, limitations
and relative rights identical with those of other shares of the
same series and, except to the extent otherwise provided in the
description of the series, of those of other series of the same
class.
(4) Before issuing any shares of a class or series created
under this section, the institution { + or Oregon stock savings
bank + } must deliver to the Director { + of the Department of
Consumer and Business Services + } for filing, articles of
amendment which are effective without shareholder action that set
forth:
(a) The name of the institution { + or Oregon stock savings
bank + };
(b) The text of the amendment determining the terms of the
class or series of shares;
(c) The date it was adopted; and
(d) A statement that the amendment was duly adopted by the
board of directors.
SECTION 67. ORS 707.260 is amended to read:
707.260. (1) An institution { + or Oregon stock savings
bank + } may:
(a) Issue fractions of a share or pay in money the value of
fractions of a share;
(b) Arrange for disposition of fractional shares by the
shareholders; { - and - } { + or + }
Enrolled Senate Bill 125 (SB 125-B) Page 41
(c) Issue scrip in registered or bearer form entitling the
holder to receive a full share upon surrendering enough scrip to
equal a full share.
(2) Each certificate representing scrip must be conspicuously
labeled 'scrip' and must contain the following information:
(a) The name of the issuing institution { + or Oregon stock
savings bank + } and a statement that it is organized under the
law of this state;
(b) The name of the person to whom the scrip is issued; and
(c) The number and class of shares and the designation of the
series, if any, for which the certificate may be exchanged.
(3) The holder of a fractional share is entitled to exercise
the rights of a shareholder, including the right to vote, receive
dividends and participate in the assets of the institution
{ + or Oregon stock savings bank + } upon liquidation. The
holder of scrip is not entitled to any of these rights unless the
scrip provides for them.
(4) The board of directors may authorize the issuance of scrip
subject to any condition considered desirable, including:
(a) That the scrip will become void if not exchanged for full
shares before a specified date; or
(b) That the shares for which the scrip is exchangeable may be
sold and the proceeds paid to the scripholders.
SECTION 68. ORS 707.262 is amended to read:
707.262. Subject to any provisions set forth in its articles of
incorporation and subject to preemptive rights, if any, of
existing shareholders, an institution { + or Oregon stock
savings bank + } may create and issue, whether or not in
connection with the issuance and sale of any of its shares or
other securities, rights or options entitling the holders thereof
to purchase from the institution { + or Oregon stock savings
bank + } shares of any class or classes. Such rights or options
shall be evidenced in such manner as the board of directors shall
approve and, subject to the provisions of the articles of
incorporation, shall set forth the terms upon which, the time or
times within which and the price or prices at which such shares
may be purchased from the institution { + or Oregon stock
savings bank + } on the exercise of any such right or option. No
such rights or options shall be issued to a director, officer or
employee of the institution { + or Oregon stock savings bank + }
or of any subsidiary thereof unless the issuance is approved at
the annual meeting or a special meeting by the holders of at
least two-thirds of the outstanding shares entitled to vote
thereon, or unless such issuance is pursuant to a plan previously
so approved. In the absence of fraud in the transaction, the
judgment of the board of directors as to the adequacy of the
consideration received for such rights or options shall be
conclusive. { - The price or prices to be received for any
shares with a par value, other than treasury shares to be issued
on the exercise of such rights or options, shall not be less than
the par value thereof. - }
SECTION 69. ORS 707.266 is amended to read:
707.266. The reasonable charges and expenses of organization or
reorganization of an institution { + or Oregon stock savings
bank + }, and the reasonable expenses of and compensation for the
sale or underwriting of its shares, may be paid or allowed by
such institution { + or Oregon stock savings bank + } out of the
consideration received by it in payment for its shares without
rendering such shares not fully paid and nonassessable.
SECTION 70. ORS 707.268 is amended to read:
Enrolled Senate Bill 125 (SB 125-B) Page 42
707.268. No redemption or purchase of { - redeemable - }
shares shall be made by an institution { + or Oregon stock
savings bank + } when it is insolvent or when such redemption or
purchase would render it insolvent, or which would reduce the net
assets below the aggregate amount payable to the shareholders
with prior or equal rights to the assets of the institution
{ + or Oregon stock savings bank + } upon involuntary
dissolution.
SECTION 71. ORS 707.270 is amended to read:
707.270. (1) When { - redeemable - } shares of an
institution { + or Oregon stock savings bank + } are
redeemed { + , + } { - or purchased by the institution, the
redemption or purchase shall effect a cancellation of such
shares, and a statement of cancellation shall be filed as
provided in this section. Thereupon such - } { + the + } shares
shall be restored to the status of authorized but unissued
shares, unless the articles of incorporation provide that
{ - such - } shares when redeemed { - or purchased - } shall
not be reissued, in which case
{ - the filing of the - } { + a + } statement of cancellation
{ + shall be submitted for filing as provided in this
section, + } shall constitute an amendment to the articles of
incorporation and shall reduce the number of shares of the class
so canceled, which the institution { + or Oregon stock savings
bank + } is authorized to issue by the number of shares so
canceled.
(2) The statement of cancellation shall be executed in
duplicate by the institution { + or Oregon stock savings
bank + } by { - its president or a vice president and by its
secretary or an assistant secretary, and verified by one of the
officers signing such statement, - } { + an authorized
officer + } and shall set forth:
(a) The name of the institution { + or Oregon stock savings
bank + }.
(b) The number of { - redeemable - } shares canceled through
redemption { - or purchase - } , itemized by classes and
series.
{ - (c) The aggregate number of issued shares, itemized by
classes and series, after giving effect to such cancellation. - }
{ - (d) The amount, expressed in dollars, of the stated
capital of the institution after giving effect to such
cancellation. - }
{ - (e) - } { + (c) + } { - If the articles of
incorporation provide that the canceled shares shall not be
reissued, - } The number of shares
{ - which - } { + that + } the institution { + or Oregon
stock savings bank + } has authority to issue, itemized by
classes and series, after giving effect to such cancellation.
(3) Duplicate originals of such statement shall be
{ - delivered - } { + submitted + } to the Director { + of
the Department of Consumer and Business Services for filing + }.
If the director finds that such statement conforms to law, the
director shall, when all fees and charges have been paid as
prescribed by this chapter:
(a) Indorse on each duplicate original the word 'Filed' and the
month, day and year of the filing thereof.
(b) File one duplicate original in the office of the director.
(c) Return the other duplicate original to the institution
{ + or Oregon stock savings bank + } or its representative.
Enrolled Senate Bill 125 (SB 125-B) Page 43
{ - (4) Upon the filing of such statement of cancellation,
the stated capital of the institution shall be deemed to be
reduced by that part of the stated capital which was, at the time
of such cancellation, represented by the shares so canceled. - }
{ - (5) - } { + (4) + } Nothing contained in this section
shall be construed to forbid a cancellation of shares or a
reduction { - of stated capital - } { + in the number of
authorized shares of any class + } in any other manner permitted
by the Bank Act.
SECTION 72. ORS 707.272 is amended to read:
707.272. { - (1) The surplus, if any, created by or arising
out of a reduction of the stated capital of an institution shall
be capital surplus. - }
{ - (2) - } { + (1) + } The { + paid-in + } capital
{ - surplus - } of an institution { + or Oregon stock savings
bank + } may be increased from time to time by resolution of the
board of directors directing that all or a part of the
{ - earned surplus - } { + retained earnings + } of the
institution { + or Oregon stock savings bank + } be transferred
to { + paid-in + } capital
{ - surplus - } .
{ - (3) - } { + (2) + } An institution { + or Oregon stock
savings bank + } may, by resolution of its board of directors
{ + and with the approval of the Director of the Department of
Consumer and Business Services + }, apply { - any - } part
{ - or all - } of its { + paid-in + } capital
{ - surplus - } to the reduction or elimination of any deficit
{ + in retained earnings + } arising from losses { + . + }
{ - , however incurred, but only after first eliminating the
earned surplus, if any, of the institution by applying such
losses against earned surplus and only to the extent that such
losses exceed the earned surplus, if any. Each such application
of capital surplus shall, to the extent thereof, effect a
reduction of capital surplus. - }
{ - (4) - } { + (3) + } An institution { + or Oregon stock
savings bank + } may, by resolution of its board of directors,
create a reserve or reserves out of its { - earned surplus - }
{ + retained earnings + } for any proper purpose or purposes and
may abolish any such reserve in the same manner. { - Earned
surplus - } { + Retained earnings + } of the institution
{ + or Oregon stock savings bank + } to the extent so reserved
shall not be available for the payment of dividends or other
distributions by the institution { + or Oregon stock savings
bank + } except as expressly permitted by the Bank Act.
{ + (4) An institution or Oregon stock savings bank may
redeem shares of its stock only with the prior approval of the
director. A class or series of shares may be designated
redeemable upon certain terms and conditions in advance of its
issuance with the prior approval of the director, in which event
no further approval shall be required to redeem the shares in
accordance with the terms and conditions approved.
(5) The director may refuse to approve a reduction in paid-in
capital under subsection (2) of this section or redemption of
shares under subsection (4) of this section if the director
determines that the remaining paid-in capital of the institution
or Oregon stock savings bank would be inadequate for the safe and
sound operation of the institution or Oregon stock savings bank.
(6) The director may by rule or order waive the requirement for
prior approval of redemptions of shares. + }
SECTION 73. ORS 707.350 is amended to read:
Enrolled Senate Bill 125 (SB 125-B) Page 44
707.350. { - (1) Subject to the approval of the Director of
the Department of Consumer and Business Services, an institution
may increase or reduce its capital stock, but not below the
minimum provided by ORS 707.050, by filing articles of amendment.
The increase or reduction in the capital stock shall become
effective upon issuance by the section of the certificate of
amendment. - }
{ - (2) - } { + (1) + } An institution { + or Oregon stock
savings bank + } shall not issue any certificate of stock
{ - under any increase of capital - } until full payment for the
stock has been received. { - Except as provided by ORS 707.355,
the amount of any increased capital - } Stock { + sold after
initial organization of the institution or Oregon stock savings
bank + } shall be paid in the same manner as required in the
organization of an institution { + or Oregon stock savings
bank + }.
{ - However, the whole or any part of the surplus fund of an
institution, if held as the exclusive property of the
stockholders, may, with the approval of the director, but not
otherwise, be converted into paid-in capital. If all or any part
of the surplus fund is converted into paid-in capital, surplus
shall be restored in the manner provided for under ORS 707.400,
until the whole amount of the surplus fund shall be not less than
50 percent of the aggregate paid-up capital stock. - }
{ - (3) - } { + (2) + } Notwithstanding { - subsections
(1) and (2) - } { + subsection (1) + } of this section, an
institution { + or Oregon stock savings bank + } shall have the
power to create and issue the number of shares of
{ - capital - } stock stated in its articles of incorporation
or the amendments thereto.
SECTION 74. ORS 707.380 is amended to read:
707.380. The board of directors of an institution { + or
Oregon stock savings bank + } may, at any regular meeting,
declare a dividend, but the amount of the dividend shall not be
greater than its { + unreserved retained earnings + } { - net
undivided profits then on hand - } , deducting therefrom { + , to
the extent not already charged against earnings or reflected in a
reserve, the following + }:
{ - (1) All losses. - }
{ - (2) - } { + (1) + } All bad debts, { - unless the
same are well secured: - } { + which are debts + }
{ - (a) - } on which interest { - for a period of one
year - } is past due and unpaid { + for at least six months,
unless the debt is fully secured and in the process of
collection + } { - ; and - } { + . + }
{ - (b) Upon which final judgment has been obtained but for
more than one year judgment has been unsatisfied and interest has
not been paid. - }
{ - (3) - } { + (2) + } All { + other + } assets { - or
depreciation - } charged off as required by the director
{ - of the Department of Consumer and Business Services - } or
{ - an - } { + a state or federal + } examiner.
{ - (4) - } { + (3) + } All accrued expenses, interest and
taxes of the institution { + or Oregon stock savings bank + }.
SECTION 75. ORS 707.400 is amended to read:
707.400. { - (1) Before any dividend is declared or the net
profits for the period covered by the dividend are in any way
disposed of, not less than one-fifth of the net profits shall be
carried to a surplus fund until the surplus fund amounts to 50
percent of the paid-in capital of the institution. - }
Enrolled Senate Bill 125 (SB 125-B) Page 45
{ - (2) - } The Director of the Department of Consumer and
Business Services may require any institution { + or Oregon
stock savings bank + } to suspend the payment of any dividends
{ - until the institution complies with all the provisions of
the Bank Act - } { + if the director determines that the
payment of dividends would result in the remaining stockholders'
equity of the institution or Oregon stock savings bank being
inadequate for the safe and sound operation of the institution or
Oregon stock savings bank + }.
SECTION 76. { + Section 77 of this Act is added to and made a
part of ORS chapter 707. + }
SECTION 77. { + Within 10 days after the declaration of any
dividend, an institution or Oregon stock savings bank shall
forward to the Director of the Department of Consumer and
Business Services a report of the dividend declared. This report
shall also be included in the report required in ORS 706.660. + }
SECTION 78. ORS 707.610 is amended to read:
707.610. (1) A stockholders' meeting for the election of a
board of directors and transaction of other business shall be
held in this state within 120 days after the close of the fiscal
year of the institution { + or Oregon stock savings bank + }. If
an institution { + or Oregon stock savings bank + } was issued
one or more orders by the Director { + of the Department of
Consumer and Business Services + } under ORS 706.580 within the
fiscal year immediately preceding the date of the stockholders'
meeting, the institution { + or Oregon stock savings bank + }
shall include in every notice required for the stockholders'
meeting under ORS 707.611:
(a) A copy of ORS 706.580; and
(b) A statement that the institution { + or Oregon stock
savings bank + } received such an order or orders.
(2) A special meeting of stockholders may be called at any time
by the chief executive officer, a majority of the board of
directors, any other person or group authorized by the articles
of incorporation or bylaws of the institution { + or Oregon
stock savings bank + } to call such meetings, or not fewer than
three stockholders holding in the aggregate not less than
one-third of the outstanding { - capital - } { + voting + }
stock of the institution { + or Oregon stock savings bank + }.
The articles of incorporation or bylaws of the institution
{ + or Oregon stock savings bank + } may reserve to an officer
or the board of directors the authority to designate the time and
place of such a meeting. However, the meetings shall be held in
the State of Oregon. Unless the director consents to a later
meeting date, the meetings shall be held not later than 45 days
after the call for the meeting is issued.
SECTION 79. ORS 707.611 is amended to read:
707.611. Written or printed notice stating the place, date and
hour of the meeting and, in case of a special meeting, the
purpose or purposes for which the meeting is called shall be
delivered not less than 10 days nor more than { - 50 - }
{ + 60 + } days before the date of the meeting, either
personally or by mail, by or at the direction of the
president { + , the cashier + }, the secretary or the officer or
persons calling the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail
addressed to the shareholder at the shareholder's address as it
appears on the stock transfer books of the institution { + or
Oregon stock savings bank + }, with postage prepaid.
Enrolled Senate Bill 125 (SB 125-B) Page 46
SECTION 80. ORS 707.612 is amended to read:
707.612. Any action required by this chapter to be taken at a
meeting of the shareholders or directors of an institution
{ + or Oregon stock savings bank + } or any other action which
may be taken at a meeting of the shareholders, directors or of a
committee may be taken without a meeting if a consent in writing
setting forth the action so taken { - shall be - } { + is + }
signed by all of the shareholders or directors or all of the
members of the committee entitled to vote with respect to the
subject matter thereof. { + The consent shall be delivered to
the institution or Oregon stock savings bank for inclusion in the
minutes or for filing with the corporate records. + } The action
shall be effective on the date on which the last signature is
placed on the consent or consents or at such earlier time as is
set forth therein. Such consent or consents shall have the same
force and effect as a unanimous vote of such shareholders,
directors or committee members and may be stated as such in any
articles or document filed under this chapter. { + If not
otherwise determined in accordance with ORS 707.615, the record
date for determining shareholders entitled to take action by
consent without a meeting is the date the first shareholder signs
the consent. + }
SECTION 81. ORS 707.613 is amended to read:
707.613. { + (1) + } A shareholder may, at any time, waive any
notice required by this chapter, the articles of incorporation or
bylaws. The waiver must be in writing, be signed by the
shareholder entitled to the notice and be delivered to the
institution { + or Oregon stock savings bank + } for inclusion
in { - the minutes for filing with - } the corporate records.
{ + (2) Attendance at a meeting by a shareholder waives
objection to:
(a) Lack of notice or defective notice of the meeting, unless
the shareholder at the beginning of the meeting objects to the
holding of the meeting or the transacting of business at the
meeting; and
(b) Consideration of a particular matter at the meeting that is
not within the purpose or purposes described in the meeting
notice, unless the shareholder objects to considering the matter
when it is presented. + }
SECTION 82. ORS 707.615 is amended to read:
707.615. (1) For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other proper purpose, the board of directors of an
institution { + or Oregon stock savings bank + } may provide
that the stock transfer books shall be closed for a stated
period, not to exceed in any case { - 50 - } { + 70 + } days.
If the stock transfer books shall be closed for the purpose of
determining the shareholders entitled to notice of or to vote at
a meeting of shareholders, such books shall be closed for at
least 10 days immediately preceding such meeting.
(2) In lieu of closing the stock transfer books, the bylaws or,
in the absence of an applicable bylaw, the board of directors may
fix in advance a date as the record date for any such
determination of shareholders. The record date, in any case,
shall be not more than { - 50 - } { + 70 + } days and, in the
case of a meeting of shareholders, not less than 10 days prior to
the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock
Enrolled Senate Bill 125 (SB 125-B) Page 47
transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at
a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the { + close of business on the business
day before the + } date on which notice of the meeting is mailed
or the date on which the resolution of the board of directors
declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders.
(3) When a determination of shareholders entitled to vote at
any meeting of shareholders has been made as provided in this
section, such determination shall apply to any adjournment
thereof { + , unless the meeting is adjourned to a date more than
120 days from the original meeting date + }.
SECTION 83. ORS 707.617 is amended to read:
707.617. (1) The officer or agent having charge of the stock
transfer books for shares of an institution { + or Oregon stock
savings bank + } shall make, at least 10 days prior to each
meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof. The
list shall be arranged in alphabetical order, with the address of
and the number of shares held by each shareholder and, for a
period of 10 days prior to such meeting, shall be kept on file at
the registered office of the institution { + or Oregon stock
savings bank + } and shall be subject to inspection by any
shareholder at any time during usual business hours. Such list
also shall be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting. The original stock transfer
books shall be prima facie evidence as to which shareholders are
entitled to examine such list or transfer books or to vote at any
meeting of shareholders.
(2) Failure to comply with the requirements of this section
shall not affect the validity of any action taken at such
meeting.
{ - (3) An officer or agent having charge of the stock
transfer books who fails to prepare the list of shareholders, to
keep it on file for a period of 10 days prior to each meeting of
shareholders or to produce and keep it open for inspection at the
meeting, as provided in this section, shall be liable to any
shareholder suffering damage on account of such failure, to the
extent of such damage. - }
SECTION 84. ORS 707.619 is amended to read:
707.619. (1) Each outstanding share, regardless of class, shall
be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting
rights of the shares of any class or classes are limited or
denied by the articles of incorporation as permitted by the Bank
Act.
(2) Neither { - treasury shares, nor - } shares of its own
stock held by { - an - } { + the + } institution { + or
Oregon stock savings bank + } in a fiduciary capacity, nor shares
held by another corporation if a majority of the shares entitled
to vote for the election of directors of such other corporation
is held by the institution { + or Oregon stock savings bank + }
shall be voted at any meeting or counted in determining the total
number of outstanding shares at any given time. The prohibition
of this subsection does not apply if, under the terms of a trust
in which such shares are held, the manner in which such shares
shall be voted may be determined by the trustee, by a donor or
beneficiary of the trust or by some other person named in the
Enrolled Senate Bill 125 (SB 125-B) Page 48
trust, and such shares are actually voted in the manner
determined or directed by the trustee, donor, beneficiary or
other person so authorized.
(3) A shareholder may vote either in person or by proxy
executed in writing by the shareholder or by the shareholder's
duly authorized attorney in fact. No proxy shall be valid after
11 months from the date of its execution, unless otherwise
provided in the proxy.
(4) { - At each election for directors - } { + In electing
each director for whose election the shareholder has a right to
vote + }, every shareholder entitled to vote at such election
shall have the right to vote, either in person or by proxy, the
number of shares owned by the shareholder { - for as many
persons as there are directors to be elected and for whose
election the shareholder has a right to vote - } . If the
articles of incorporation specifically permit cumulative voting,
every shareholder shall have the right to cumulate the
shareholder's votes either by giving one candidate as many votes
as the number of such directors multiplied by the number of the
shareholder's shares shall equal or by distributing such votes on
the same principle among any number of such candidates.
(5) Shares standing in the name of another domestic or foreign
corporation { + , a limited liability company, a partnership or
another entity + } may be voted by such officer, agent or proxy
as the
{ - bylaws of such corporation - } { + governing documents of
the entity + } may prescribe or, in absence of such provision, as
the board of directors { - of such corporation - } { + or
other governing body of the entity holding the shares + } may
determine.
(6) Shares held by { - an - } { + a personal
representative, + } administrator, executor, guardian or
conservator may be voted by such person, either in person or by
proxy, without a transfer of such shares into such person's name.
Shares standing in the name of a trustee may be voted by the
trustee, either in person or by proxy, but no trustee shall be
entitled to vote shares held by the trustee without a transfer of
the shares to the name of the trustee.
(7) Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under control of a receiver
may be voted by such receiver without a transfer into the
receiver's name if authority to do so is contained in an
appropriate order of the court by which such receiver was
appointed.
(8) { - A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been
transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred - }
{ + Shares may be voted by a pledgee or attorney-in-fact of the
shareholder if authorized by the pledge agreement or power of
attorney and evidence of such authority is presented to the
institution or Oregon stock savings bank upon request + }.
(9) On and after the date on which written notice of redemption
of { - redeemable - } shares has been mailed to the holders
thereof and a sum sufficient to redeem such shares has been
deposited with another institution { + or Oregon stock savings
bank + } with irrevocable instruction and authority to pay the
redemption price to the holders thereof upon surrender of
certificates therefor, such shares shall not be entitled to vote
on any matter and shall not be deemed to be outstanding shares.
Enrolled Senate Bill 125 (SB 125-B) Page 49
SECTION 85. ORS 707.620 is amended to read:
707.620. If the Director of the Department of Consumer and
Business Services considers it expedient the director may call a
meeting of the stockholders of any institution { + or Oregon
stock savings bank + } by giving 15 days' notice of the meeting
to the stockholders in the manner prescribed in { - the bylaws
of the institution for giving notice to stockholders - } { +
ORS 707.611 + }. All necessary expense incurred in the serving of
the notice shall be paid by the institution { + or Oregon stock
savings bank + }.
SECTION 86. ORS 707.621 is amended to read:
707.621. (1) Unless otherwise provided in the articles of
incorporation, a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a
meeting of shareholders { - , but in no event shall a quorum
consist of less than one-third of the shares entitled to vote at
the meeting - } . If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting { + at the
time the vote is taken + } and entitled to vote on the subject
matter shall be the act of the shareholders, unless the vote of a
greater number or voting by classes is required by the Bank Act
or the articles of incorporation.
(2) { - The shareholders present at a duly organized meeting
may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave
less than a quorum - } { + Once a share is represented at a
meeting, it is deemed present for quorum purposes for the
remainder of the meeting and for any adjournment of that meeting
unless a new record date is or must be set for that adjourned
meeting + }.
SECTION 87. ORS 707.623 is amended to read:
707.623. { - Whenever, with respect to any action to be taken
by the shareholders of an institution, the articles of
incorporation require the vote or concurrence of the holders of a
greater proportion of the shares, or of any class or series
thereof, than that required by this chapter with respect to such
action, the provisions of the articles of incorporation shall
control. - }
{ + (1) The articles of incorporation may provide for a
lesser or greater quorum requirement for shareholders, or voting
groups of shareholders, than is provided for by this chapter, but
in no event shall a quorum for shareholders, or any voting group
of shareholders, consist of less than one-third of the votes
entitled to be cast on any matter by the shareholders or voting
group of shareholders. The articles of incorporation may provide
for a greater voting requirement for shareholders, or voting
groups of shareholders, than is provided for by this chapter.
(2) An amendment to the articles of incorporation that adds a
greater quorum or voting requirement must meet the quorum
requirement and be adopted by the vote and voting groups required
to take action under the quorum and voting requirements then in
effect. An amendment to the articles of incorporation that
changes or deletes a greater quorum or voting requirement must
meet the quorum requirement and be adopted by the vote and voting
groups required to take action immediately prior to the change or
deletion. + }
SECTION 88. ORS 707.625 is amended to read:
707.625. A person may not be held personally liable for an act
done or omitted by the person in good faith and in compliance
with a { + statute, + } rule or order of the Director of the
Enrolled Senate Bill 125 (SB 125-B) Page 50
Department of Consumer and Business Services under this chapter
regardless of whether the { + statute, + } rule or order is
later amended, rescinded or determined to be invalid by judicial
or other authority.
SECTION 89. ORS 707.642 is amended to read:
707.642. After the issuance of the certificate of
incorporation, an { - organization - } { + organizational + }
meeting of the board of directors named in the articles of
incorporation shall be held, either within or without this state,
at the call of a majority of the incorporators, for the purpose
of adopting bylaws, electing officers and transacting such other
business as may come before the meeting. The incorporators who
called the meeting shall give at least three days' notice thereof
by mail to each director so named, which notice shall state the
time { + , + } { - and - } place { + and purpose + } of the
meeting.
SECTION 90. ORS 707.644 is amended to read:
707.644. { + (1) + } If { + provided by + } the articles of
incorporation or the bylaws { - so provide - } , the board of
directors, by resolution adopted by a majority of all the
directors in office when the action is taken, may designate from
among its members { - an executive committee and - } one or
more { - other - } committees. { - The executive committee
and one or more other committees, - } To the extent provided in
{ - such - } { + the + } resolution or in the articles of
incorporation or the bylaws of the { + banking + } institution,
{ + the committees + } shall have and may exercise all the
authority of the board of directors in the management of the
{ + banking + } institution.
{ + (2) + } No { - such - } committee shall have the
authority of the board of directors in reference to { + :
(a) + } Amending the articles of incorporation;
{ + (b) Approving dividends or other distributions to
shareholders of an institution or Oregon stock savings bank;
(c) Filling vacancies on the board of directors or on any of
its committees;
(d) Approving the reacquisition of shares of the institution or
Oregon stock savings bank;
(e) + } Adopting a plan of merger or consolidation;
{ + (f) + } Recommending to the shareholders the sale, lease,
exchange, mortgage, pledge or other disposition of all or
substantially all the property and assets of the institution
{ + or Oregon stock savings bank + } other than in the usual and
regular course of its business;
{ + (g) + } Recommending to the shareholders a voluntary
dissolution of the institution { + or Oregon stock savings
bank + } or a revocation thereof; { - or - }
{ + (h) + } Amending the bylaws of the { + banking + }
institution { + ; or
(i) Approving the issuance or sale or contract for sale of
shares or determining the designation and relative rights,
preferences and limitations of a class or series of shares of the
institution or Oregon stock savings bank.
(3) Notwithstanding subsection (2) of this section, the board
of directors may authorize a committee to take action described
in subsection (2)(i) of this section pursuant to a stock option
or other stock compensation plan, or by approving the maximum
number of shares to be issued and delegating to the committee the
authority to determine all or any part of the terms of the
issuance or sale or contract of sale and the determination of the
Enrolled Senate Bill 125 (SB 125-B) Page 51
designation and relative rights, preferences and limitations of
the class or series of shares + }.
{ + (4) + } The designation of { - such - } committees and
the delegation thereto of authority shall not operate to relieve
the board of directors, or any member thereof, of any
responsibility imposed upon the board of directors or such member
by law.
SECTION 91. ORS 707.646 is amended to read:
707.646. { + (1) + } If there are six or more directors, the
articles of incorporation or the bylaws may provide for
staggering their terms by dividing the total number of directors
into two or three groups, with each group to be as nearly equal
in number as possible. In that event, the terms of directors in
the first group expire at the first annual
{ - shareholders' - } meeting after their election; the terms
of the second group expire at the second annual
{ - shareholders' - } meeting after their election; and the
terms of the third group, if any, expire at the third annual
{ - shareholders' - } meeting after their election.
Thereafter, directors shall be chosen for a term of two years or
three years, as the case may be, to succeed those whose terms
expire.
{ + (2) + } If the institution { + or Oregon stock savings
bank + } has cumulative voting, terms of directors may be
staggered only if authorized by the articles of incorporation,
and no class shall have fewer than three members.
SECTION 92. ORS 707.660 is amended to read:
707.660. { - (1) Each director and officer of an institution
and each resident officer, manager or agent of any foreign or
extranational institution, when initially appointed or elected,
shall take an oath that the director, officer, manager or agent
will, as far as the duty devolves on the director, officer,
manager or agent, diligently and honestly administer the affairs
of the institution or foreign or extranational institution, and
that the director, officer, manager or agent will not knowingly
violate or permit to be violated any of the provisions of law
applicable to the institution or the foreign or extranational
institution. - }
{ - (2) The oath shall be subscribed by the director,
officer, manager or agent taking it, certified by the officer
before whom it is taken and immediately transmitted to the
Director of the Department of Consumer and Business Services. - }
{ + (1) In discharging the duties of a director, a director
is entitled to rely on information, opinions, reports or
statements, including financial statements and other financial
data, if prepared or presented by:
(a) One or more officers or employees of the banking
institution whom the director reasonably believes to be reliable
and competent in the matters presented;
(b) Legal counsel, public accountants or other persons as to
matters the director reasonably believes are within the person's
professional or expert competence; or
(c) A committee of the board of directors of which the director
is not a member, if the director reasonably believes the
committee merits confidence.
(2) A director is not acting in good faith if the director has
knowledge concerning a matter in question that makes reliance
otherwise permitted by subsection (1) of this section
unwarranted.
Enrolled Senate Bill 125 (SB 125-B) Page 52
(3) When evaluating any offer of another party to make a tender
or exchange offer for any equity security of the banking
institution, or any proposal to merge the banking institution
with another banking institution or to purchase or otherwise
acquire all or substantially all the properties and assets of the
banking institution, the directors of a banking institution may,
in determining what the directors believe to be in the best
interests of the banking institution, give due consideration to
the social, legal and economic effects on employees, customers
and suppliers of the banking institution and on the communities
and geographical areas in which the banking institution and its
subsidiaries operate, the economy of the state and nation, the
long term as well as short term interests of the banking
institution and its stockholders, including the possibility that
these interests may be best served by the continued independence
of the banking institution, and other relevant factors. + }
SECTION 93. { + Section 94 of this Act is added to and made a
part of ORS chapter 707. + }
SECTION 94. { + (1) In discharging the duties of an officer,
an officer is entitled to rely on information, opinions, reports
or statements, including financial statements and other financial
data, if prepared or presented by:
(a) One or more officers or employees of the banking
institution whom the officer reasonably believes to be reliable
and competent in the matters presented; or
(b) Legal counsel, public accountants or other persons as to
matters the officer reasonably believes are within the person's
professional or expert competence.
(2) An officer is not acting in good faith if the officer has
knowledge concerning the matter in question that makes reliance
otherwise permitted by subsection (1) of this section
unwarranted. + }
SECTION 95. ORS 707.670 is amended to read:
707.670. (1)(a) The board of directors of { - an - } { + a
banking + } institution shall hold regular meetings as provided
in this subsection.
(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, the board of directors of { - an - }
{ + 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 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 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 this state.
Enrolled Senate Bill 125 (SB 125-B) Page 53
(6) { - Regular meetings of the board of directors may be
held with or without notice as prescribed in the bylaws.
Special - } Meetings of the board of directors shall be held upon
such notice as is prescribed in the bylaws. Attendance of a
director at a meeting shall constitute a waiver of notice of such
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. Neither
the business to be transacted at nor the purpose of any
{ - regular or special - } 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, members of the board of directors of
{ - an - } { + 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 presence in person at the
meeting.
SECTION 96. ORS 707.675 is amended to read:
707.675. The board of directors shall designate an officer of
the { + banking + } institution to prepare and submit to the
board at every meeting or to { - an executive - } { + a + }
committee of not less than three members of the board of
directors a report, in such detail as the board may direct, of
the loans and investments made during the preceding month or
since the last report, and { - the aggregate of the - }
{ + information concerning + } loans to { - all - } officers,
directors and employees. The board of directors shall examine
{ - and pass upon - } the report and make it a part of the
record of the meeting by recording the report in full in the
minutes. { - The record shall show their approval or
disapproval of the report and be signed by each director present
at the meeting. - }
SECTION 97. ORS 707.680 is amended to read:
707.680. (1) The Director of the Department of Consumer and
Business Services may call a meeting of the board of directors of
any { + banking + } institution by mailing a notice of the
meeting to each director. The notice shall state the purpose of
the meeting and designate the time and place where the meeting
shall be held.
(2) A director who fails to appear at the meeting without
proper cause is subject to a penalty of { - $100 - } { + up
to $1,000 + } for each { + meeting + } { - day - } the
director fails to { - appear pursuant to the notice - } { +
attend + }. The penalty shall be collected in the manner
prescribed by ORS 706.570.
SECTION 98. ORS 707.690 is amended to read:
707.690. Subject to ORS 707.705, any vacancy in the board of
directors may be filled by the board for the unexpired term at
{ - the first - } { + a + } regular meeting after the vacancy
occurs { + or as otherwise provided in the bylaws of the banking
institution + }.
SECTION 99. ORS 707.700 is amended to read:
707.700. (1) After a charter has been issued to { - an - }
{ + a banking + } institution, the board of directors shall
elect a chief executive officer who shall also be a director, a
president who also may be the chief executive officer,
Enrolled Senate Bill 125 (SB 125-B) Page 54
{ - and - } at least one vice president { + , and a cashier or
secretary, + } and may appoint { - a cashier, a treasurer and
all necessary - } { + such other + } officers and employees
{ + as the board of directors considers necessary or
appropriate + }.
(2) The board of directors may define the duties, fix the
compensation, dismiss, fill vacancies and require bonds or
irrevocable letters of credit for the faithful performance of the
duties of the employees and officers of the { + banking + }
institution.
(3) In the event the board dismisses { - the chief
executive - } { + an + } officer, the { - chief executive - }
officer shall no longer serve as a director.
(4) Any officer or agent elected or appointed by the board of
directors may be removed by the board of directors whenever, in
its judgment, the best interests of the { + banking + }
institution will be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer or agent shall
not of itself create contract rights.
SECTION 100. ORS 707.705 is amended to read:
707.705. (1) { - After a charter has been issued to a banking
institution, - } Before a person first takes office as director,
president or chief executive officer { + of a banking
institution + }, the name of the person shall be submitted to the
Director of the Department of Consumer and Business Services,
with any information about the person that the director may
require.
(2) The director shall investigate each person whose name is
submitted under this section to determine the character, honesty,
financial responsibility and competence of the person. In the
course of investigating any person under this section, the
director may require the person to provide additional information
for the director's further inquiry. For the purpose of such
further inquiry, the director may require the person to submit to
fingerprinting. Fingerprints acquired under this subsection may
be submitted to appropriate law enforcement agencies, including
the Federal Bureau of Investigation, for the purpose of
discovering any unlawful activities of the person.
(3) The director may disapprove the election or appointment of
the person for any reason stated in ORS 707.145. The director
shall issue the disapproval in writing to the board of directors
that submitted the person's name. A copy of the disapproval shall
be served personally or by certified mail upon the disapproved
person. The disapproval may be issued without a prior
administrative hearing.
(4) A person whom the director disapproves under this section
may appeal the disapproval as a contested case pursuant to ORS
183.415 to 183.500.
SECTION 101. ORS 707.710 is amended to read:
707.710. (1) For any reason specified in subsection (2) of this
section, the Director of the Department of Consumer and Business
Services by order { - : - }
{ - (a) - } may direct the board of directors of a banking
institution to remove a director or officer of the banking
institution.
{ - (b) May direct the board of directors of a foreign or
extranational institution to remove a resident officer, manager
or agent of the foreign or extranational institution. - }
Enrolled Senate Bill 125 (SB 125-B) Page 55
(2) The director { - of the Department of Consumer and
Business Services - } may issue an order of removal under
subsection (1) of this section:
(a) For any reason stated in ORS 707.145; or
(b) If the person who is the subject of the order has refused
otherwise to comply with any written requirements or instructions
of the director.
(3) An order of removal under this section shall be in writing
and may be issued without a prior administrative hearing. A copy
of the order shall be served personally or by certified mail upon
the person to be removed.
(4) Upon receipt of an order of removal the { - board of
directors - } { + director or officer + } shall { - suspend
the person - } { + be suspended + } from office.
(5) The person suspended from office may appeal the order of
the director as a contested case under ORS 183.415 to 183.500.
(6) Upon expiration of the period in which to file an appeal
under ORS 183.415 to 183.500 or when the order of the director is
affirmed on appeal, the board of directors by resolution shall
remove the person from office and declare the office vacant.
(7) Any officer or director of a banking institution { - or
any resident officer, manager or agent of a foreign or
extranational institution - } who is suspended or removed under
this section shall not act in any official capacity, conduct any
of the business of the { + banking + } institution or have
access to the books, records or assets of the { + banking + }
institution as an officer, director { - , - } { + or + }
stockholder, { - resident officer, manager or agent, - }
without receiving permission from the director.
SECTION 102. ORS 707.720 is amended to read:
707.720. An officer or director of { - an - } { + a
banking + } institution shall not, as an officer or director,
willfully do any act which is expressly forbidden by the Bank Act
or omit to perform any duty imposed upon the officer or director
by the Bank Act.
SECTION 103. ORS 707.730 is amended to read:
707.730. Every official communication directed by the Director
of the Department of Consumer and Business Services or any
examiner to { - an - } { + a banking + } institution or to
any officer of
{ - an - } { + a banking + } institution, relating to an
investigation or examination conducted by the Department of
Consumer and Business Services or containing suggestions or
recommendations as to the conduct of the business of the
{ + banking + } institution, shall be submitted by the officer
receiving it to the board of directors at the next meeting of the
board and noted in the minutes of the meeting of the board in the
manner prescribed by the director.
SECTION 104. ORS 707.735 is amended to read:
707.735. (1) If an officer or director of { - an - } { + a
banking + } institution has reason to believe that a person has
violated any provision of { - the Bank Act - } { + law that
has resulted or could result in loss to the banking institution
and + } for which criminal prosecution is provided, the officer
or director shall give the information relative to the violation
to the appropriate federal, state or local law enforcement
officer having jurisdiction of the violation, and to the Director
of the Department of Consumer and Business Services.
(2) If the matter is referred to a district attorney or to the
Attorney General, such officer promptly shall investigate the
Enrolled Senate Bill 125 (SB 125-B) Page 56
violation and institute such action against the person as the
information and investigation requires or justifies. The cost of
the investigation and action shall be paid by the county or state
in the manner in which other criminal actions are paid.
SECTION 105. ORS 707.740 is amended to read:
707.740. { - (1) - } The board of directors of { - an - }
{ + a banking + } institution shall annually appoint an
examining { + or audit + } committee of not fewer than three
{ - stockholders - } { + 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
bank supervising authorities and report to the board of directors
within 60 days after receipt of the report relative to criticisms
and suggestions contained in the report and comment on any matter
relative to the affairs of the { + banking + } institution that
in its judgment should be known to the directors. The report
shall be recorded in the minute book of the { + banking + }
institution, and a certified copy transmitted to the director
within five days.
{ - (2) The director may accept the report of persons
appointed with the approval of the director in lieu of the report
to be made by the examining committee under subsection (1) of
this section. - }
SECTION 106. ORS 707.744 is amended to read:
707.744. As used in ORS 707.744 to 707.764:
(1) 'Director' means an individual who is or was a director of
{ - an - } { + a banking + } institution or an individual who,
while a director of { - an - } { + a banking + } institution,
is or was serving at the { + banking + } institution's request
as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise. A
director is considered to be serving an employee benefit plan at
the { + banking + } institution's request if the director's
duties to the { + banking + } institution also impose duties on
or otherwise involve services by the director to the plan or to
participants in or beneficiaries of the plan. ' Director'
includes, unless the context requires otherwise, the estate or
personal representative of a director.
(2) 'Expenses' includes counsel fees.
(3) ' { + Banking + } institution' includes any domestic or
foreign predecessor entity of { - an - } { + a banking + }
institution in a merger or other transaction in which the
predecessor's existence ceased upon the consummation of the
transaction.
(4) 'Liability' means the obligation to pay a judgment,
settlement, penalty or fine, including an excise tax assessed
with respect to an employee benefit plan or reasonable expenses
incurred with respect to a proceeding.
(5) 'Officer' means an individual who is or was an officer of
{ - an - } { + a banking + } institution or an individual who,
while an officer of { - an - } { + a banking + } institution,
is or was serving at the { + banking + } institution's request
as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise. An
officer is considered to be serving an employee benefit plan at
Enrolled Senate Bill 125 (SB 125-B) Page 57
the { + banking + } institution's request if the officer's
duties to the { + banking + } institution also impose duties on
or include services by the officer to the employee benefit plan
or to participants in or beneficiaries of the plan. 'Officer '
includes, unless the context requires otherwise, the estate or
personal representative of an officer.
(6) 'Party' includes an individual who was, is or is threatened
to be made a named defendant or respondent in a proceeding.
(7) 'Proceeding' means any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether formal or informal.
SECTION 107. ORS 707.746 is amended to read:
707.746. (1) Except as provided in subsection (4) of this
section, { - an - } { + a banking + } institution may
indemnify an individual made a party to a proceeding because the
individual is or was a director against liability incurred in the
proceeding if:
(a) The conduct of the individual was in good faith;
(b) The individual reasonably believed that the individual's
conduct was in the best interests of the { + banking + }
institution, or at least not opposed to its best interests; and
(c) In the case of any criminal proceeding, the individual had
no reasonable cause to believe the individual's conduct was
unlawful.
(2) A director's conduct with respect to an employee benefit
plan for a purpose the director reasonably believed to be in the
best interests of the participants in and beneficiaries of the
plan is conduct that satisfies the requirement of subsection
(1)(b) of this section.
(3) The termination of a proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent is not, of itself, determinative that the director did
not meet the standard of conduct described in this section.
(4) { - An - } { + A banking + } institution may not
indemnify a director under this section:
(a) In connection with a proceeding by or in the right of the
{ + banking + } institution in which the director was adjudged
liable to the { + banking + } institution; or
(b) In connection with any other proceeding charging improper
personal benefit to the director in which the director was
adjudged liable on the basis that personal benefit was improperly
received by the director.
(5) Indemnification permitted under this section in connection
with a proceeding by or in the right of the { + banking + }
institution is limited to reasonable expenses incurred in
connection with the proceeding.
SECTION 108. ORS 707.748 is amended to read:
707.748. Unless limited by its articles of incorporation,
{ - an - } { + a banking + } institution shall indemnify a
director who was wholly successful, on the merits or otherwise,
in the defense of any proceeding to which the director was a
party because of being a director of the { + banking + }
institution against reasonable expenses incurred by the director
in connection with the proceeding.
SECTION 109. ORS 707.752 is amended to read:
707.752. (1) { - An - } { + A banking + } institution may
pay for or reimburse the reasonable expenses incurred by a
director who is a party to a proceeding in advance of final
disposition of the proceeding if:
Enrolled Senate Bill 125 (SB 125-B) Page 58
(a) The director furnishes the { + banking + } institution a
written affirmation of the director's good faith belief that the
director has met the standard of conduct described in ORS
707.746; and
(b) The director furnishes the { + banking + } institution a
written undertaking, executed personally or on the director's
behalf, to repay the advance if it is ultimately determined that
the director did not meet the standard of conduct.
(2) The undertaking required by subsection (1)(b) of this
section must be an unlimited general obligation of the director
but need not be secured and may be accepted without reference to
financial ability to make repayment.
(3) Any authorization of payments under this section may be
made by provision in the articles of incorporation, or bylaws, by
a resolution of the shareholders or board of directors or by
contract.
SECTION 110. ORS 707.754 is amended to read:
707.754. Unless the { + banking + } institution's articles of
incorporation provide otherwise, a director of the
{ + banking + } institution who is a party to a proceeding may
apply for indemnification to the court conducting the proceeding
or to another court of competent jurisdiction. On receipt of an
application, the court, after giving any notice the court
considers necessary, may order indemnification if it determines:
(1) The director is entitled to mandatory indemnification under
ORS 707.748, in which case the court shall also order the { +
banking + } institution to pay the director's reasonable expenses
incurred to obtain court-ordered indemnification; or
(2) The director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances,
whether or not the director met the standard of conduct set forth
in ORS 707.746 or was adjudged liable as described in ORS 707.746
(4), whether the liability is based on a judgment, settlement or
proposed settlement or otherwise.
SECTION 111. ORS 707.756 is amended to read:
707.756. (1) { - An - } { + A banking + } institution may
not indemnify a director under ORS 707.746 unless authorized in
the specific case after a determination has been made that
indemnification of the director is permissible in the
circumstances because the director has met the standard of
conduct set forth in ORS 707.746.
(2) A determination that indemnification of a director is
permissible shall be made:
(a) By the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the
proceeding;
(b) If a quorum cannot be obtained under paragraph (a) of this
subsection, by a majority vote of a committee duly designated by
the board of directors consisting solely of two or more directors
not at the time parties to the proceeding. However, directors who
are parties to the proceeding may participate in designation of
the committee;
(c) By special legal counsel selected by the board of directors
or its committee in the manner prescribed in paragraph (a) or (b)
of this subsection, or if a quorum of the board of directors
cannot be obtained under paragraph (a) of this subsection and a
committee cannot be designated under paragraph (b) of this
subsection, the special legal counsel shall be selected by
majority vote of the full board of directors, including directors
who are parties to the proceeding; or
Enrolled Senate Bill 125 (SB 125-B) Page 59
(d) { + In the case of an institution or Oregon stock savings
bank, + } by the shareholders.
(3) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible, except
that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under
subsection (2)(c) of this section to select counsel.
SECTION 112. ORS 707.758 is amended to read:
707.758. Unless { - an - } { + a banking + } institution's
articles of incorporation provide otherwise:
(1) An officer of the { + banking + } institution is entitled
to mandatory indemnification under ORS 707.748 and is entitled to
apply for court-ordered indemnification under ORS 707.754, in
each case to the same extent as a director under ORS 707.748 and
707.754.
(2) The { + banking + } institution may indemnify and advance
expenses under ORS 707.744 to 707.762 to an officer, employee or
agent of the { + banking + } institution to the same extent as
to a director.
SECTION 113. ORS 707.762 is amended to read:
707.762. { - An - } { + A banking + } institution may
purchase and maintain insurance on behalf of an individual
against liability asserted against or incurred by the individual
who is or was a director, officer, employee or agent of the
{ + banking + } institution or who, while a director, officer,
employee or agent of the { + banking + } institution, is or was
serving at the request of the { + banking + } institution as a
director, officer, partner, trustee, employee or agent of another
foreign or domestic corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise. The
{ + banking + } institution may purchase and maintain the
insurance even if the { + banking + } institution has no power
to indemnify the individual against the same liability under ORS
707.746 or 707.748.
SECTION 114. ORS 707.764 is amended to read:
707.764. (1) The indemnification and provisions for advancement
of expenses provided by ORS 707.744 to 707.762 shall not be
deemed exclusive of any other rights to which directors,
officers, employees or agents may be entitled under the
{ + banking + } institution's articles of incorporation or
bylaws, any agreement, general or specific action of its board of
directors, vote of shareholders or otherwise, and shall continue
as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors
and administrators of such a person. Specifically and not by way
of limitation, { - an - } { + a banking + } institution shall
have the power to make or agree to make any further
indemnification, including advancement of expenses, of:
(a) Any director as authorized by the articles of
incorporation, any bylaws approved, adopted or ratified by the
shareholders or any resolution or agreement approved, adopted or
ratified, before or after such indemnification or agreement is
made, by the shareholders, provided that no such indemnification
shall indemnify any director from or on account of acts or
omissions for which liability could not be eliminated under ORS
707.110 (5)(c); and
(b) Any officer, employee or agent who is not a director as
authorized by its articles of incorporation or bylaws, general or
Enrolled Senate Bill 125 (SB 125-B) Page 60
specific action of its board of directors or agreement. Unless
the articles of incorporation, or any such bylaws, agreement or
resolution provide otherwise, any determination as to any further
indemnity under this paragraph shall be made in accordance with
ORS 707.756.
(2) If articles of incorporation limit indemnification or
advance of expenses, any indemnification and advance of expenses
are valid only to the extent consistent with the articles of
incorporation.
(3) ORS 707.744 to 707.762 do not limit { - an - } { + a
banking + } institution's power to pay or reimburse expenses
incurred by a director in connection with the director's
appearance as a witness in a proceeding at a time when the
director has not been made a named defendant or respondent to a
proceeding.
{ +
REGULATION OF INSTITUTIONS + }
{ +
(Powers of Institutions) + }
SECTION 115. { + Sections 116 to 202 of this Act are added to
and made a part of the Bank Act. + }
SECTION 116. { + Powers of institutions; insurance
transactions. (1) Except as otherwise limited in the Bank Act or
the articles of incorporation of an institution, an institution
shall have:
(a) Perpetual duration and succession in its corporate name,
unless a limited period of duration is stated in its articles of
incorporation;
(b) The power to do all things necessary or convenient to carry
out its business and affairs including, without limitation, the
power to:
(A) Sue and be sued and complain and defend in its corporate
name;
(B) Have a corporate seal, which may be altered at will, and
use it or a facsimile thereof by impressing, affixing or
reproducing it in any other manner;
(C) Make contracts, incur liabilities, borrow money, issue its
notes, bonds and other obligations that may be convertible into
other securities of the institution or include the option to
purchase other securities of the institution;
(D) Conduct its business, locate offices and exercise the
powers granted by the Bank Act within or without this state;
(E) Elect or appoint directors, officers, employees and agents
of the institution;
(F) Make and amend bylaws not inconsistent with its articles of
incorporation or with the laws of this state for managing the
business and regulating the affairs of the institution;
(G) Make donations for the public welfare or for charitable,
scientific or educational purposes;
(H) Transact any business permitted by the Bank Act; and
(I) Pay pensions and establish pension plans, and share option
plans and benefit or incentive plans for any or all of its
current or former directors, officers, employees and agents;
(c) The powers granted to institutions by the Bank Act;
(d) The power to be licensed under ORS 744.002 as an agent to
transact one or more of the classes of insurance described in ORS
744.115 except for title insurance; and
Enrolled Senate Bill 125 (SB 125-B) Page 61
(e) All powers necessary or convenient to effect any or all of
the purposes for which the institution is organized or to perform
any or all of the acts expressly or impliedly authorized or
required under the Bank Act.
(2) With respect to any exercise of the power granted under
subsection (1)(d) of this section, other than the licensing of
the institution to transact livestock insurance, mortgage
insurance, motor vehicle physical damage insurance, credit life
insurance, credit health insurance, credit involuntary
unemployment insurance, credit insurance or lender's property
insurance, as these classes of insurance are described in ORS
744.115:
(a) The conduct by the institution of insurance agency
activities shall be subject to the approval of the Director of
the Department of Consumer and Business Services. 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 insurance activity.
(b) The director may revoke or restrict the ongoing authority
of the institution to engage in the insurance agency activity if
the condition of the institution substantially deteriorates or if
the insurance activities are adversely affecting the institution.
(c) If the insurance agency activity is conducted in a branch
or office in which the institution carries on its banking
business, the insurance agency activity shall be physically
separated from those parts of the premises in which the
institution carries on the banking business.
(d) All persons who act on behalf of the institution to
transact insurance, as that term is defined in ORS 731.146, other
than to transact livestock insurance, mortgage insurance, motor
vehicle physical damage insurance, credit life insurance, credit
health insurance, credit involuntary unemployment insurance,
credit insurance or lender's property insurance, as these classes
of insurance are described in ORS 744.115, shall be engaged only
in the insurance agency activity and shall not in any manner
perform any other work for the institution.
(e) Prior to selling any policy of insurance, the institution
shall disclose in writing to the purchaser that the purchaser
shall not be required to purchase the insurance from the
institution as a condition of obtaining any service from or
engaging in any transaction with the institution.
(f) The institution shall file a written report with the
director no later than March 31 of each year disclosing the
insurance activities of the institution. The required contents of
the report shall be established by the director by rule. Reports
filed with the director under this paragraph shall be available
for public inspection in the office of the director.
(3) An institution licensed to transact insurance shall not in
any manner use customer information obtained from another
insurance agent to promote, develop or solicit insurance business
for the institution unless the other insurance agent consents to
such use of the customer information. + }
SECTION 117. { + Investments and activities of Oregon
commercial banks. (1) Notwithstanding any provision of the Bank
Act to the contrary, Oregon commercial banks are authorized to:
(a) Engage as principal in those activities in which national
banks may engage as principal and acquire and retain those
investments that national banks may acquire and retain, subject
to conditions and restrictions that apply to national banks; and
Enrolled Senate Bill 125 (SB 125-B) Page 62
(b) Engage as principal in those activities and acquire and
retain those investments that are permissible for state chartered
banks under 12 C.F.R. 362.3(b) and 12 C.F.R. 362.4(c), subject to
conditions and restrictions provided in 12 U.S.C. 1831a, 12
C.F.R. 362, and other applicable federal law.
(2) Notwithstanding any provision of the Bank Act to the
contrary, subsidiaries of Oregon commercial banks are authorized
to:
(a) Engage as principal in those activities in which
subsidiaries of national banks may engage as principal and
acquire and retain those investments that subsidiaries of
national banks may acquire and retain, subject to conditions and
restrictions that apply to subsidiaries of national banks; and
(b) Engage as principal in those activities and acquire and
retain those investments that are permissible for subsidiaries of
state chartered bank subsidiaries under 12 C.F.R. 362.3(b) and 12
C.F.R. 362.4(c), subject to conditions and restrictions provided
in 12 U.S.C. 1831a, 12 C.F.R. 362, and other applicable federal
law.
(3) Activities and investments referred to in subsections (1)
and (2) of this section that require notice to or approval of the
Comptroller of the Currency shall not require such notice or
approval but shall require notice to or approval of the Director
of the Department of Consumer and Business Services. For purposes
of this section, references in federal statutes, regulations and
other authorities that prescribe the permissible activities and
investments of national banks and subsidiaries of national banks
shall be deemed whenever practicable to refer to comparable
provisions of Oregon law. The director may approve an activity or
investment that requires director approval, subject to such
conditions as the director deems appropriate.
(4) The purpose of this section is to grant Oregon commercial
banks and their subsidiaries all investment and activity power
and authority, as principal, permitted state chartered banks
under federal law. + }
SECTION 118. { + Investment in government obligations. (1)
Institutions may invest, without regard to any limitation based
on capital and surplus, in:
(a) Obligations of the United States, including those of its
agencies and instrumentalities;
(b) Obligations of public housing agencies issued pursuant to
the United States Housing Act of 1937, as amended; and
(c) Obligations of the State of Oregon or any county, city,
school district, port district or other public body with the
power to levy taxes issued pursuant to the Constitution or
statutes of the State of Oregon or the charter or ordinances of
any county or city within the State of Oregon, if the issuing
body has not been in default with respect to the payment of
principal or interest on any of its obligations within five years
preceding the date of the investment.
(2) Subject to a limitation of 20 percent of capital and
surplus, institutions may invest in obligations of any other
state of the United States or obligations of any out-of-state
county, city, school district, port district or other public body
in the United States payable from ad valorem taxes, if the
obligations are rated in one of the four highest grades by a
recognized investment service organization that has been engaged
regularly and continuously for a period of not less than 10 years
in rating state and municipal obligations.
Enrolled Senate Bill 125 (SB 125-B) Page 63
(3) Obligations received in satisfaction of debts previously
contracted in good faith are not subject to the capital
limitations of this section, if the book value of such
obligations in excess of the limitations of this section is
reduced to the amount allowed under this section within six
months after the date the obligations are acquired. + }
SECTION 119. { + Investment in stock of other
corporations. + } { + (1) An institution shall not invest any of
its assets in the capital stock of any other corporation, except:
(a) In the capital stock of the Federal Reserve Bank.
(b) In stock acquired or purchased to save a loss on a
preexisting debt. The stock shall be sold within two years of the
date acquired or purchased. 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 of any safe deposit company doing an
exclusive safe deposit business on premises owned or leased by
the institution upon 30 days' advance notice to the director
subject to the same limitations applicable to a national bank.
(d) In the capital stock of agricultural and livestock finance
companies, subject to the same limitations applicable to national
banks and to the approval of the director.
(e) In the capital stock, eligible for purchase by national
banks, of small business investment companies, but the aggregate
investment in the stock shall not exceed two percent of the
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 bank service corporations as
provided in sections 121 to 124 of this 1997 Act.
(j) In the capital stock of a community development corporation
as provided in section 125 of this 1997 Act.
(k) If a trust company is not engaged in a banking business and
if the investment is first approved by the director, the trust
company may invest an amount not to exceed 20 percent of the
capital of the trust company:
(A) In the capital stock of a subsidiary investment company
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 an
investment adviser, as defined in ORS 59.015, with all the powers
customarily exercised by an investment adviser.
(L) In adjustable rate preferred stock of the Student Loan
Marketing Association established in 20 U.S.C. 1087-2, but the
aggregate investment in the stock shall not exceed 15 percent of
the capital of the institution.
(m) In the capital stock of a company acquired for the purpose
of strengthening the institution's capital structure or the
elimination of undesirable assets as provided in section 120 of
this 1997 Act.
(n) In the capital stock of banks and corporations engaged in
international or foreign banking or foreign banking in a
dependency or insular possession of the United States, as
provided in section 126 of this 1997 Act.
Enrolled Senate Bill 125 (SB 125-B) Page 64
(o) In the capital stock of a corporation created to establish
ATMs as provided in section 127 of this 1997 Act.
(2) An institution may invest its assets in shares of any
mutual fund, the assets of which are invested solely in
obligations of the type described in and limited under section
118 of this 1997 Act.
(3) An institution may, subject to the approval of the
director, acquire or continue to hold the fully paid stock of a
corporation, 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 the purpose of which is to permit the
institution to engage in any business in which a bank holding
company or a nonbank subsidiary of 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, except qualifying shares of
directors.
(5) An institution may, subject to the approval of the director
and to rules promulgated by the director, acquire and continue to
hold at least 80 percent of the fully paid stock of a corporation
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 approval of the director
and under rules promulgated by the director, acquire and continue
to hold all the fully paid stock of a subsidiary corporation
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
in any one fiscal year. Except as otherwise permitted by statute
or rule, the investment limitations applicable to the institution
apply to the subsidiary. Acquisitions under this subsection shall
not exceed 15 percent of the capital of the institution.
(7) An institution may acquire and hold all or part of the
stock of a corporation that is or may thereafter be licensed
under ORS 744.002 as an agent to transact one or more of the
classes of insurance described in ORS 744.115, except for title
insurance, subject to the following requirements:
(a) The acquisition and holding of such stock shall be subject
to the 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.
(b) The director may revoke or restrict the ongoing authority
of the institution to hold stock in the corporation if the
condition of the institution substantially deteriorates or if the
insurance activities are adversely affecting the institution.
(c) If the corporation conducts the insurance agency activity
in a branch or office in which the institution carries on its
banking business, the insurance agency activity shall be
physically separated from those parts of the premises in which
the institution carries on the banking business.
(d) All persons who act on behalf of the corporation to
transact insurance, as that term is defined in ORS 731.146, shall
be employees of the corporation only and shall not, while
Enrolled Senate Bill 125 (SB 125-B) Page 65
employed by the corporation, be in any manner employed or
compensated by or perform any work for the institution.
(e) The name of the corporation and any assumed business name
used by it shall not be identical to that of the institution.
(f) Prior to selling any policy of insurance, the corporation
shall disclose in writing to the purchaser that the corporation
is owned in whole or part by the institution and that the
purchaser shall not be required to purchase the insurance from
the corporation as a condition of obtaining any service from or
engaging in any transaction with the institution.
(g) For each calendar year during which an institution owns all
or part of any corporation licensed under ORS 744.002 as an
agent, the institution shall file a written report with the
director. The report shall be filed no later than March 31 of the
following year and shall disclose the insurance activities of the
corporation. The required contents of the report shall be
established by the director by rule. The reports filed with the
director under this paragraph shall be available for public
inspection in the office of the director.
(h) The corporation shall not in any manner use customer
information obtained by the institution from another insurance
agent to promote, develop or solicit insurance business for the
corporation unless the other insurance agent consents to such use
of the customer information.
(i) The corporation shall be subject to the limitations
applicable to lending institutions under ORS 746.180 and 746.185
to 746.211. For the purpose of this paragraph, the term 'lending
institution' has the meaning set forth in ORS 746.185.
(8) An institution may invest up to 15 percent of its capital
in the stock of the Oregon Capital Corporation authorized to be
created under ORS 284.750 to 284.795, 315.504, 317.084, 317.267
and 318.031. + }
SECTION 120. { + Stock in corporations acquired to strengthen
capital or eliminate undesirable assets. (1) Upon the written
application of the board of directors filed with the Director of
the Department of Consumer and Business Services and subject to
the written approval of the director and any limitations the
director may prescribe, an institution may carry fully paid and
nonassessable capital stock of any other corporation as an asset,
if the stock is acquired for the purpose of strengthening the
institution's capital structure or the elimination of undesirable
assets.
(2) The stock may be held for such period as the director may
determine, but in no event longer than 15 years.
(3) This section is not applicable to any stock that may be
acquired in connection with the insurance of deposits, any stock
that may be acquired under section 119 of this 1997 Act, or any
stock that may be purchased as a part of any transaction in which
an institution borrows from the United States or an agency of the
United States. This section does not repeal or in any way limit
or modify ORS 711.470. + }
SECTION 121. { + Definition for sections 122 to 124 of this
Act. As used in sections 122 to 124 of this 1997 Act, unless the
context requires otherwise, 'invest' includes any advance of
funds to a bank service corporation, whether by the purchase of
stock, the making of a loan or otherwise, but does not include a
payment for rent earned, goods sold and delivered or services
rendered prior to the making of the payment. + }
SECTION 122. { + Investment in bank service corporation. An
Oregon commercial bank may invest not more than 10 percent of its
Enrolled Senate Bill 125 (SB 125-B) Page 66
capital in a bank service corporation. An Oregon commercial bank
shall not invest more than five percent of its total assets in a
bank service corporation. + }
SECTION 123. { + Discrimination by bank service corporation
prohibited against nonstockholding depository institution;
permitted conduct. A bank service corporation shall not
unreasonably discriminate in the provision of any services
authorized under sections 121 to 124 of this 1997 Act against any
financial institution that does not own stock in the bank service
corporation on the basis of the fact that the nonstockholding
financial institution is in competition with a financial
institution that owns stock in the bank service corporation,
except that:
(1) It shall not be considered unreasonable discrimination for
a bank service corporation, at its option, to either:
(a) Provide services to nonstockholding financial institutions
only at a price that fully reflects all of the costs of offering
those services, including the cost of capital and a reasonable
return thereon; or
(b) If an Oregon commercial bank is authorized under section
122 of this 1997 Act to invest in a bank service corporation, the
bank service corporation may require that the Oregon commercial
bank invest in the stock of the bank service corporation, in
which case the bank service corporation shall provide services to
the Oregon commercial bank on the same basis as for other
stockholder financial institutions of the bank service
corporation.
(2) A bank service corporation may refuse to provide services
to a nonstockholding financial institution if comparable services
are available from another source at competitive overall costs,
or if the providing of services would be beyond the practical
capacity of the bank service corporation. + }
SECTION 124. { + Authorized services of bank service
corporations; sale of insurance; regulation of services. (1) A
bank service corporation may perform any of the following
services for financial institutions:
(a) Check and deposit sorting and posting;
(b) Computation and posting of interest and other credits and
charges;
(c) Preparation and mailing of checks, statements, notices and
similar items; or
(d) Any other clerical, bookkeeping, accounting, statistical or
similar functions performed for a financial institution.
(2) In addition to the services that may be performed by a bank
service corporation for financial institutions under subsection
(1) of this section, a bank service corporation:
(a) May perform for any person any service that may lawfully be
performed by all shareholders of the bank service corporation, or
by any holding company or subsidiary of any such shareholder,
except that a bank service corporation shall not take deposits.
(b) With respect to the sale of insurance, shall be subject to
the limitations applicable to lending institutions under ORS
746.180 and 746.185 to 746.211. For the purpose of this
paragraph, the term 'lending institution' has the meaning set
forth in ORS 746.185.
(3) A banking institution may not cause to be performed, by
contract or otherwise, any of the services described in
subsection (1) of this section for itself, whether on or off its
premises, unless assurances satisfactory to the Director of the
Department of Consumer and Business Services are furnished to the
Enrolled Senate Bill 125 (SB 125-B) Page 67
director by both the banking institution and the person
performing the services that the performance of the services will
be subject to regulation and examination by the director to the
same extent as if the services were performed by the banking
institution itself on its own premises.
(4) The director may regulate and examine the performance of
the services described in subsection (1) of this section for
financial institutions, and may regulate and examine the
performance by bank service corporations of the services
described in subsection (2) of this section. + }
SECTION 125. { + Community development corporations; authority
to invest or organize; conditions; corporate form; functions. (1)
As provided in this section:
(a) A banking institution may invest its capital in a community
development corporation.
(b) A banking institution may organize a community development
corporation as a wholly owned subsidiary of the banking
institution and invest its capital in the corporation.
(2) A banking institution may invest in or organize and invest
in a community development corporation under subsection (1) of
this section, if the following conditions are satisfied:
(a) The projects undertaken by the community development
corporation must be predominantly of a civic, community or public
nature, and not merely of a private or entrepreneurial nature.
(b) The banking institution's aggregate investment in community
development corporations and their projects must not exceed two
percent of its capital for any project and five percent of its
capital for all projects, or 10 percent of its capital for all
projects with the approval of the Director of the Department of
Consumer and Business Services.
(c) The banking institution must submit to the director its
proposal for investing in or organizing and investing in a
community development corporation and the proposal must receive
the director's approval.
(d) The membership of the board of directors of the community
development corporation must be representative of the community
in which the corporation is to operate.
(3) A community development corporation may be organized as a
for-profit corporation under ORS chapter 60 or as a nonprofit
corporation under the Oregon Nonprofit Corporation Law. A
community development corporation must be authorized under its
articles of incorporation or applicable law to:
(a) Acquire real estate. This paragraph does not authorize real
estate investment that is primarily speculative in nature.
(b) Make equity investments in small businesses and in
development projects that primarily benefit small businesses.
(c) Participate in joint ventures with outside partners.
(4) A banking institution wishing to invest in or organize and
invest in a community development corporation shall submit to the
director, on an application form designed by the director, a
proposal that describes in detail the nature and scope of
development activities the community development corporation
intends to undertake.
(5) The director may submit an application to any appropriate
state agency or city, county or other local government for its
advice and assistance on determining the need and practicability
of the projects proposed in the application. + }
SECTION 126. { + Investment in foreign banks. (1) Upon the
approval of the Director of the Department of Consumer and
Business Services and subject to rules promulgated by the
Enrolled Senate Bill 125 (SB 125-B) Page 68
director pursuant to ORS 183.310, 183.315, 183.330, 183.335 and
183.341 to 183.410, an institution may invest an amount not
exceeding in the aggregate 10 percent of its paid-in capital and
surplus in the stock of banks or corporations chartered or
incorporated under the laws of the United States or of any other
state. Such banks or corporations shall be principally engaged in
international or foreign banking, or banking in a dependency or
insular possession of the United States, either directly or
through the agency, ownership or control of local institutions in
foreign countries, or in such dependencies or insular
possessions, including the stock of one or more banks or
corporations chartered or incorporated under section 25(a) of the
Federal Reserve Act, as approved December 24, 1919.
(2) An institution shall file with the director an application
for permission to exercise the powers established in subsection
(1) of this section. The application shall specify the name,
capital and surplus of the institution filing it, the powers
applied for and the place or places where the banking operations
are to be carried on.
(3) The director may approve or reject the application, in
whole or in part, if the granting of the application is
considered inexpedient. The director may increase or decrease the
number of places where the banking operations may be carried on.
(4) Before an institution may purchase stock in any corporation
mentioned in subsection (1) of this section, the corporation
shall agree to restrict its operations or conduct its business in
the manner and under the limitations prescribed by the director
for the places in which the business is to be conducted.
(5) If the director determines that the limitations prescribed
are not being complied with, the director may investigate the
matter. If the investigation shows that the corporation, or the
institution holding stock in the corporation, has not complied
with the limitations, the director may require the institution to
dispose of stock holdings in the corporation.
(6) An institution investing in the capital stock of banks or
corporations, as provided in subsection (1) of this section,
shall furnish information concerning the condition of the banks
or corporations to the director upon demand, and the director may
order special examinations of the banks or corporations. + }
SECTION 127. { + Corporation created to establish ATMs;
banking institution as stockholder. A banking institution may,
subject to the approval of the Director of the Department of
Consumer and Business Services, acquire and continue to hold a
membership in or the fully paid stock of a corporation created to
establish and operate ATM facilities. + }
SECTION 128. { + Membership in Federal Reserve System; member
bank, officers, directors and shareholders subject to duties and
liabilities imposed by laws of this state. (1) Any Oregon
commercial bank may subscribe to the capital stock and become a
member of a Federal Reserve Bank.
(2) An Oregon commercial bank that is a member of a Federal
Reserve Bank is subject to supervision and examination required
by the laws of this state. The Federal Reserve Board may also
examine such Oregon commercial banks. The authorities of this
state having supervisory authority over an Oregon commercial bank
may disclose to the Federal Reserve Board, or to examiners
appointed by it, all information in reference to the affairs of
any Oregon commercial bank that has become, or desires to become,
a member of a Federal Reserve Bank.
Enrolled Senate Bill 125 (SB 125-B) Page 69
(3) An Oregon commercial bank that is a member bank and its
directors, principal officers and stockholders are subject to all
liabilities and duties imposed upon them by the laws of this
state. + }
SECTION 129. { + Securities powers. An institution may, with
the approval of the Director of the Department of Consumer and
Business Services, purchase, sell, issue, underwrite and deal in
securities to the same extent national banks may do so. + }
{ + NOTE: + } Section 130 was deleted by amendment.
Subsequent sections were not renumbered.
SECTION 131. { + Real and personal property, right to
purchase, hold and dispose of. An institution may purchase, hold,
convey, sell or lease:
(1) The real estate and improvements thereto in which the
business of the institution is carried on, including, with its
offices, other space in the same building to rent as a source of
income.
(2) Furniture, fixtures, vaults, safe deposit boxes and other
personal property necessary or convenient to carrying on the
business of the institution.
(3) Real or personal property purchased by or conveyed to the
institution in satisfaction of or on account of debts previously
contracted in the course of its business, or otherwise acquired
in the course of collecting debts.
(4) Real estate purchased at execution sale or under a decree
conducted or issued by or on behalf of the institution.
(5) Real estate conveyed to the institution in connection with
its purchase of a bona fide contract of sale covering the real
estate conveyed.
(6) Real estate purchased with the approval of the Director of
the Department of Consumer and Business Services for the purpose
of future location or expansion of the business of the
institution.
(7) Real estate held in trust and real estate purchased with
assets other than those of the institution. + }
SECTION 132. { + Acquisition of personal property for leasing
purposes. An Oregon commercial bank may acquire and lease
personal property at the request of a lessee who wishes to lease
it upon terms requiring payment, during the minimum period of the
lease, of rents which exceed the total expenditures by the Oregon
commercial bank in the acquisition, ownership, financing and
protection of the property. Rents may include residual values,
the payment of which is guaranteed by a responsible third
party. + }
SECTION 133. { + Purchase of real estate contracts.
Institutions may purchase the vendor's interest in bona fide
contracts covering the sale of real estate that comply with the
requirements of section 142 of this 1997 Act. + }
SECTION 134. { + Acceptance of drafts and bills of exchange;
issuance of letters of credit; obligation for participation share
in bills. (1) An Oregon commercial bank may accept drafts or
bills of exchange drawn upon it having not more than six months'
sight to run, exclusive of days of grace, that grow out of
transactions involving the importation or exportation of goods,
or that grow out of the domestic shipment of goods, or that are
secured at the time of acceptance by a warehouse receipt or other
such document conveying or securing title covering readily
marketable staples.
(2) An Oregon commercial bank shall not accept drafts or bills
of exchange or issue letters of credit, whether in a foreign or
Enrolled Senate Bill 125 (SB 125-B) Page 70
domestic transaction, for any one person to an amount equal at
any one time in the aggregate to more than 20 percent of its
capital, unless the Oregon commercial bank is fully secured
either by attached documents or by some other actual security
growing out of the same transaction as the acceptance or letter
of credit.
(3) Except as provided in subsection (5) of this section, an
Oregon commercial bank shall not accept bills or issue letters of
credit, or be obligated for a participation share in bills, to an
amount equal at any time in the aggregate to more than 150
percent of its capital. The aggregate of acceptances or bills,
including obligations for a participation share in such
acceptances, growing out of domestic transactions shall not
exceed 50 percent of the aggregate of all acceptances, including
obligations for a participation share in such acceptances,
authorized for the Oregon commercial bank under this section.
(4) An Oregon commercial bank may accept drafts or bills of
exchange drawn upon it having not more than six months' sight to
run, exclusive of days of grace, drawn under rules prescribed by
the Director of the Department of Consumer and Business Services
or bankers in foreign countries or dependencies or insular
possessions of the United States for the purpose of furnishing
dollar exchange, as required by the usages of trade in the
respective countries, dependencies or insular possessions. An
Oregon commercial bank shall not accept the drafts or bills of
exchange for any one bank to any amount exceeding in the
aggregate 20 percent of the capital of the accepting Oregon
commercial bank, unless the draft or bill of exchange is
accompanied by documents conveying or securing the title or by
some other adequate security. An Oregon commercial bank shall not
accept the drafts or bills of exchange in an amount exceeding at
any time the aggregate of its capital.
(5) The director, under such conditions as the director may
prescribe, may authorize, by rule or order, any Oregon commercial
bank to accept bills and issue letters of credit, or be obligated
for a participation share in bills, in an amount not exceeding at
any time in the aggregate 200 percent of its capital. + }
SECTION 135. { + Disposition of real and personal property.
(1) An institution shall promptly dispose of all real and
personal property that the institution is not authorized to own
or hold under the Bank Act.
(2) All real estate acquired by an institution pursuant to
section 131 (3) and (4) of this 1997 Act shall be sold or
exchanged for other real estate within 15 years after title has
vested in it, unless the time is extended by the Director of the
Department of Consumer and Business Services. Title is deemed
vested for purposes of this section on the date the institution
is first entitled to receive a deed to the real estate. Real
estate may not be exchanged for other real estate without the
prior written consent of the director. An institution may hold
real estate taken in exchange for other real estate for such
period of time as the director may fix, not to exceed 15 years
from the date of the exchange.
(3) All personal property acquired by an institution pursuant
to section 131 (3) of this 1997 Act shall be promptly disposed
of. + }
SECTION 136. { + Authority to act as insurer. Nothing in ORS
715.075, 716.594, 716.610, 744.066, 744.115, 746.195 and 746.211
and sections 116 and 117 of this 1997 Act shall be construed to
permit a banking institution, a bank holding company or any
Enrolled Senate Bill 125 (SB 125-B) Page 71
subsidiary of a banking institution or bank holding company to
act as insurer, as defined in ORS 731.106. + }
SECTION 137. { + Challenge to validity of institution action;
prohibition; exceptions. (1) Except as provided in subsection (2)
of this section, the validity of an institution's action may not
be challenged on the grounds that the institution lacks or lacked
power to act.
(2) An institution's power to act may be challenged:
(a) In a proceeding by a stockholder against the institution to
enjoin the act;
(b) In a proceeding by the institution, directly, derivatively
or through a receiver, trustee or other legal representative,
against an incumbent or former director, officer, employee or
agent of the institution; or
(c) By the Director of the Department of Consumer and Business
Services.
(3) In a stockholder's proceeding under subsection (2)(a) of
this section to enjoin an unauthorized act, the court may enjoin
or set aside the act if equitable and if all affected persons are
parties to the proceeding, and may award damages for loss other
than anticipated profits suffered by the institution or another
party because of enjoining the unauthorized act. + }
{ +
(Loans Generally) + }
SECTION 138. { + Lending money. Except as specifically limited
by the Bank Act and other applicable law, institutions have the
general power to loan money upon terms and conditions that are
consistent with safe and sound banking practices. + }
SECTION 139. { + Interest rates on loans by financial
institutions; penalty for late payment. (1) Except as otherwise
provided in this section, there is no limitation on the rate of
interest or on the amount of other charges that a financial
institution may contract for and receive for a loan or use of
money.
(2) If a loan made by a financial institution is repaid before
maturity, the unearned portion of the charges, if any, shall be
refunded or credited to the borrower as provided in this
subsection. The amount of the refund shall not be less than the
total interest contracted for to maturity, less the greater of:
(a) Ten percent of the amount financed, or $75, whichever is
less; or
(b) The interest earned to the installment due date nearest the
date of prepayment, computed by applying the simple interest rate
of the loan to the actual principal balances outstanding, for the
periods of time the balances were actually outstanding. For
purposes of rebate computations under this paragraph, the
installment due date preceding the date of prepayment shall be
considered to be nearest if prepayment occurs 15 days or less
after that installment date. If prepayment occurs more than 15
days after the preceding installment due date, the next
succeeding installment due date shall be considered to be nearest
the date of prepayment. In determining the simple interest rate,
the lender may apply to the scheduled payments the actuarial
method, by which each scheduled payment is applied first to
accrued and unpaid interest and any amount remaining is applied
to reduction of the principal balance.
(3) Any installment of an installment loan or payment under an
open-end credit arrangement that is not paid when due shall
Enrolled Senate Bill 125 (SB 125-B) Page 72
continue to bear interest until paid. In addition, if the
installment or payment is not paid when due, the installment or
payment may bear a late charge of not greater than five percent
of the amount of the installment or payment, or $10, whichever is
more. However, except for loans secured by real property, the
lender may impose a late charge only if:
(a) The installment or payment is not received by the lender
within 15 days after the due date or, if the 15-day period
expires on a Saturday, Sunday or legal holiday, by the end of the
next business day;
(b) The loan agreement or open-end credit arrangement provides
for a late charge upon delinquent installments or payments; and
(c) A monthly billing, coupon or notice is provided by the
lender disclosing the date on which installments or payments are
due and that a late charge may be imposed if payment is not
received by the lender within 15 days thereafter. However, if the
lender and the borrower have provided in the note or other
written loan agreement that the payments on the loan shall be
made by the means of automatic deductions from a deposit account
maintained by the borrower, the lender shall not be required to
provide the borrower with a monthly billing, coupon or notice
under this paragraph with respect to any occasion on which there
are insufficient funds in the borrower's account to cover the
amount of a loan payment on the date the loan payment becomes due
and within the period described in paragraph (a) of this
subsection. + }
SECTION 139a. { + If Senate Bill 674 becomes law, sections 1
(amending ORS 708.480) and 2, chapter ___, Oregon Laws 1997
(Enrolled Senate Bill 674), are repealed and section 139 of this
Act is amended to read: + }
{ + Sec. 139. + } (1) Except as otherwise provided in this
section, there is no limitation on the rate of interest or on the
amount of other charges that a financial institution may contract
for and receive for a loan or use of money.
(2) If a loan made by a financial institution is repaid before
maturity, the unearned portion of the charges, if any, shall be
refunded or credited to the borrower as provided in this
subsection. The amount of the refund shall not be less than the
total interest contracted for to maturity, less the greater of:
(a) Ten percent of the amount financed, or $75, whichever is
less; or
(b) The interest earned to the installment due date nearest the
date of prepayment, computed by applying the simple interest rate
of the loan to the actual principal balances outstanding, for the
periods of time the balances were actually outstanding. For
purposes of rebate computations under this paragraph, the
installment due date preceding the date of prepayment shall be
considered to be nearest if prepayment occurs 15 days or less
after that installment date. If prepayment occurs more than 15
days after the preceding installment due date, the next
succeeding installment due date shall be considered to be nearest
the date of prepayment. In determining the simple interest rate,
the lender may apply to the scheduled payments the actuarial
method, by which each scheduled payment is applied first to
accrued and unpaid interest and any amount remaining is applied
to reduction of the principal balance.
(3) Any installment of an installment loan or payment under an
open-end credit arrangement that is not paid when due shall
continue to bear interest until paid. In addition, if the
installment or payment is not paid when due, the installment or
Enrolled Senate Bill 125 (SB 125-B) Page 73
payment may bear a late charge { - of not greater than five
percent of the amount of the installment or payment, or $10,
whichever is more - } { + in such amount as is agreed to by the
lender and the borrower + }. However, except for loans secured by
real property, the lender may impose a late charge only if:
(a) The installment or payment is not received by the lender
within { - 15 - } { + 10 + } days after the due date
{ - or, if the 15-day period expires on a Saturday, Sunday or
legal holiday, by the end of the next business day - } ;
(b) The loan agreement or open-end credit arrangement provides
for a late charge upon delinquent installments or payments; and
(c) A monthly billing, coupon or notice is provided by the
lender disclosing the date on which installments or payments are
due and that a late charge may be imposed if payment is not
received by the lender within { - 15 - } { + 10 + } days
thereafter. However, if the lender and the borrower have provided
in the note or other written loan agreement that the payments on
the loan shall be made by the means of automatic deductions from
a deposit account maintained by the borrower, the lender shall
not be required to provide the borrower with a monthly billing,
coupon or notice under this paragraph with respect to any
occasion on which there are insufficient funds in the borrower's
account to cover the amount of a loan payment on the date the
loan payment becomes due and within the period described in
paragraph (a) of this subsection.
SECTION 139b. { + The amendments to section 139 of this 1997
Act by section 139a of this 1997 Act apply to loans, credit
arrangements or agreements agreed to by the lender and the
borrower on or after the effective date of this 1997 Act. + }
SECTION 140. { + Accepting own stock as collateral prohibited;
exception. An institution shall not accept as collateral its own
capital stock, except where the taking of such collateral is
necessary to prevent loss upon an indebtedness previously
contracted in good faith. If such indebtedness is not paid in
full within six months from the date such stock was taken as
collateral, the stock shall be promptly sold by the
institution. + }
SECTION 141. { + Accepting stock of other institutions as
collateral. An institution shall not accept or hold as loan
collateral in the aggregate more than 25 percent of the capital
stock of any other insured stock institution. + }
SECTION 142. { + Real estate loans. (1) With respect to any
loans secured primarily by real estate, an Oregon commercial bank
shall maintain a file containing such appraisal, evidence of
merchantable title and insurance as may be required by the
Director of the Department of Consumer and Business Services.
(2) All loans made by an Oregon commercial bank to finance the
construction of buildings and the improvements appurtenant
thereto shall be subject to such requirements as the director may
determine. + }
{ +
(Loan and Other Obligation Limits) + }
SECTION 143. { + ' Capital' defined for sections 143 to 160
of this Act. As used in sections 143 to 160 of this 1997 Act, the
term 'capital,' when referring to an Oregon commercial bank,
means tier 1 and tier 2 capital, as defined under the federal
risk-based capital guidelines of the appropriate federal banking
agency and issued under 12 U.S.C. 1813, plus the balance of
Enrolled Senate Bill 125 (SB 125-B) Page 74
allowance for loan and lease losses excluded from tier 2 capital.
The amounts described in this section shall be determined from
the most recent consolidated report of condition and income filed
under 12 U.S.C. 1817(a)(3). + }
SECTION 144. { + Limitations on amount of obligations to
Oregon commercial bank; applicability. Except as provided in
sections 145 to 160 of this 1997 Act, the loans and other
obligations of a person to an Oregon commercial bank outstanding
at any time shall not exceed 15 percent of the Oregon commercial
bank's capital. Any loan made or other obligation acquired in
accordance with sections 145 to 160 of this 1997 Act shall be in
addition to and shall not be applied against the 15 percent
limitation. Any loan made or obligation acquired that complies
with sections 143 to 160 of this 1997 Act when made or acquired
shall not be considered out of compliance on account of a
subsequent decline in the capital of the Oregon commercial bank.
Obligations in the name of one person for the benefit of another
person shall be considered obligations of both the named person
and the benefited person. + }
SECTION 145. { + Obligations secured by readily marketable
collateral. In addition to obligations permitted under section
144 of this 1997 Act, an Oregon commercial bank may make loans to
or acquire other obligations of a person, not to exceed 10
percent of its capital, if:
(1) The loans or obligations are fully secured by readily
marketable collateral having a market value that may be
determined by reliable and continuously available price
quotations;
(2) The market value is at least 15 percent greater than the
amount of the obligation at the time it is incurred; and
(3) The market value is at all times while the obligation is
outstanding at least 100 percent of the balance of principal,
interest and other charges applicable to the obligation. + }
SECTION 146. { + Obligations of other financial institutions.
In addition to obligations permitted under section 144 of this
1997 Act, an Oregon commercial bank may acquire obligations of
other financial institutions without regard to amount in the form
of time or demand deposits that it places with such other
financial institutions. + }
SECTION 147. { + Obligations of indorser of discounted
commercial paper. (1) In addition to obligations permitted under
section 144 of this 1997 Act, an Oregon commercial bank may
acquire obligations of a person without regard to amount as an
indorser, arising out of the discount of commercial or business
paper owned by the person negotiating the paper.
(2) As used in this section, 'commercial or business paper '
means negotiable notes, drafts, acceptances or bills of exchange
having a maturity of not more than six months, that have been
given by one person to another in settlement of a commercial or
business transaction involving the purchase of goods, and upon
which both parties to the transaction are liable either as maker,
drawer, acceptor or indorser. + }
SECTION 148. { + Noncommercial short-term notes. In addition
to obligations permitted under section 144 of this 1997 Act, an
Oregon commercial bank may acquire obligations of a person, not
to exceed 15 percent of the bank's capital, as an indorser or
guarantor of notes, other than commercial or business paper
excepted under section 147 of this 1997 Act, having a maturity of
not more than six months, and owned by the person indorsing and
negotiating the same. + }
Enrolled Senate Bill 125 (SB 125-B) Page 75
SECTION 149. { + Obligations secured by shipping documents. In
addition to obligations permitted under section 144 of this 1997
Act, an Oregon commercial bank may make loans to or acquire other
obligations of a person without regard to amount, provided the
obligations are fully secured by shipping documents conveying or
securing title to goods or commodities in process of
shipment. + }
SECTION 150. { + Installment consumer paper. (1) In addition
to obligations permitted under section 144 of this 1997 Act, an
Oregon commercial bank may acquire obligations of a person, not
to exceed 25 percent of the Oregon commercial bank's capital, as
an indorser or guarantor of negotiable or nonnegotiable
installment consumer paper that carries a full or partial
recourse indorsement or unconditional guarantee by the person
transferring the obligation and conforms to rules prescribed by
the Director of the Department of Consumer and Business Services.
(2) The 25 percent limitation of subsection (1) of this section
does not apply to the extent the Oregon commercial bank relies
primarily on the obligors on the consumer paper for the payment
of the consumer paper, the Oregon commercial bank has reasonably
adequate knowledge of the financial condition of the obligors on
the consumer paper and an officer of the Oregon commercial bank
certifies in writing that the creditworthiness of the obligors on
the consumer paper has been evaluated. The certificate shall be
retained as part of the records of the Oregon commercial
bank. + }
SECTION 151. { + Bankers' acceptances of other financial
institutions. In addition to obligations permitted under section
144 of this 1997 Act, an Oregon commercial bank may acquire
obligations of a person without regard to amount in the form of
bankers' acceptances of other financial institutions of the kind
described in section 13 of the Federal Reserve Act. + }
SECTION 152. { + Obligations secured by documents covering
readily marketable staples. (1) In addition to obligations
permitted under section 144 of this 1997 Act, an Oregon
commercial bank may make loans and acquire other obligations of a
person secured by documents of title covering readily marketable
staples, provided the obligation does not exceed:
(a) 15 percent of the Oregon commercial bank's capital, where
the principal amount of the obligation does not exceed 85 percent
of the market value of the staples.
(b) 20 percent of the Oregon commercial bank's capital, where
the principal amount of the obligation does not exceed 80 percent
of the market value of the staples.
(c) 25 percent of the Oregon commercial bank's capital, where
the principal amount of the obligation does not exceed 75 percent
of the market value of the staples.
(d) 35 percent of the Oregon commercial bank's capital, where
the principal amount of the obligation does not exceed 70 percent
of the market value of the staples.
(e) 40 percent of the Oregon commercial bank's capital, where
the principal amount of the obligation does not exceed 65 percent
of the market value of the staples.
(2) If it is customary to insure the staples mentioned in
subsection (1) of this section, the staples shall be fully
covered by insurance.
(3) This section does not apply to obligations of a person
secured by the same staples for more than 10 months.
(4) Staples, for purposes of this section, in addition to being
readily marketable, must be either:
Enrolled Senate Bill 125 (SB 125-B) Page 76
(a) Nonperishable; or
(b) Perishable, but frozen, freeze-dried, irradiated or
refrigerated for the purpose of protecting the staple against
deterioration. + }
SECTION 153. { + Obligations secured by documents covering
livestock. In addition to obligations permitted under section 144
of this 1997 Act, an Oregon commercial bank may make loans to and
acquire other obligations of a person, not to exceed 15 percent
of the Oregon commercial bank's capital, secured by documents of
title covering livestock if the principal amount of the
obligation is not more than 80 percent of the market value of the
livestock. Turkeys are considered livestock within the meaning
of this section. + }
SECTION 154. { + Obligations secured by governmental
obligations or shares of mutual fund or unit trust. In addition
to obligations permitted under section 144 of this 1997 Act, an
Oregon commercial bank may make loans to and acquire other
obligations of any person if the obligation is secured by one or
more of the following types of security and the principal amount
of the obligation is not more than 90 percent of the market value
of the security:
(1) Obligations of the United States, including those of its
agencies and instrumentalities;
(2) Obligations of public housing agencies issued pursuant to
the United States Housing Act of 1937, as amended;
(3) Obligations of the State of Oregon or any county, city,
school district, port district or other public body with the
power to levy taxes issued pursuant to the Constitution or
statutes of the State of Oregon or the charter or ordinances of
any county or city within the State of Oregon, if the issuing
body has not been in default with respect to the payment of
principal or interest on any of its obligations within five years
preceding the date of the investment; or
(4) Shares in any mutual fund or unit trust, the assets of
which are invested solely in obligations of the type described in
subsections (1) to (3) of this section. + }
SECTION 155. { + Obligations secured by governmental bonds. In
addition to obligations permitted under section 144 of this 1997
Act, an Oregon commercial bank may make loans to and accept other
obligations of a person, not to exceed 20 percent of the Oregon
commercial bank's capital, if:
(1) The obligation is secured by bonds of any state of the
United States or bonds of any county, city, school district, port
district or other public body in the United States;
(2) The principal amount of the obligation is not more than 90
percent of the market value of the bonds that secure the
obligation;
(3) The bonds are payable from ad valorem taxes; and
(4) The bonds are rated in one of the four highest grades by a
recognized investment service organization that has been engaged
regularly and continuously for a period of not less than 10 years
in rating state and municipal bonds. + }
SECTION 156. { + Insured and guaranteed obligations. In
addition to obligations permitted under section 144 of this 1997
Act, an Oregon commercial bank may make loans to and acquire
other obligations of a person without regard to amount to the
extent the obligations are insured, guaranteed or covered by
commitments or agreements to take over or purchase made by a
private mortgage insurance company, the State of Oregon, any
Federal Reserve Bank, the United States or any department,
Enrolled Senate Bill 125 (SB 125-B) Page 77
bureau, board, commission or agency of the United States,
including any corporation wholly owned, directly or indirectly,
by the United States. + }
SECTION 157. { + Obligations secured by deposits. (1) In
addition to obligations permitted under section 144 of this 1997
Act, an Oregon commercial bank may make loans to and acquire
other obligations of a person without regard to amount to the
extent the obligations are fully secured by any kind of deposit
held by the Oregon commercial bank, including but not limited to
deposits held in an automatic savings to checking transfer
account or a negotiable order of withdrawal account.
(2) In addition to obligations permitted under section 144 of
this 1997 Act, an Oregon commercial bank may make loans to and
acquire other obligations of a person without regard to amount to
the extent the obligations are fully secured at all times by any
kind of deposit, including but not limited to deposits held in an
automatic savings to checking transfer account or a negotiable
order of withdrawal account that are fully insured, guaranteed or
underwritten by the United States Government or any agency or
instrumentality of the United States by virtue of any Act of
Congress or amendments thereto. + }
SECTION 158. { + Obligations secured by life insurance policy
values. In addition to obligations permitted under section 144 of
this 1997 Act, an Oregon commercial bank may make loans to and
acquire obligations of a person not to exceed 10 percent of the
Oregon commercial bank's capital that are secured by a life
insurance policy having a cash surrender value of not less than
100 percent of the amount of the obligations, plus an amount
equal to one annual premium on the insurance policy. + }
SECTION 159. { + Obligations secured by first lien on real
estate. In addition to obligations permitted by section 144 of
this 1997 Act, an Oregon commercial bank may make loans to and
acquire other obligations of a person not to exceed 10 percent of
the Oregon commercial bank's capital that are secured by a first
lien on real estate if the obligation does not exceed 80 percent
of the fair market value of the real estate as determined by an
independent appraisal. Obligations secured by a first lien on
real estate that are subject to section 144 of this 1997 Act may
become exempt from section 144 of this 1997 Act if:
(1) Title to the real estate has, in good faith, passed to
another and the original maker of the note is no longer either
directly or through some other person the owner of the real
estate;
(2) The new owner has assumed the obligation and the Oregon
commercial bank looks to the owner of the real estate rather than
the maker of the obligation for payment;
(3) The obligation is not in default at the time the obligation
becomes no longer subject to section 144 of this 1997 Act; and
(4) The obligation does not exceed 80 percent of the fair
market value of the real estate at the time the obligation
becomes no longer subject to section 144 of this 1997 Act. + }
SECTION 160. { + Obligations of guarantors. In addition to
obligations permitted by section 144 of this 1997 Act, an Oregon
commercial bank may acquire obligations of a person, in the form
of a guaranty or otherwise, without regard to amount, on account
of obligations previously contracted in good faith or to reduce
the risk of loss. Any such obligations shall, however, be subject
to section 144 of this 1997 Act in determining whether the Oregon
commercial bank may make additional loans to or acquire other
obligations of the person. + }
Enrolled Senate Bill 125 (SB 125-B) Page 78
{ +
(Deposits) + }
SECTION 161. { + Deposit accounts. Oregon commercial banks
may, consistent with applicable law and safe and sound banking
practices, offer deposit accounts upon such terms and conditions
as they consider appropriate. + }
SECTION 162. { + Deposits; FDIC insurance required. Oregon
commercial banks shall secure insurance for their deposits from
the Federal Deposit Insurance Corporation or a similar
organization organized under the laws of the United States. + }
SECTION 163. { + Savings accounts; conditions for withdrawal;
interest rate. (1) Within the limits established under applicable
federal statutes and regulations, an Oregon commercial bank
receiving savings accounts shall prescribe by its bylaws or by
contract with its depositors, the time and conditions on which
repayment is to be made to depositors or to their 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. Withdrawals during a specified time period may be
limited in the aggregate to the amount designated for that time
period.
(3) Except for negotiable orders of withdrawal and similar
deposit accounts, withdrawal from which is made subject to check,
an Oregon commercial bank shall not knowingly permit a depositor
to overdraw the depositor's savings account. + }
SECTION 164. { + Securing deposits by surety bond, letter of
credit or insurance. (1) An Oregon commercial bank may secure any
of the funds deposited with the Oregon commercial bank by giving
a surety bond, an irrevocable letter of credit issued by an
insured institution, as defined in section 3 of this 1997 Act, or
a policy of insurance under which some person other than the
Oregon commercial bank becomes liable for deposits, provided that
the aggregate face amount of the bonds, letters of credit and
policies of insurance does not exceed 20 percent of the capital
of the Oregon commercial bank.
(2) A depositor may insure any deposit if the Oregon commercial
bank is not a party to the insurance and does not pay any premium
or other charges. + }
SECTION 165. { + Notice to depositor upon change in terms,
charges, withdrawal conditions or decrease in interest rate;
exception. (1) If an Oregon commercial bank changes the terms,
service charges or conditions for withdrawal of any deposit
account, the Oregon commercial bank shall notify the depositor in
writing before the change is effective. If an Oregon commercial
bank decreases the interest rate on any deposit account, other
than an account that by its terms provides for a floating,
variable or indexed rate of interest, the Oregon commercial bank
shall notify the depositor in writing before the change is
effective. With respect to deposit accounts that by their terms
provide for a floating, variable or indexed rate of interest, the
Oregon commercial bank shall not be required to give notice to
the depositor concerning changes in the interest rate other than
by means of account statements provided to the depositor in the
ordinary course, not less than once each calendar quarter. Any
notice required by this section may be given to the depositor in
person or sent to the depositor by regular mail at the last
address shown on the Oregon commercial bank's deposit account
records. In the case of accounts held in the names of two or more
Enrolled Senate Bill 125 (SB 125-B) Page 79
depositors, the Oregon commercial bank may give or send the
notice to any of the depositors.
(2) The provisions of subsection (1) of this section shall not
apply to any change in the interest rate payable upon an account
as described in ORS 86.245. + }
SECTION 166. { + Deposit made in name of minor. Any deposit to
a financial institution made to an account in the name of a minor
shall be held for the exclusive right and benefit of the minor
free from the control or lien of all other persons, except other
parties to the account and creditors, and shall be paid, in
accordance with the terms of the account, together with any
interest thereon, to or upon the order of the minor. + }
SECTION 167. { + Disposition of deposit on death of depositor.
(1) On the death of a depositor of a financial institution, if
the deposit is $25,000 or less, the financial institution may,
upon receipt of an affidavit from the person claiming the deposit
as provided in subsection (2) of this section, pay the moneys on
deposit to the credit of the deceased depositor:
(a) To the surviving spouse;
(b) If there is no surviving spouse, to the Adult and Family
Services Division, on demand of the division within 60 days from
the death of the depositor where there is a preferred claim
arising under ORS 411.795, 412.600, 413.200 or 414.105, or if
there is no claim by the division, to the surviving children 18
years of age or older;
(c) If the depositor left no surviving spouse, Adult and Family
Services Division claim or surviving children, to the depositor's
surviving parents; or
(d) If there is no surviving spouse, Adult and Family Services
Division claim, surviving child or surviving parent, to the
depositor's surviving brothers and sisters 18 years of age or
older.
(2) The affidavit shall:
(a) State where and when the depositor died;
(b) State that the total deposits of the deceased depositor in
all financial institutions in Oregon do not exceed $25,000;
(c) Show the relationship of the affiant or affiants to the
deceased depositor; and
(d) Embody a promise to pay the expenses of last sickness,
funeral expenses and just debts of the deceased out of the
deposit to the full extent of the deposit if necessary.
(3) In the event the decedent died intestate without known
heirs, the Director of the Division of State Lands shall be the
affiant.
(4) The financial institution shall determine the relationship
of the affiant to the deceased depositor, however payment of such
moneys in good faith to the affiant or affiants shall discharge
and release the transferor from any liability or responsibility
for the transfer in the same manner and with the same effect as
if the property had been transferred, delivered or paid to a
personal representative of the estate of the decedent.
(5) A probate proceeding is not necessary to establish the
right of the surviving spouse, Adult and Family Services Division
claim, surviving child, surviving parent, surviving brothers and
sisters or the Director of the Division of State Lands to
withdraw the deposits upon the filing of the affidavit. If a
personal representative is appointed in an estate where a
withdrawal of deposits was made under this section, the person
withdrawing the deposits shall account for them to the personal
representative.
Enrolled Senate Bill 125 (SB 125-B) Page 80
(6) When a financial institution transfers moneys under
subsection (1) of this section, the transferor may require the
transferee to furnish the transferor a written indemnity
agreement, indemnifying the transferor against loss for moneys
paid to the extent of the amount of the deposit.
(7) This section is subject to the rights of other parties in
the account under sections 172 to 184 of this 1997 Act. + }
SECTION 168. { + Adverse claim to deposit; notice; restraining
order or other process; indemnity bond or letter of credit. (1)
An Oregon operating institution shall be obligated to recognize
an adverse claim to a deposit it holds only if the adverse
claimant gives notice to the Oregon operating institution of its
claim and:
(a) Procures a restraining order, injunction or other
appropriate process against the Oregon operating institution in
an action wherein the person to whose credit the deposit stands
is made a party and served with summons; or
(b) Delivers to the Oregon operating institution in a form, and
with sureties acceptable to the Oregon operating institution, a
bond or an irrevocable letter of credit issued by an insured
institution, as defined in section 3 of this 1997 Act,
indemnifying the Oregon operating institution from any liability,
damage and expenses on account of the payment of the adverse
claim or the dishonor of the check or other order of the person
to whose credit the deposit stands.
(2) This section does not apply where the person in whose name
the account is carried is a fiduciary for the adverse claimant,
and the affidavit of the adverse claimant states the facts
constituting the fiduciary relationship and the facts showing
reasonable cause of belief on the part of the claimant that the
fiduciary is about to misappropriate the deposit.
(3) An Oregon operating institution may, at its option,
interplead a deposit that is subject to an adverse claim. + }
SECTION 169. { + Checks drawn by agents presumed to be in
authorized manner. If a person who owns a deposit account subject
to check authorizes another person as agent to draw checks
against the account, the financial institution, in the absence of
written notice to the contrary, may presume that any check drawn
by the agent in the manner authorized by the terms and conditions
of the account, including checks drawn to the personal order of
the agent, is drawn for a purpose authorized by the principal and
within the scope of the authority conferred upon the agent. + }
SECTION 170. { + Checks of intoxicated or drugged persons. An
Oregon commercial bank or a national bank may refuse to pay any
check, draft or order drawn upon it when the officers or
employees of the bank have reason to believe that the person
signing or indorsing the instrument was so under the influence of
liquor, drugs or controlled substances or that the person is
otherwise so incapacitated as to make it reasonably doubtful
whether the person was at the time of signing or indorsing the
check, draft or order capable of transacting business. + }
SECTION 171. { + Certified checks. (1) An Oregon commercial
bank shall certify a check only if the amount of the check
actually stands to the credit of the drawer in collected funds on
the books of the Oregon commercial bank.
(2) The amount of any certified check shall be immediately
charged to the drawer's account. + }
SECTION 172. { + Definitions for sections 172 to 184 of this
Act. As used in sections 172 to 184 of this 1997 Act, unless the
context requires otherwise:
Enrolled Senate Bill 125 (SB 125-B) Page 81
(1) 'Account' means a contract of deposit of funds between a
depositor and a financial institution, and includes a checking
account, savings account, certificate of deposit and share
account.
(2) 'Beneficiary' means a person named in a trust account as
one for whom a party to the account is named as trustee.
(3) 'Joint account' means an account payable on request to one
or more of two or more parties whether or not mention is made of
any right of survivorship.
(4) 'Multiple-party account' means a joint account, a P.O.D.
account or a trust account. 'Multiple-party account' does not
include accounts established for deposit of funds of a
partnership, joint venture or other association for business
purposes, or accounts controlled by one or more persons as the
duly authorized agent or trustee for a corporation,
unincorporated association, charitable or civic organization or a
regular fiduciary or trust account where the relationship is
established other than by deposit agreement.
(5) 'Net contribution' of a party to a joint account as of any
given time means the sum of all deposits thereto made by or for
the party, less all withdrawals made by or for the party that
have not been paid to or applied to the use of any other party,
plus a pro rata share of any interest or dividends included in
the current balance. The term includes, in addition, any proceeds
of deposit life insurance added to the account by reason of the
death of the party whose net contribution is in question.
(6) 'Party' means a person who, by the terms of the account,
has a present right, subject to request, to payment from a
multiple-party account. A P.O.D. payee or beneficiary of a trust
account is a party only after the account becomes payable to the
payee or beneficiary by reason of the payee's or beneficiary's
surviving the original party or trustee. Unless the context
requires otherwise, 'party' includes a guardian, conservator,
personal representative or assignee, including an attaching
creditor, of a party. 'Party' also includes a person identified
as a trustee of an account for another whether or not a
beneficiary is named, but it does not include any named
beneficiary unless the named beneficiary has a present right of
withdrawal.
(7) 'Payment' of sums on deposit includes withdrawal, payment
on check or other directive of a party, and any pledge of sums on
deposit by a party and any setoff, reduction or other disposition
of all or part of an account pursuant to a pledge.
(8) 'P.O.D. account' means an account payable on request to one
person during the lifetime of the person and on the death of the
person to one or more P.O.D. payees, or to one or more persons
during their lifetimes and on the death of all of them to one or
more P.O.D. payees.
(9) 'P.O.D. payee' means a person designated on a P.O.D.
account as one to whom the account is payable on request after
the death of one or more persons.
(10) 'Request' means a proper request for withdrawal, or a
check or order for payment, that complies with all conditions of
the account, including special requirements concerning necessary
signatures and regulations of the financial institution. If the
financial institution conditions withdrawal or payment on advance
notice, for purposes of sections 172 to 184 of this 1997 Act, the
request for withdrawal or payment is treated as immediately
effective and a notice of intent to withdraw is treated as a
request for withdrawal.
Enrolled Senate Bill 125 (SB 125-B) Page 82
(11) 'Sums on deposit' means the balance payable on a
multiple-party account including interest, dividends and, in
addition, any deposit life insurance proceeds added to the
account by reason of the death of a party.
(12) 'Trust account' means an account in the name of one or
more parties as trustee for one or more beneficiaries where the
relationship is established by the form of the account and the
deposit agreement with the financial institution, and there is no
subject of the trust other than the sums on deposit in the
account. It is not essential that payment to the beneficiary be
mentioned in the deposit agreement. A trust account does not
include a regular trust account under a testamentary trust or a
trust agreement that has significance apart from the account, or
a fiduciary account arising from a fiduciary relationship such as
attorney-client.
(13) 'Withdrawal' includes payment to a third person pursuant
to check or other directive of a party. + }
SECTION 173. { + Application of sections 174 to 176 of this
Act; liability and setoff rights of financial institutions. The
provisions of sections 174 to 176 of this 1997 Act concerning
beneficial ownership as between parties, or as between parties
and P.O.D. payees or beneficiaries of multiple-party accounts,
are relevant only to controversies between those persons and
their creditors and other successors, and have no bearing on the
power of withdrawal of those persons as determined by the terms
of account contracts. The provisions of sections 178 to 183 of
this 1997 Act govern the liability of financial institutions that
make payments pursuant thereto, and their setoff rights. + }
SECTION 174. { + Ownership of multiple-party accounts. (1) A
joint account belongs, during the lifetime of all parties, to the
parties in proportion to the net contributions by each to the
sums on deposit, unless there is clear and convincing evidence of
a different intent.
(2) A P.O.D. account belongs to the original party during the
lifetime of the party and not to the P.O.D. payee or payees. If
two or more persons are named as original parties, during their
lifetimes, rights as between them are governed by subsection (1)
of this section.
(3) Unless a contrary intent is manifested by the terms of the
account or the deposit agreement or there is other clear and
convincing evidence of an irrevocable trust, a trust account
belongs beneficially to the trustee during the lifetime of the
trustee. If two or more parties are named as trustees on the
account, during their lifetimes beneficial rights as between them
are governed by subsection (1) of this section. If there is an
irrevocable trust, the account belongs beneficially to the
beneficiary. + }
SECTION 175. { + Multiple-party accounts; disposition of
deposit upon death of party or trustee; effect of will. (1) Sums
remaining on deposit at the death of a party to a joint account
belong to the surviving party or parties as against the estate of
the decedent, unless there is clear and convincing evidence of a
different intention in the bank's account records at the time of
death. If there are two or more surviving parties, their
respective ownerships during their lifetimes shall be in
proportion to their previous ownership interests under section
174 of this 1997 Act augmented by an equal share for each
survivor of any interest the decedent may have owned in the
account immediately before death. The right of survivorship
continues between the surviving parties.
Enrolled Senate Bill 125 (SB 125-B) Page 83
(2) If the account is a P.O.D. account:
(a) On the death of one of two or more original parties, the
rights to any sums remaining on deposit are governed by
subsection (1) of this section.
(b) On the death of the sole original party or the survivor of
two or more original parties, any sums remaining on deposit
belong to the P.O.D. payee or payees, if surviving, or to the
survivor of them if one or more die before the original party. If
two or more P.O.D. payees survive, there is no right of
survivorship in the event of death of a P.O.D. payee thereafter
unless the terms of the account or deposit agreement expressly
provide for survivorship between them.
(3) If the account is a trust account:
(a) On the death of one of two or more trustees, the rights to
any sums remaining on deposit are governed by subsection (1) of
this section.
(b) On the death of the sole trustee or the survivor of two or
more trustees, any sums remaining on deposit belong to the person
or persons named as beneficiaries, if surviving, or to the
survivor of them if one or more die before the trustee, unless
there is clear and convincing evidence of a contrary intent. If
two or more beneficiaries survive, there is no right of
survivorship in event of death of any beneficiary thereafter
unless the terms of the account or deposit agreement expressly
provide for survivorship between them.
(4) In other cases, the death of any party to a multiple-party
account has no effect on beneficial ownership of the account,
other than to transfer the rights of the decedent as part of the
estate of the decedent.
(5) A right of survivorship arising from the express terms of
the account or under this section, a beneficiary designation in a
trust account, or a P.O.D. payee designation, cannot be changed
by will. + }
SECTION 176. { + Right of survivorship based on form of
account; alteration of form of account. The provisions of section
175 of this 1997 Act as to rights of survivorship are determined
by the form of the account at the death of a party. Subject to
satisfaction of the requirements of the financial institution,
the form of an account may be altered by written order given by a
party to the financial institution. The order must be signed by a
party, received by the financial institution during the party's
lifetime, and not countermanded by other written order of the
same party during the lifetime of the party. + }
SECTION 177. { + Transfer of moneys upon death of depositor or
trustee is not testamentary disposition. Any transfers resulting
from the application of section 175 of this 1997 Act are
effective by reason of the account contracts involved and section
175 of this 1997 Act, and are not to be considered as
testamentary or subject to administration in the estate of a
deceased party. + }
SECTION 178. { + Payment of deposit in multiple-party account
to one or more parties; institution not required to determine
source or use of funds in account. Financial institutions may
enter into multiple-party accounts to the same extent that they
may enter into single-party accounts. Any multiple-party account
may be paid, on request, to any one or more of the parties. A
financial institution shall not be required to inquire as to the
source of funds received for deposit to a multiple-party account,
or to inquire as to the proposed application of any sum withdrawn
Enrolled Senate Bill 125 (SB 125-B) Page 84
from an account, for purposes of establishing net
contributions. + }
SECTION 179. { + Joint account; payment to any party to
account; payment to others. Any sums in a joint account may be
paid, on request, to any party without regard to whether any
other party is incapacitated or deceased at the time the payment
is demanded. Payment may not be made to the personal
representative or heirs of a deceased party unless proofs of
death are presented to the financial institution showing that the
decedent was the last surviving party or unless there is no right
of survivorship under section 175 of this 1997 Act. + }
SECTION 180. { + P.O.D. account; payment to any original
party; payment to others. Any P.O.D. account may be paid, on
request, to any original party to the account. Payment may be
made, on request, to the P.O.D. payee or to the personal
representative or heirs of a deceased P.O.D. payee upon
presentation to the financial institution of proof of death
showing that the P.O.D. payee survived all persons named as
original parties. Payment may be made to the personal
representative or heirs of a deceased original party if proof of
death is presented to the financial institution showing that the
decedent was the survivor of all other persons named on the
account either as an original party or as P.O.D. payee. + }
SECTION 181. { + Trust account; payment to any trustee;
payment to others. Any trust account may be paid, on request, to
any trustee. Unless the financial institution has received
written notice that the beneficiary has a vested interest not
dependent upon the beneficiary's surviving the trustee, payment
may be made to the personal representative or heirs of a deceased
trustee if proof of death is presented to the financial
institution showing that the decedent was the survivor of all
other persons named on the account either as trustee or
beneficiary. Payment may be made, on request, to the beneficiary
upon presentation to the financial institution of proof of death
showing that the beneficiary or beneficiaries survived all
persons named as trustees. + }
SECTION 182. { + Discharge of institution from liability for
payments made; conditions. Payment made pursuant to section 178,
179, 180 or 181 of this 1997 Act discharges the financial
institution from all claims for amounts so paid whether or not
the payment is consistent with the beneficial ownership of the
account as between parties, P.O.D. payees or beneficiaries, or
their successors. The protection given by this section does not
extend to payments made after a financial institution has
received written notice from any party able to request present
payment to the effect that withdrawals in accordance with the
terms of the account should not be permitted. Unless the notice
is withdrawn by the person giving it, the successor of any
deceased party must concur in any demand for withdrawal if the
financial institution is to be protected under this section. No
other notice or any other information shown to have been
available to a financial institution shall affect its right to
the protection provided by this section. The protection provided
by this section shall have no bearing on the rights of parties in
disputes between themselves or their successors concerning the
beneficial ownership of funds in, or withdrawn from,
multiple-party accounts. + }
SECTION 183. { + Right of institution to setoff; amount.
Without qualifying any other statutory or common law right to
setoff or lien and subject to any contractual provision, if a
Enrolled Senate Bill 125 (SB 125-B) Page 85
party to a multiple-party account is indebted to a financial
institution, the financial institution has a right to setoff
against the account in which the party has or had immediately
before the death of the party a present right of withdrawal. The
amount of the account subject to setoff is that proportion to
which the debtor is, or was immediately before the death of the
debtor, beneficially entitled and, in the absence of proof of net
contributions, to an equal share with all parties having present
rights of withdrawal. + }
SECTION 184. { + Designation of agent for account; powers of
agent. Nothing in ORS 716.024, 723.426 or 723.432 or sections 172
to 174 of this 1997 Act shall preclude a party to an account from
adding the name of another person to such an account with the
designation 'agent.' Such agent shall have no present or future
interest in the sums on deposit in such account, but the
financial institution may honor requests for payment from such
account by such agent, unless the principal is deceased at the
time the payment is requested and the financial institution has
actual knowledge of such death. Payments from such account by
such financial institution at the request of such agent shall
discharge such financial institution from all claims for amounts
so paid. + }
{ +
(Granting Security Interests in Institution Assets) + }
SECTION 185. { + Granting security interests in institution
assets. (1) An institution may only grant security interests in
its assets:
(a) To secure its indebtedness to a Federal Reserve Bank or
Federal Home Loan Bank.
(b) To secure its borrowings from others with a maturity of 90
days or less, provided the value of the assets pledged shall not
be more than 50 percent greater than the amount borrowed. If the
value of the assets pledged is more than 25 percent greater than
the amount borrowed or if the amount borrowed is greater than the
stockholders' equity of the bank, the transaction shall first be
approved in writing by the Director of the Department of Consumer
and Business Services.
(c) To secure its deposits that are not insured by the Federal
Deposit Insurance Corporation provided:
(A) The value of aggregate assets pledged does not exceed 20
percent of its stockholders' equity; and
(B) The prior written approval of the director is obtained.
(d) To secure public funds, trust funds awaiting investment or
distribution, or trust funds deposited with it by an
institution. + }
{ + (2) Notwithstanding any other provision of state law,
when an institution grants a security interest in assets to
secure public funds, the depositor of the public funds and any
bailee of pledged securities or other assets shall be entitled to
the status of a lien creditor as defined in ORS 79.3010 (3).
(3) An institution shall grant a security interest in its
assets only when authorized by a general or specific prior
resolution or its board of directors. + }
{ + (4) As used in this section, 'public funds' means
deposits belonging to:
(a) The State of Oregon that may be deposited to the official
credit of the State Treasurer, and funds that may be deposited in
an official capacity by any state officer, board or commission.
Enrolled Senate Bill 125 (SB 125-B) Page 86
(b) Any county within this state deposited to the official
credit of the county treasurer, including the funds of any
irrigation or drainage district organized under the laws of this
state, or any school district within this state where funds of
the school district are deposited with the county treasurer, and
funds that may be deposited in an official capacity by any county
officer.
(c) Any port, port commission, dock or dock commission within
this state that may be deposited to the credit of the port, port
commission, dock or dock commission, or the treasurer thereof.
(d) Any city within this state deposited to the official credit
of the city treasurer, and funds that may be deposited in an
official capacity by any officer of any municipal corporation.
(e) Any school district within this state.
(f) Any district organized under the laws of this state with
the power to levy taxes.
(g) Any housing authority organized and operating pursuant to
ORS 456.055 to 456.235.
(h) The United States and any of its agencies and
instrumentalities to be deposited in the manner and under the
rules prescribed by the United States Government. + }
{ +
(Regulatory Accounting) + }
SECTION 186. { + Generally accepted accounting principles.
Except as otherwise provided in the Bank Act or other applicable
law, institutions shall keep books and records in accordance with
generally accepted accounting principles consistently
applied. + }
SECTION 187. { + Real and personal property used in the
institution's business. (1) Real estate, furniture, fixtures,
vaults and safe deposit boxes necessary or convenient for the
operation of an institution's business shall be carried on the
books of the institution in an amount not to exceed 50 percent of
its capital, as defined in section 143 of this 1997 Act.
(2) Within guidelines established by rules promulgated under
ORS 183.310, 183.315, 183.330, 183.335 and 183.341 to 183.410 the
Director of the Department of Consumer and Business Services may
authorize an institution to exceed the limitations prescribed in
this section.
(3) Personal property acquired for lease to others in
accordance with section 132 of this 1997 Act is not subject to
the limitations of this section. + }
SECTION 188. { + Certain stock. Investments in stock of a
company that engages in activities in which a bank holding
company or a non-banking subsidiary of a bank holding company
could engage under section 119 (4) of this 1997 Act shall be
carried on the books of the institution at a value not exceeding
15 percent of the capital and surplus of the institution. + }
SECTION 189. { + Community development corporations.
Investments in community development corporations under section
125 of this 1997 Act must be accounted for on an institution's
books as ' other assets.' If the community development
corporation is organized under the Oregon Nonprofit Corporation
Law, the stock of the corporation purchased by the institution,
or the institution's membership in the corporation if it does not
issue stock, shall be carried on the books of the institution at
a value not exceeding $1. + }
Enrolled Senate Bill 125 (SB 125-B) Page 87
SECTION 190. { + Market making corporations. Investments in a
corporation engaged in the business of purchasing the stock of an
institution for purposes of holding and making a market for that
stock shall be carried on the books of the institution at a value
not exceeding $1. + }
SECTION 191. { + Capital strengthening corporations. (1) The
aggregate amount of stock of a corporation acquired under section
120 of this 1997 Act for the purpose of strengthening the
institution's capital or eliminating undesirable assets shall not
be carried on the books in excess of 20 percent of the
institution's capital.
(2) The book value of the stock shall be amortized by not less
than five percent of its original book value each year. + }
SECTION 192. { + Claims and judgments as assets. Claims
against the estates of insolvent persons or deceased or
incompetent persons and judgments against any person shall not be
carried as an asset upon the books of an institution for more
than two years, unless a written extension of time is granted by
the Director of the Department of Consumer and Business Services.
This section does not apply to loans made to the personal
representative, guardian or trustee of any estate. + }
SECTION 193. { + Charging off real estate assets. (1) An
institution that owns or holds any real estate other than as
permitted in the Bank Act shall immediately charge the book value
of real estate to profit and loss or otherwise remove the real
estate from its books.
(2) All real estate owned or held by an institution in
accordance with section 131 (3) or (4) of this 1997 Act shall be
reduced in book value by not less than five percent of its
original book value per year commencing the year title is vested
and continuing until the earlier of the year the real estate is
disposed of or the expiration of the period such real estate may
be owned or held under section 135 of this 1997 Act. Upon the
expiration of the period such real estate may be owned or held
under section 135 of this 1997 Act, the remaining book value
shall be charged off. + }
SECTION 194. { + Charging off personal property assets. Goods
and chattels owned by an institution on account of the collection
of its debts shall not be carried on the books of an institution
for more than two years after the property was acquired, unless
such period is extended by the Director of the Department of
Consumer and Business Services. + }
SECTION 195. { + Charging off bad debts. An institution shall
charge off all debts:
(1) On which interest is past due and unpaid for 12 months,
unless the debt is fully secured and in process of collection;
(2) That are classified by an examiner as a bad debt; or
(3) Upon the instruction of the Director of the Department of
Consumer and Business Services. + }
SECTION 196. { + Separate accounts for foreign branches. An
institution shall maintain the accounts of each foreign branch
independently of the accounts of other foreign branches
established by it and of its home office. At the end of each
year, the profit or loss accrued at each branch shall be
transferred to the general ledger as a separate item. + }
{ +
(Miscellaneous Provisions) + }
{ + + }
Enrolled Senate Bill 125 (SB 125-B) Page 88
{ + NOTE: + } Section 197 was deleted by amendment.
Subsequent sections were not renumbered.
SECTION 197a. { + Negligent, excessive, dishonest or unlawful
loans; civil liability of officer, director or employee. Any
officer, director or employee of an institution who knowingly or
negligently loans the funds of the institution in a dishonest or
unlawful manner or permits the funds of the institution to be so
loaned, is liable for the full amount of the loan and for all
damages that the institution, its stockholders or any other
person has sustained in consequence thereof. The liability for
the loan continues until the loan, with interest, is paid in full
without loss to the institution. The amount of the liability may
be collected by suit or action without first attempting to
collect from the debtor. + }
SECTION 198. { + Written policies regarding reporting to and
obtaining approval of board; duty to report. Institutions shall
develop written policies regarding the types of matters that
shall be reported to and approved by the institution's board of
directors. An officer, director or employee of an institution
shall not conceal from or fail to report to the board of
directors of the institution any such matter. + }
SECTION 199. { + Receiving illegal compensation;
misapplication of property and credit. (1) An officer, director,
agent or employee of an institution shall not ask for, receive or
agree to receive any money, property or thing of value or of
personal advantage, for:
(a) Procuring or endeavoring to procure for any person any loan
from, or the purchase or discount of any paper, note, draft,
check or bill of exchange by, the institution.
(b) Permitting any person to overdraw any account with the
institution.
(2) An officer, director, stockholder, employee or agent of an
institution shall not abstract or willfully misapply any of the
property of the institution, or willfully misapply its
credit. + }
SECTION 200. { + Illegal guaranty or indorsement. An officer,
director or employee of an institution shall not make or deliver
any guaranty or indorsement on behalf of the institution whereby
the institution becomes liable upon any of its discounted notes,
bills or obligations, in any sum beyond the amount of loans and
discounts that the institution may legally make. + }
{ +
(Penalties) + }
SECTION 201. { + Civil penalties. (1) An institution that
violates:
(a) Section 187 of this 1997 Act shall forfeit a civil penalty
in an amount determined by the Director of the Department of
Consumer and Business Services of not more than $50,000.
(b) Section 165 of this 1997 Act shall forfeit a civil penalty
in an amount determined by the director of not more than $10,000.
In addition, the director may revoke the charter of the violating
institution.
(2) All money forfeited under subsections (1) and (2) of this
section shall be paid to the State Treasurer to be deposited in
the Consumer and Business Services Fund.
(3) The civil penalty may be recovered as provided in ORS
706.980. + }
Enrolled Senate Bill 125 (SB 125-B) Page 89
SECTION 202. { + Criminal penalties. Violation knowingly of
any of the provisions of section 198 of this 1997 Act is a Class
C felony. + }
{ +
AMENDMENTS TO ORS CHAPTER 709 + }
SECTION 203. ORS 709.030 is amended to read:
709.030. (1) { + Except as provided in subsection (4) of this
section, no person other than a trust company shall transact a
trust business in this state. Except as provided in subsection
(4) of this section, + } before a { - trust company or a
national bank authorized to conduct a trust business - }
{ + person + } transacts any trust business { - it - }
{ + in this state, the person shall obtain the approval of the
Director of the Department of Consumer and Business Services if
required under section 229 of this 1997 Act and + }shall deposit
with the director, as security and as a pledge for the faithful
{ - performance of its fiduciary duties - } { + conduct of its
trust business + }:
(a) Cash or interest-bearing securities, which securities shall
have a ready market value;
(b) A surety bond issued by a surety company authorized to
transact business in this state and in a form approved by the
director, under which the principal and surety indemnify the
several owners of the fund held in trust against loss due to the
failure of the trust company { - or the national bank - } ;
(c) An irrevocable letter of credit issued by { - a
commercial bank as defined in ORS 706.005 - } { + an insured
institution, as defined in section 3 of this 1997 Act + }; or
(d) Any combination of cash, letters of credit,
interest-bearing securities and surety bond.
(2) If the cash and securities held in trust amount to less
than $1,000,000, the deposit, bond, letters of credit or
combination thereof shall be $50,000. If the cash and securities
held in trust amount to $1,000,000 but do not exceed $1,500,000,
the deposit, bond, letters of credit or combination thereof shall
be $100,000. For each $500,000 or fraction thereof in excess of
$1,500,000 held in trust, the deposit, bond, or letters of credit
or combination thereof shall be increased an additional $25,000;
except a trust company { - or national bank - } shall not be
required to increase the deposit, bond, letters of credit or
combination thereof to an amount in excess of { +
$1,000,000. + } { - : - }
{ - (a) $600,000, prior to January 1, 1986; - }
{ - (b) $700,000, prior to January 1, 1987; - }
{ - (c) $800,000, prior to January 1, 1988; - }
{ - (d) $900,000, prior to January 1, 1989; and - }
{ - (e) $1,000,000, prior to January 1, 1990. - }
(3) The securities shall be deposited with the director and
held by the director as trustee for the beneficiaries of the
trust funds held by the trust company { - or the national
bank - } .
{ + (4) A person shall not be required to be a trust company
if the person:
(a) Does not and will not regularly transact trust business in
the ordinary course of the person's business;
(b) Acts in a manner authorized by law and in the scope of
authority as an agent of a trust company;
Enrolled Senate Bill 125 (SB 125-B) Page 90
(c) Is an attorney rendering a service customarily performed by
an attorney;
(d) Is acting as trustee under a deed of trust;
(e) Is a licensed real estate broker rendering a service
customarily performed by a real estate broker;
(f) Is a licensed escrow agent rendering a service customarily
performed by an escrow agent; or
(g) Is exempt from the provisions of subsection (1) of this
section by rule of the director. + }
SECTION 204. ORS 709.040 is amended to read:
709.040. The securities mentioned in ORS 709.030 may only be of
the following classes:
(1) Interest-bearing bonds, notes or obligations of the United
States including those of its agencies and instrumentalities, or
bonds, notes or obligations for which the faith of the United
States is pledged for the payment of the principal and interest.
(2) Bonds or other obligations of the State of Oregon, any
county of this state or any incorporated city, town or school or
port district of this state having a population of not less than
2,000 as shown by the last federal census, or bonds of any other
state, any county, incorporated city, town or school or port
district therein having a population of not less than 25,000, as
shown by the last federal census, if:
(a) The bonds or obligations are issued in compliance with the
constitution and laws of the applicable state;
(b) The bonds or obligations are a general obligation of the
state, city, town or school or port district issuing the bonds;
and
(c) There has been no default in payment of either principal or
interest on any of the general obligations of the state, county,
incorporated city, town or school or port district for a period
of five years preceding the date of the deposit.
(3) Notes or bonds secured by first { - lien - }
{ + liens + } upon improved real estate in { + this state
or + } any { - of the States of Oregon, Washington, Idaho or
California - } { + other state + } if the obligation, plus
taxes not due and bonded indebtedness for public improvements not
due, do not exceed 50 percent of the reasonable market value of
the real estate. The trust company { - or national bank - }
shall file in support of a real estate obligation, such
appraisal, evidence of merchantable title and insurance as may be
required by the Director { + of the Department of Consumer and
Business Services + }.
SECTION 205. ORS 709.050 is amended to read:
709.050. A trust company { - or a national bank - }
authorized to do a trust business in this state which is required
to make any deposit of securities with any public official in
order to do business in this state may deposit:
(1) Notes or bonds secured by { - mortgage or deed - }
{ + mortgages or deeds + } of trust, payment of which
{ - is - } { + are + } guaranteed by { - a policy - } { +
policies + } of mortgage insurance; and
(2) Mortgage participation certificates issued by a mortgage
insurance company authorized to do business in this state in
accordance with ORS 742.282 and 742.284.
SECTION 206. ORS 709.060 is amended to read:
709.060. The deposit mentioned in ORS 709.030 is primarily
liable for the malfeasance of a trust company { - or a national
bank - } as a fiduciary and is not liable for any debt or other
Enrolled Senate Bill 125 (SB 125-B) Page 91
obligation of the company until such malfeasance liability has
been discharged.
SECTION 207. ORS 709.070 is amended to read:
709.070. A person who suffers loss or damage because of the
breach of any trust committed to a trust company { - or a
national bank - } may recover the amount of the loss or damage
out of the moneys or securities deposited under ORS 709.030 with
the director by the trust company { - or national bank - } .
SECTION 208. ORS 709.080 is amended to read:
709.080. (1) The Director { + of the Department of Consumer
and Business Services + } may charge a reasonable amount for any
expenses incurred and services rendered in connection with
deposits of securities.
(2) If a trust company { - or a national bank - } does not,
after due notice, pay to the director any charge assessed against
it under this section, the director may:
(a) Apply in payment of the charges, with interest at the legal
rate, as much as necessary of the interest { + or other
earnings + } accruing on any securities deposited with the
director; or
(b) Report the facts to the Attorney General, who shall, in the
name of the director, institute appropriate action against the
trust company { - or national bank - } .
SECTION 209. ORS 709.120 is amended to read:
709.120. (1) The Director { + of the Department of Consumer
and Business Services + } may require the immediate substitution
of other securities when the director has reason to believe that
the market value of securities which have been deposited under
ORS 709.030 have depreciated below the amount required under ORS
709.030. Substitution of securities with the director at the
request of the depositing trust company { - or national
bank - } may be permitted if approved by the director.
(2) All interest, income or dividends from all securities
deposited with the director belong to the depositing trust
company
{ - or national bank - } , and if the trust company { - or
national bank - } is solvent, it may receive and retain the
interest, income or dividends.
SECTION 210. ORS 709.150 is amended to read:
709.150. A trust company may:
(1) Act as fiscal or transfer agent of the United States or of
any state, county, municipality, political subdivision or
corporation, and in that capacity receive and disburse money;
transfer, register and countersign certificates of stock, bonds
or other evidence of indebtedness; authenticate and certify the
bonds and certificates of indebtedness, and act as
attorney-in-fact or agent of a person for any lawful purpose.
(2) Lease, hold, purchase and convey any real property
necessary or convenient in the transaction of its business.
(3) Receive deposits of moneys, securities and other personal
property in trust from any person and loan trust funds on real or
personal securities.
(4) Act as trustee under any mortgage or bonds and accept and
execute any lawful municipal or corporate trusts.
(5) Be appointed by a court and act as a fiduciary.
(6) Accept and execute any lawful trust.
(7) Rent receptacles for safe deposits of personal property and
receive personal property upon deposit for safekeeping.
(8) Purchase, invest in and sell bills of exchange, bonds and
mortgages, and other evidences of indebtedness.
Enrolled Senate Bill 125 (SB 125-B) Page 92
(9) In the management of trust properties, discount and
negotiate promissory notes, drafts, bills of exchange and other
evidences of debt, and accept for payment at a future date drafts
drawn upon it and issue letters of credit authorizing the holders
to draw drafts upon it or its correspondents at sight or on time,
not exceeding one year.
(10) Exercise all { + other + } powers given to
{ - institutions - } { + trust companies + } under the Bank
Act.
SECTION 211. ORS 709.160 is amended to read:
709.160. (1) A trust company shall not advertise to furnish or
furnish to the public legal advice or hold itself out as
practicing law.
(2) A trust company that violates subsection (1) of this
section is ineligible for one year thereafter to be judicially
appointed as a fiduciary { + in this state + }.
SECTION 212. ORS 709.170 is amended to read:
709.170. (1) 'Common trust fund' as used in this section, means
any fund maintained by a trust company exclusively for the
collective investment and reinvestment of moneys contributed
thereto by the trust company or an affiliated trust company as a
fiduciary. For the purposes of this section, two or more trust
companies are affiliated if they are members of the same
affiliated group, within the meaning of section 1504 of the
Internal Revenue Code.
(2) A trust company may establish common trust funds for the
purpose of furnishing investments to itself as fiduciary, to an
affiliated trust company as fiduciary, or to itself or an
affiliated trust company and others as cofiduciaries. A trust
company may, as a fiduciary or cofiduciary, invest funds
{ - which - } { + that + } it lawfully holds for investment,
in interests in the common trust fund or a common trust fund of
an affiliated trust company, if the investment is not prohibited
by the instrument, judgment, decree or order creating the
fiduciary relationship, and if, in the case of cofiduciaries, the
trust company procures the consent of its cofiduciary or
cofiduciaries to the investment.
(3) The Director { + of the Department of Consumer and
Business Services + }, in accordance with ORS 183.310 to 183.550,
may adopt rules necessary to control the establishment and
operation of common trust funds and to protect the investors. A
trust company except { - national banks that are - } { + a
national bank that is + } qualified to { - act as
fiduciaries - } { + conduct a trust business + } pursuant to
the laws of the United States shall, in the operation of the
common trust fund, comply with the rules.
(4) Unless ordered by a court a trust company operating common
trust funds is not required to render a court accounting with
respect to the funds, but it may, upon application to the circuit
court of the county in which it has its principal office { + in
this state + }, obtain a settlement of its common trust fund
accounts on conditions specified by the court. When application
for the settlement is presented to a circuit court for approval,
the circuit court shall assign a time and place for hearing and
order notice thereof by:
(a) Publication once a week for three successive publications,
the first publication to be not less than 20 days prior to the
date of hearing, of a notice in a newspaper having a general
circulation in the county in which the trust company operating
the common trust fund has its principal office;
Enrolled Senate Bill 125 (SB 125-B) Page 93
(b) Mailing, not less than 14 days prior to the date of the
hearing, a copy of the notice to all beneficiaries of the trusts
participating in the common trust fund whose names are known to
the trust company from the records kept by it in the regular
course of business in the administration of the trust, directed
to them at the addresses shown by the records; and
(c) Such further notice, if any, as the court may order.
SECTION 213. ORS 709.175 is amended to read:
709.175. (1) Except as provided in ORS 709.220, subsection (2)
of this section, or as lawfully authorized by the instrument
creating the trust relationship or by court order, funds held by
a trust company { - or the trust department of a national
bank - } as fiduciary shall not be invested in stock or
obligations of, or property acquired from:
(a) The trust company { - or national bank - } or its
directors, officers or employees;
(b) Individuals connected to the trust company { - or
national bank - } or its directors, officers or employees;
(c) Organizations in which the trust company { - or national
bank - } or its directors, officers or employees hold an
interest;
(d) Affiliates of the trust company { - or national bank - }
or their directors, officers or employees;
(e) Individuals with whom there exists an interest
{ - which - } { + that + } might affect the exercise of the
best judgment of the trust company { - or national bank - } in
making the investment or acquiring the property; or
(f) Organizations in which there exists an interest which might
affect the exercise of the best judgment of the trust company
{ - or national bank - } in making the investment or acquiring
the property.
(2) Subsection (1) of this section shall not apply if the trust
company { - or trust department of a national bank - } invests
funds held by it as fiduciary in any open-end or closed-end
management type investment company or investment trust for which
the trust company { - or trust department of a national
bank - } , or an affiliate of the trust company { - or trust
department of a national bank - } , acts as investment advisor or
custodian or provides other services { + , for which services the
trust company and its affiliates may receive reasonable fees + }.
(3) For the purposes of this section, companies are affiliated
if they are members of the same affiliated group under Section
1504 of the Internal Revenue Code.
SECTION 214. ORS 709.190 is amended to read:
709.190. (1) { - A - } { + Each + } banking institution
{ + and each non-Oregon institution + } authorized to transact a
trust business { + in this state + } shall establish and
maintain in its office a trust department, in which separate
books and accounts shall be maintained. All property of the trust
department shall be segregated from and unmingled with other
property.
(2) The books and accounts of the trust department shall show
the ownership of all moneys, funds, investments and property held
by the trust department. Securities may be kept by the trust
department in either of the following ways:
(a) All certificates representing the securities of an account
may be held separate from those of all other accounts; or
(b) Certificates representing securities of the same class of
the same issuer held for particular accounts may be held in bulk
without certification as to ownership attached and, to the extent
Enrolled Senate Bill 125 (SB 125-B) Page 94
feasible, certificates of small denomination may be merged into
one or more certificates of larger denomination. { + Upon demand
by any person to whom it has a duty to account, a trust
department shall certify in writing the securities held by it for
an account. + } A trust department, if operating under the method
of safekeeping security certificates described in this paragraph,
is subject to
{ - the rules as, in the case of state chartered institutions,
the Department of Consumer and Business Services and, in the case
of national banking associations, the Comptroller of the Currency
may issue. Upon demand by any person to whom it has a duty to
account, a trust department shall certify in writing the
securities held by it for an account. - } { + such rules as may
be issued by:
(A) In the case of a banking institution, the Director of the
Department of Consumer and Business Services;
(B) In the case of an out-of-state bank, the appropriate state
supervisor;
(C) In the case of an extranational institution, the official
charged with supervising the extranational institution in the
country under the laws of which it was organized; or
(D) In the case of a national bank, the Comptroller of the
Currency. + }
(3) All { - fiduciary - } records shall be kept and retained
for such time as to enable the banking institution { + or
non-Oregon institution + } to furnish information or reports with
respect to the records that may be required by the
{ - department and, in the case of national banking
associations, the Comptroller of the Currency - } { + director
or other regulator specified in subsection (2)(b) of this
section + }. The { - fiduciary - } records shall contain full
information relative to each account and nothing contained in
this subsection shall require a banking institution { + or
non-Oregon institution + } to maintain the records required by
this section in any given manner, provided that the information
required is clearly and accurately reflected and provides an
adequate basis for the audit of the information.
(4) A banking institution { - exercising fiduciary powers - }
{ + transacting trust business in this state + } shall retain
the records required by this section for a period of three years
from the termination of the { - fiduciary account - }
relationship to which the records relate. { + A non-Oregon
institution or federal bank transacting trust business in this
state shall retain such records pertaining to the trust business
transacted by it for such periods of time as may be required by
applicable laws of the jurisdiction under which the non-Oregon
institution or federal bank is organized, or if the applicable
laws of the jurisdiction do not specify a period for retaining
the records, the non-Oregon institution or federal bank shall
retain the records required by this section for a period of three
years. + } The records shall be
{ - retained solely for purposes of - } { + available for + }
examination by the
{ - department and - } { + director or + }, in the case
of { + :
(a) + } { - national banking associations - } { + Federal
banks + }, the Comptroller of the Currency { + or other federal
supervisor;
(b) Out-of-state banks and out-of-state trust companies, the
appropriate state supervisor; or
Enrolled Senate Bill 125 (SB 125-B) Page 95
(c) Extranational institutions, the official charged with
supervising the extranational institution in the country under
the laws of which it was organized + }.
SECTION 215. ORS 709.200 is amended to read:
709.200. (1) In the acquisition or investment of trust
property, a trust company { - or trust department of a national
bank - } may take in its own name, or in the name of its nominee,
any assets in which it may be authorized to invest or hold trust
property.
(2) Upon the satisfaction, conveyance or investment of trust
property, whether the trust property is held in the name of the
trust company { - or national bank - } , individually, or in
its name as trustee or in a specified fiduciary capacity or
otherwise, the instrument of satisfaction or transfer may be
executed by the trust company { - or national bank - } in its
own name.
SECTION 216. ORS 709.220 is amended to read:
709.220. (1) Funds placed or held in trust by a trust company
{ - or by the trust department of a national bank - } awaiting
investment or distribution shall not be held uninvested or
undistributed for a longer period than is reasonable for the
proper management of the account, shall be carried in a separate
account and shall not be used by the trust company, bank or
{ - national bank - } { + extranational institution + } in
the conduct of its business or in the conduct of the business of
any of its affiliates, except that such funds may be deposited in
the commercial or savings or other department of the trust
company, bank or { - national bank - } { + extranational
institution + } if the trust company, bank or { - national
bank - } { + extranational institution + } first obtains and
sets aside in its trust department:
(a) Bonds or other securities eligible for the investment of
trust funds;
(b) A surety bond;
(c) An irrevocable letter of credit issued by { - a
commercial bank as defined in ORS 706.005 - } { + an insured
institution, as defined in section 3 of this 1997 Act + }; or
(d) A combination of the securities, letters of credit and
surety bond.
(2) The surety bond shall be issued by a surety company
authorized to transact business in this state and approved by the
Director { + of the Department of Consumer and Business
Services + }. The bond or letter of credit shall provide that the
principal and surety or letter of credit issuer shall indemnify
the several owners of the funds held in trust against loss due to
the failure of the trust company, bank or { - national bank - }
{ + extranational institution + }.
(3) Notwithstanding the provisions of { - ORS 708.230 - }
{ + section 164 of this 1997 Act + }, the securities, the
surety bond, the letter of credit or the securities, the surety
bond and the letters of credit together shall be in an amount
equal to the portion of the trust funds not insured by the United
States Government or any agency or instrumentality of the United
States.
(4) If the trust company, bank or { - national bank - }
{ + extranational institution + } fails, the owners of the funds
held in trust for investment or distribution have a lien on the
bonds or other securities set apart, or a right of action on the
surety bond and upon the letter of credit, in addition to their
Enrolled Senate Bill 125 (SB 125-B) Page 96
claim against the estate of the trust company, bank or
{ - national bank - } { + extranational institution + }.
SECTION 217. ORS 709.270 is amended to read:
709.270. A trust company shall, except as otherwise provided in
this section, keep inviolate all communications and writings made
to or by the trustees touching the existence, condition,
management and administration of any private trust confided to
it. A creditor or stockholder is not entitled to disclosure or
knowledge of the communication or writing. However, the officers,
manager, trust officer, secretary or { - regularly employed - }
attorney of the trust company may know of the communication or
writing. In any suit or proceeding touching the existence,
condition, management or administration of the trust, the court
in which the matter is pending may require disclosure of the
communication or writing.
SECTION 218. ORS 709.280 is amended to read:
709.280. (1) A trust company { - or the trust department of a
national bank - } shall not make any loan to any director,
officer or employee of the { + trust + } company or to any
affiliate { - or subsidiary corporation - } or any director,
officer or employee of an affiliate
{ - or subsidiary corporation - } from its trust funds, and
shall not permit any director, officer, employee { - , - }
{ + or + } affiliate { - or subsidiary corporation - } to
become indebted to it in any way out of its trust funds, unless
specifically authorized to do so by the terms of the trust.
(2) An officer, director or employee of a trust company
{ - or of the trust department of a national bank - } shall not
knowingly violate any provision of this section, or aid or abet
any other person in a violation.
(3) This section shall not prevent the maintenance by a trust
company { - or by the trust department of a national bank - }
of time or demand deposits of its trust funds in an affiliate
{ - or subsidiary corporation which - } { + that + } is a bank
or { - national bank - } { + extranational institution + },
provided that the bank or { - national bank - }
{ + extranational institution + } complies with the requirements
of ORS 709.220 pertaining to obtaining and setting aside bonds,
surety bonds and other securities in an amount equal to the
portion of the trust funds not insured by the Federal Deposit
Insurance Corporation.
SECTION 219. ORS 709.300 is amended to read:
709.300. (1) { - If - } A national { - banking association
is domiciled within this state or if it had a lawfully
established branch office in this state on December 31, 1964,
it - } { + bank authorized to conduct a trust business that has
complied with the applicable provisions of this chapter + } may
{ - act in fiduciary capacities - } { + transact trust
business + } in all respects, as provided by applicable laws of
the United States and rules and regulations promulgated pursuant
thereto. All acts provided in the Bank Act to be performed by the
State Treasurer, the Director { + of the Department of Consumer
and Business Services + } or other public officials for or in
respect to trust companies, shall be performed for national
{ - banking associations - } { + banks + } equally with trust
companies.
(2) Every national { - banking association which - }
{ + bank that + }is authorized to { - exercise fiduciary
powers and which - } { + transact trust business and that + }
Enrolled Senate Bill 125 (SB 125-B) Page 97
has qualified by making the deposit of securities required under
ORS 709.030, may:
(a) Act or be appointed by any court to act in any fiduciary
capacity to the same extent as any trust company;
(b) Use the word 'trust' in its corporate name; and
(c) Advertise its authority to act in fiduciary capacities.
SECTION 219a. ORS 709.330 is amended to read:
709.330. (1) When a sale or transfer of assets or liabilities
becomes effective, { - as provided in ORS 711.205, - } the
purchasing corporation shall succeed to all the rights,
obligations and relations of the selling corporation to or in
respect to any person, estate, creditor, depositor, trustee or
beneficiary of any trust and in respect to any fiduciary
relation, and the rights, obligations and relations shall remain
unencumbered.
(2) The sale or transfer of assets shall not effect a
renunciation or revocation of any letters of administration,
letters testamentary, letters of guardianship or any other
fiduciary relationship.
(3) If any trust requires the approval of the court to a change
of the fiduciary, within 90 days after the change becomes
effective the successor fiduciary shall file notice of the change
with the court having jurisdiction and serve notice of the change
upon each beneficiary. The notice may be served in the manner
provided in ORCP 9 or, if the residence of a beneficiary is not
known, notice may be published in the manner provided for the
publication of summons.
(4) A beneficiary or other person interested in the trust or
estate may, within 90 days after the service of the notice, apply
to the appropriate court for a change of fiduciary or such other
relief as may be proper.
SECTION 220. ORS 709.350 is amended to read:
709.350. (1) If a trust company { - or national bank doing a
trust business - } goes into voluntary or involuntary
liquidation or receivership, the appointment of a successor
trustee for the trust shall be handled by the court hearing the
liquidation proceedings upon petition by the Director { + of the
Department of Consumer and Business Services + }, the trust
company, any interested person or, in the case of a
{ - national - } { + federal + } bank { + or extranational
institution + }, by its receiver or liquidating agent.
(2) Upon the filing of the petition, the court shall order all
persons interested in any trust to designate and take all
necessary steps to appoint a successor trustee within a time
fixed in the order, or to show cause why a successor trustee
should not be appointed by the court. The order may be general in
its terms and need not designate the trusts involved or the
nature, purpose or extent of the trusts, or give the name of any
of the beneficiaries or interested persons.
(3) In a trust where those interested in the trust fail to
cause a successor trustee to be appointed prior to the time fixed
in the order, the court shall appoint a successor trustee.
(4) The successor trustee shall succeed to all the rights,
powers, and obligations of the trust company { - or national
bank - } in liquidation, except claims or liabilities arising
out of the management of { - the trust - } { + trusts + }
prior to the date of transfer.
(5) A copy of the order provided for in subsection (2) of this
section { - , - } shall be published once a week for four
successive weeks in a newspaper of general circulation to be
Enrolled Senate Bill 125 (SB 125-B) Page 98
designated by the court and published in the county in which the
liquidation proceedings of the trust company { - or national
bank - } are carried on. If there is no newspaper published in
the county, { + or if the court conducting the liquidation
proceedings is located outside this state, + } publication shall
be made in a newspaper of general circulation in the State of
Oregon designated by the court. Proof of publication shall be
made in the same manner as proof of publication of summons is
made.
(6) The filing of the petition and the making and entering of
the order and the publishing of a copy of the order, gives the
court full jurisdiction of the trusts and all parties interested
in the trusts. A court having jurisdiction shall require the
director to mail, by registered mail or by certified mail with
return receipt, postage prepaid, a copy of the order to each
living trustor of all private trusts in which the trust company
{ - or national bank - } is trustee or to the then directly
participating beneficiaries of all private trusts in which there
is no living trustor. The notice shall be mailed to the
last-known address of each trustor or participating beneficiary
as shown by the records of the trust company { - or national
bank - } . Proof of mailing shall be in such form as the court
may require. Failure to mail the notice or the nonreceipt of the
notice by any trustor or participating beneficiary shall not
affect the jurisdiction of the court or invalidate any order or
decree made in the proceedings.
(7) It is unnecessary to require the appearance of minors or
other incompetents by guardians ad litem or otherwise.
{ + (8) The provisions of subsections (2) to (6) of this
section shall apply only to trust companies that are organized
under the laws of this state and to trust companies that are the
trust departments of banks having their principal places of
business in this state. If any other trust company goes into
voluntary or involuntary liquidation or receivership, the
proceedings shall be governed by the laws of the state or country
in which the proceedings are initiated. The director and any
other interested person may participate in the proceedings. Any
successor trustee appointed pursuant to the proceedings shall
succeed to all the rights, powers and obligations of the trust
company, except claims or liabilities arising out of the
management of trusts prior to the date of transfer. + }
SECTION 221. ORS 709.390 is amended to read:
709.390. { + (1) + } If a trust company { - or national
bank - } discontinues its trust business, the Director { + of
the Department of Consumer and Business Services + } shall file
in the circuit court for the county in which the principal place
of business of the trust company { - or national bank - } is
located a verified petition:
{ - (1) - } { + (a) + } Stating that the trust company
{ - or national bank - } is closing, dissolving or transferring
its trust business or is in process of voluntary or involuntary
liquidation.
{ - (2) - } { + (b) + } Requesting that claims, if any,
against the deposit made under ORS 709.030 by the trust company
{ - or national bank - } with the director be determined.
{ + (2) Notwithstanding the provisions of subsection (1) of
this section, if proceedings for the liquidation of the trust
company have been commenced in a court located in a county or
state other than the county in this state in which the trust
company has its principal place of business, the director shall
Enrolled Senate Bill 125 (SB 125-B) Page 99
file the verified petition described in subsection (1) of this
section in the court where the proceedings have been
commenced. + }
SECTION 222. ORS 709.400 is amended to read:
709.400. (1) Upon the filing of the petition under ORS 709.390,
the court shall make an order requiring all persons having claims
against the deposits to start action in the circuit court hearing
the director's petition within six months after the date of the
order. Any claim not filed within the six-month period is barred.
The petition or the order need not give the names of any
beneficiary or the nature of the trusts protected by the deposit.
(2) A copy of the order shall be published in a newspaper
designated by the court, having a general circulation in the
county of the principal place of business of the trust company
{ - or national bank - } at least once a week for as many
consecutive weeks as the court orders, but not less than four
weeks nor more than 12 weeks. If a newspaper is not published in
the county, the copy of the order shall be published in a
newspaper { + of general circulation in the State of Oregon + }
designated by the court. Proof of publication shall be made in
the same manner as proof of publication of summons is made and
the proof shall be filed with the clerk of the court.
(3) The filing of the petition, under ORS 709.390, and the
making and entering of the order and the publishing of a copy of
the order under this section gives the court exclusive
jurisdiction of deposited securities and of all parties having an
interest in or claim upon the securities.
(4) A court shall require the director to mail, { - by
registered mail or - } by certified mail with return receipt,
postage prepaid, a copy of the order to each living trustor of
all private trusts in which the trust company { - or national
bank - } is trustee and which have not been closed or to the
directly participating beneficiaries of all private trusts in
which there is no living trustor. The notice shall be mailed to
the last-known address of each trustor or participating
beneficiary as shown by the records of the trust company { - or
national bank - } . Proof of mailing shall be in the form
required by the court. Failure to mail the notice or the
nonreceipt of the notice by any trustor or participating
beneficiary shall not affect the jurisdiction of the court or
invalidate any order or judgment made in the proceedings.
(5) The appearance of minors or other incompetents by guardians
ad litem or otherwise is not necessary.
{ + (6) The provisions of subsections (1) to (4) of this
section shall apply only to trust companies that are organized
under the laws of this state and to trust companies that are the
trust departments of banks having their principal places of
business in this state. If a petition is filed under ORS 709.390
(2), the proceedings shall be governed by the laws of the state
or country in which the petition is filed. A copy of any court
order requiring persons having claims against the deposits made
by the trust company under ORS 709.030 to bring their claims
within a specified period of time shall be published in a
newspaper of general circulation in the State of Oregon. The
director shall mail, by certified mail with return receipt,
postage prepaid, a copy of the order to each trustor living in
this state of a private trust in which the trust company is
trustee and which has not been closed, and to the directly
participating beneficiaries who reside in this state of any
private trust in which there is no trustor living in Oregon. The
Enrolled Senate Bill 125 (SB 125-B) Page 100
notice shall be mailed to the last known address of each such
trustor or participating beneficiary as shown by the records of
the trust company. + } { + Proof of mailing shall be in the form
required by the court. Failure to mail the notice or the
nonreceipt of notice by any trustor or participating beneficiary
shall not affect the jurisdiction of the court or invalidate any
order or judgment made in the proceedings. + }
SECTION 223. ORS 709.410 is amended to read:
709.410. The filing by the Director { + of the Department of
Consumer and Business Services + } of the petition provided for
in ORS 709.390 terminates the right of the trust company { - or
national bank - } affected thereby to do a trust business { +
in this state + }, except as may be necessary to wind up then
existing trusts.
SECTION 224. ORS 709.420 is amended to read:
709.420. (1) In all actions to determine claims to the
deposits, the Director { + of the Department of Consumer and
Business Services + } shall be a necessary party defendant.
(2) An action shall not be considered to have begun within the
time required by the order unless, in the case of defendants
within the state, summons is actually served within 60 days after
the time limited in the order.
(3) Actions filed to determine claims to the deposits shall
have preference upon the calendar of any { + Oregon + } trial or
appellate court and shall be tried by { - the - }
{ + such + } courts without unnecessary delay.
SECTION 225. ORS 709.430 is amended to read:
709.430. (1) If any actions on claims against the deposit
mentioned in ORS 709.390 are begun within the six-month period,
the Director { + of the Department of Consumer and Business
Services + } shall not release and the court shall not order the
payment of any part of the deposit until all actions are
determined by final judgment.
(2) When all actions on claims against the deposit are finally
determined, so much of the deposit as is necessary shall be paid
to the claimants who have established their claims in the sums
allowed by the court or, if not sufficient, the deposit shall be
distributed pro rata among the claimants establishing their
claims.
(3) The court, in the proceeding initiated by the director,
shall decree that the balance of the deposit be paid to the trust
company { - or national bank - } or if the trust company
{ - or national bank - } is in the process of liquidation, to
the official in charge of the liquidation.
SECTION 226. ORS 709.440 is amended to read:
709.440. All unpaid charges owing to the director for expenses
and services rendered under ORS 709.080 in connection with the
deposit mentioned in ORS 709.030, and all expenses incurred by
the Director { + of the Department of Consumer and Business
Services + }, including services rendered by the director,
attorney fees and necessary court expenses in connection with the
determination of claims against the deposit, are a first and
prior lien on the deposit, and shall be paid before any part of
the deposit is released or paid to any claimant { - , - }
{ + or + } trust company
{ - or national bank - } .
SECTION 227. ORS 709.460 is amended to read:
709.460. (1) ORS 709.390 to 709.450 do not apply to a merger or
consolidation of a trust company { - or national bank - } with
another trust company { - or national bank - } authorized to
Enrolled Senate Bill 125 (SB 125-B) Page 101
conduct a trust business whereby the security deposits and the
trust business of the retiring trust company { - or national
bank - } are acquired by the resulting trust company { - or
national bank - } .
(2) Immediately following the completion of a merger or
consolidation described in subsection (1) of this section, the
Director { + of the Department of Consumer and Business
Services + }, upon written application of the resulting trust
company { - or national bank - } , shall return to the
resulting trust company { - or national bank - } that portion
of the combined security deposits of the trust companies { - or
national banks - } involved in the merger or consolidation which
exceeds the deposit required by ORS 709.030 for the combined cash
and securities held in trust by the resulting trust company
{ - or national bank - } following the merger or consolidation.
SECTION 228. { + Sections 229 to 234a of this Act are added to
and made a part of ORS chapter 709. + }
SECTION 229. { + (1) Except as provided in ORS 709.030 (4) or
in subsection (4) of this section, no company shall transact any
trust business in this state until the company has obtained a
certificate of authority from the Director of the Department of
Consumer and Business Services under this section, authorizing
the company to transact trust business in this state.
(2) To procure a certificate of authority to transact trust
business in this state, a company to whom this section applies
shall file a written application with the director, which shall
contain or be accompanied by:
(a) The name of the company.
(b) The state or country under the laws of which the company is
organized.
(c) The date of incorporation or other organization of the
company.
(d) The period of duration of the company, if the duration is
not perpetual.
(e) A mailing address to which the director may send notices.
(f) The address of the principal office of the company in the
state or country under the laws of which it is organized.
(g) The street address of the proposed registered office of the
company in this state and the name of its proposed registered
agent, who shall be amenable to service of process at that
address.
(h) A brief statement setting forth any background and
experience of the company in conducting a trust business in the
state or country in which it is organized, and its qualifications
to transact trust business in this state.
(i) The names and addresses of the chief executive officer and
the secretary of the company.
(j) Any additional information that the director may by rule
require.
(k) The verified signature of the chief executive officer of
the company, certifying that all information contained in the
application is true, accurate and complete.
(L) A certificate of existence or a document of similar import,
duly authenticated by the official with custody of the corporate
or other records in the state or country under the laws of which
the company is organized, evidencing the authorization of the
company to transact business as a foreign corporation under ORS
60.701 to 60.731.
(m) An application fee of $2,500, provided that no application
fee shall be charged under this paragraph:
Enrolled Senate Bill 125 (SB 125-B) Page 102
(A) If the applicant is concurrently applying for a charter
under ORS chapter 707; or
(B) If the director reduces or waives the application fee.
(3) If the director finds that the application conforms to the
requirements of subsection (2) of this section and that the
applicant is qualified by experience to transact trust business
in this state, the director shall direct the applicant to make
the security deposit required under ORS 709.030, and when the
deposit is made, the director shall issue and send to the company
a certificate of authority to transact business.
(4) The requirement to procure a certificate of authority under
this section shall not apply to the extent preempted by federal
law, or to any bank lawfully transacting trust business in this
state on the effective date of this 1997 Act. + }
SECTION 230. { + (1) An Oregon trust company may convert into
an out-of-state trust company subject to the prior approval of
the supervisory authority having jurisdiction over the proposed
resulting trust company. Upon completion of such a conversion,
the Oregon charter shall terminate, except for the purposes
specified in ORS 711.040.
(2) An out-of-state trust company that follows the procedures
prescribed by the supervisory authority having jurisdiction over
the converting out-of-state trust company shall be granted a
charter as an Oregon trust company by the Director of the
Department of Consumer and Business Services if the director
finds that the converting trust company meets the standards of
the Bank Act for organization as an Oregon trust company. An
out-of-state trust company may apply to convert to an Oregon
trust company and obtain a charter as an Oregon trust company by
filing with the director:
(a) A certificate signed by the chief executive officer of the
converting out-of-state trust company certifying that the board
of directors has taken all necessary corporate action in
compliance with the provisions of the laws of the supervisory
authority having jurisdiction over the converting out-of-state
trust company.
(b) The articles of incorporation, approved by a majority of
the stockholders of the converting out-of-state trust company,
for the operation of the out-of-state trust company as an Oregon
trust company. + }
SECTION 231. { + An Oregon trust company may merge with or
have its outstanding shares acquired by any other trust company
if the merger or acquisition of shares is permitted by the laws
of the jurisdiction having supervisory authority over the
resulting trust company. An Oregon trust company that merges with
or engages in a share exchange with another trust company shall
follow the procedures set forth in sections 271 to 274 of this
1997 Act. + }
SECTION 232. { + ORS 711.040, 711.055 and 711.060 shall be
applicable to a merging or converting Oregon trust company. + }
SECTION 233. { + (1) Subject to the provisions of this
section, and subject to the approval of the Director of the
Department of Consumer and Business Services, an Oregon trust
company may sell all or any portion of its assets or transfer all
or any portion of its liabilities to another trust company
outside the ordinary course of business. Any such sale or
transfer shall be documented by an acquisition transaction
agreement between or among the parties, which agreement shall be
approved by the board of directors of each party to the
transaction.
Enrolled Senate Bill 125 (SB 125-B) Page 103
(2) If an Oregon trust company proposes to transfer all or
substantially all of its assets, liabilities or both outside the
ordinary course of business, it shall send notice of the
acquisition transaction to each of its stockholders within 30
days after its board approves the acquisition transaction, which
notice shall set forth the substantive provisions of ORS 711.045
and sections 280 and 281 of this 1997 Act. To be effective, each
Oregon trust company that is a party to the acquisition
transaction shall have the acquisition transaction approved by a
two-thirds vote of the outstanding stock of each class of voting
shares at a meeting called to consider the acquisition
transaction.
(3) The director shall approve an acquisition transaction that
is subject to this section if the director finds that the
acquisition transaction:
(a) Conforms with the provisions of the Bank Act;
(b) Will not be detrimental to the safety and soundness of an
Oregon trust company that is a party to the acquisition
transaction;
(c) Is not contrary to the public interest; and
(d) If the acquiring trust company is not an Oregon trust
company, the director is satisfied that the acquisition
transaction is permitted by the supervisory authority, if any,
having jurisdiction over the acquiring trust company.
(4) If the director disapproves an acquisition transaction that
is subject to this section, the director shall state any
objections in writing and give the parties to the acquisition
transaction an opportunity to take action to obviate the
objections.
(5) Any party to an acquisition transaction agreement may
appeal the decision of the director as provided in ORS 183.415 to
183.500. + }
SECTION 234. { + A stockholder of an Oregon trust company that
is a party to a merger, share exchange or acquisition transaction
shall have the rights granted stockholders of Oregon stock banks
under ORS 711.045 and sections 280 and 281 of this 1997 Act. + }
SECTION 234a. { + As provided in sections 1 to 7, chapter __,
Oregon Laws 1997 (Enrolled House Bill 3046), a trust company may
conduct transactions using electronic and digital signatures, may
be an authentication authority and may issue certificates for the
purpose of verifying digital signatures. + }
SECTION 234b. { + Section 234a of this Act takes effect only
if House Bill 3046 becomes law. + }
{ +
AMENDMENTS TO ORS CHAPTER 711 + }
SECTION 235. ORS 711.040 is amended to read:
711.040. (1) When a merger { + or conversion of an Oregon
bank + } becomes effective:
(a) The separate existence of { - all banks - } { + each
Oregon bank + } participating in the plan of merger { + or
conversion + }, except the existence of the resulting
{ - bank - } { + financial institution + }, ends; and
(b) The resulting { - bank - } { + financial
institution + } is { - a corporate - } { + an + } entity with
all the property, rights, powers and duties of { - each merging
bank - } { + all parties to the merger + } or the converting
{ - bank - } { + financial institution + }, except as affected
by
Enrolled Senate Bill 125 (SB 125-B) Page 104
{ - state law in the case of a resulting state bank or federal
law in the case of a resulting national bank, - } { + the laws
applicable to the resulting financial institution + } and by the
charter, articles of incorporation and bylaws of the resulting
{ - bank - } { + financial institution + }.
(2) All property, { - all - } debts, { - all - } choses
in action and every other interest of each merging or converting
{ - bank is - } { + financial institution are + } transferred
to and vested in the resulting { - bank - } { + financial
institution + } without any further act or deed of any party to
the merger or conversion. The title to or any interest in any
real estate vested in any merging or converting
{ - bank - } { + financial institution + } may not revert or
be impaired because of the merger or conversion.
(3) When a merger or conversion becomes effective, the
resulting { - bank - } { + financial institution + } shall be
liable for all liabilities and obligations of each of the merging
or converting
{ - banks - } { + financial institutions + }. Any existing or
pending claim, action or proceeding by or against any merging or
converting
{ - bank - } { + financial institution + } may be prosecuted
as if the merger or conversion had not taken place, or the
resulting { - bank - } { + financial institution + } may be
substituted in its place. A merger or conversion may not impair
the rights of creditors or depositors of a merging or converting
{ - bank - } { + financial institution + } or any liens upon
the property of a merging or converting { - bank - } { +
financial institution + }.
(4) { + Unless prohibited under applicable law, + } a
resulting
{ - bank - } { + financial institution + } may use the name
of the merging
{ - bank - } { + financial institution + } or the converting
{ - bank - } { + financial institution + } whenever it can do
any act under the name more conveniently.
(5) Any reference to a merging or converting { - bank - }
{ + financial institution + } in any writing, whether executed
or taking effect before or after the merger or conversion, is a
reference to the resulting { - bank - } { + financial
institution + } if consistent with the other provisions of the
writing, and if the resulting { - bank - } { + financial
institution + } is authorized to exercise the powers conferred or
required by the writing.
SECTION 236. ORS 711.045 is amended to read:
711.045. (1) { - Within 30 days after the stockholders'
meeting at which a vote to approve a plan of merger was
taken, - } Any stockholder { + of an Oregon stock bank + } who
dissented to { - the plan of merger - } { + a transaction
listed under section 280 (1) of this 1997 Act + } and who desires
to receive the value in cash of those shares { + , + } shall make
written demand upon the { - stockholder's - } { + Oregon
stock + } bank or { - the resulting bank - } { + its
successor + } and accompany the demand with the surrender of the
share certificates, properly indorsed { + within 30 days after
the stockholders' meeting at which a vote to approve such
transaction involving an Oregon stock bank was taken + }. Any
stockholder failing to make written demand within the 30-day
period shall be bound by the terms of the proposed plan of
Enrolled Senate Bill 125 (SB 125-B) Page 105
merger { + , plan of share exchange or acquisition transaction
agreement + }.
(2) Within 30 days after { - the plan of merger - } { + a
transaction listed under section 280 (1) of this 1997 Act + } is
effected, the
{ - resulting - } { + Oregon stock + } bank { + or its
successor + } shall give written notice thereof to each
dissenting stockholder who has made demand under this section at
the address of the stockholder on the stock record books of
the { + Oregon stock + } bank, and shall make a written offer to
each such stockholder to pay for the shares at a specified price
in cash determined by the { + Oregon stock + } bank { + or its
successor + } to be the fair value of the shares as of the
effective date of the { - plan of merger - } { +
transaction + }. The notice and offer shall be accompanied by a
statement of condition of the { + Oregon stock + }
bank { + , + } the shares of which the dissenting stockholder
held, as of the latest available date and not more than four
months prior to the consummation of the { - plan of merger - }
{ + transaction + }, and a statement of income of the
{ + Oregon stock + } bank for the period ending on the date of
the statement of condition.
(3) Any stockholder who accepts the offer of the
{ - resulting - } { + Oregon stock + } bank { + or its
successor + } within 30 days following the date on which notice
of the offer was mailed or delivered to dissenting stockholders
shall be paid the price per share offered, in cash, within 30
days following the date on which the stockholder communicates
acceptance { + in writing + } to the { - resulting - }
{ + Oregon stock + } bank { + or its successor + }. Upon
payment, the dissenting stockholder shall cease to have any
interest in the shares previously held by the stockholder.
(4) If, within 30 days after notice of the offer, one or more
dissenting stockholders do not accept the { - bank's offer - }
{ + offer of the Oregon stock bank or its successor + } or if no
offer is made, then the value of the shares of the dissenting
stockholders who have not accepted the offer { - of the
bank - } shall be ascertained, as of the effective date of the
{ - plan of merger - } { + transaction + }, by
{ - three appraisers. One appraiser shall be selected by a vote
of the owners of two-thirds of the shares involved, at a meeting
called by the Director on 10 days' notice, one selected by the
board of directors of the resulting bank and the third selected
by the two so chosen - } { + an independent, qualified
appraiser chosen by the Director of the Department of Consumer
and Business Services + }. The valuation { - agreed upon by
any two appraisers - } { + determined by the appraiser + }
shall govern { - , and all the dissenting stockholders involved
shall be bound by the amount so fixed. If any necessary appraiser
is not appointed within 90 days after the effective date of the
plan of merger or if the appraisal is not completed within 120
days after the plan of merger becomes effective, the director
shall cause an appraisal to be made - } { + and the appraiser's
valuation of such shares shall not be appealable except for one
or more of the reasons set forth in ORS 36.355 (1). Any such
appeal must be made within 30 days after the date of the
appraiser's valuation and is subject to ORS 183.415 to 183.500.
The Oregon stock bank or its successor shall pay the dissenting
shareholders the appraised value of the shares within 30 days
Enrolled Senate Bill 125 (SB 125-B) Page 106
after the date the appraiser sends the Oregon stock bank or its
successor written notice of the appraiser's valuation + }.
(5) The { + director shall assess the reasonable + } costs and
expenses of the appraisal proceeding { - shall be apportioned
and assessed by the appraiser as they deem equitable against the
resulting bank or against any of the dissenting stockholders. The
appraiser shall assess the costs and expenses to the dissenting
stockholders if the appraisers find that the failure of the
dissenting stockholders to accept the offer made by the resulting
bank under subsection (2) of this section was arbitrary or
vexatious or not in good faith. The expenses shall include
reasonable compensation for and reasonable expenses of the
appraisers, but shall exclude the fees and expenses of counsel
for and experts employed by any party. However, if the fair value
of the shares as determined by the appraisers materially exceeds
the amount which the resulting bank offered to pay for them, or
if no offer was made, the appraisers may award to any stockholder
who was a party to the proceedings any sum that they determine to
be reasonable compensation to any expert or experts employed by
the stockholders in the proceeding. - } { + equally to the
Oregon stock bank or its successor and to the dissenting
shareholders, as a group, if the amount offered by the Oregon
stock bank or its successor is between 85 percent and 115 percent
of the appraised value of the shares. The director shall assess
the reasonable costs and expenses of the appraisal proceeding and
the reasonable costs and expenses, including attorney fees and
costs, of the Oregon stock bank or its successor to the
dissenting stockholders, as a group, if the amount offered by the
Oregon stock bank or its successor is 115 percent or more of the
appraised value of the shares. The director shall assess the
reasonable costs and expenses of the appraisal proceeding and the
reasonable costs and expenses, including attorney fees and costs,
of the dissenting shareholders, as a group, to the Oregon stock
bank or its successor if the amount offered by the Oregon stock
bank or its successor is 85 percent or less of the appraised
value of the shares. The director's decision regarding assessment
of fees and costs may be appealed as provided in ORS 183.415 to
183.500. + }
{ - (6) The amount due under the appraisal shall constitute a
debt of the resulting bank. - }
{ + (6) Amounts required to be paid by the Oregon stock bank
or its successors, or the dissenting shareholders under this
section shall be paid within 30 days after the director's
assessment of any fees or costs becomes final or, if the
director's decision is appealed, within 30 days after a final
determination of such fees and costs is made. + }
(7) The director may require { + , + } as a condition of
approving
{ - the plan of merger - } { + a transaction listed in
section 280 (1) of this 1997 Act, + } the replacement of all or a
portion of the
{ - capital - } { + stockholders' equity + } of { - the
resulting - } { + an Oregon stock + } bank expended in payment
to dissenting stockholders under this section.
(8) A stockholder may not receive the fair value of the
stockholder's shares under this section:
(a) If the plan of merger provides that all stockholders of the
resulting { - bank - } { + insured stock institution + }
receive common stock of a holding company pursuant to a merger
with an interim { + Oregon stock + } bank chartered under ORS
Enrolled Senate Bill 125 (SB 125-B) Page 107
707.025, and the stockholder's { + Oregon stock + } bank and the
interim { + Oregon stock + } bank are the only parties to the
merger; or
(b) If the shares held by the dissenting stockholder
immediately before the effective date of { - the plan of
merger - } { + a transaction listed in section 280 (1) of this
1997 Act + } are listed on any national securities exchange or
are included on the list of over-the-counter margin stocks issued
by the Board of Governors of the Federal Reserve System.
SECTION 237. ORS 711.055 is amended to read:
711.055. { - If a merging or converting bank has assets which
do not conform to the requirements of state law for the resulting
bank or carries on business activities which are not permitted
for the resulting bank, the director may permit a reasonable time
to conform with state law. - } { + If, pursuant to a merger or
conversion of a financial institution, the resulting or
converting financial institution is an Oregon bank and has assets
or liabilities in this state that do not conform to the
requirements of applicable law or carries on business activities
that are not permitted for the resulting or converting financial
institution, the Director of the Department of Consumer and
Business Services may:
(1) Permit the resulting or converting financial institution to
retain the nonconforming assets or liabilities or to continue the
otherwise unpermitted activities for such periods and subject to
such conditions and limitations as the director determines, by
rule or order, will not be injurious to the safety and soundness
of the resulting or converting financial institution; or
(2) Grant the resulting or converting financial institution a
reasonable time to conform with applicable law. + }
SECTION 238. ORS 711.060 is amended to read:
711.060. Without approval by the Director { + of the
Department of Consumer and Business Services + }, an asset shall
not be carried on the books of { - the - } { + a + }
resulting { + or converting financial institution that is an
Oregon + } bank at a valuation higher than that on the books of
the { - merging - } { + resulting + } or converting
{ - bank - } { + financial institution + } at the time of its
last examination prior to the effective date of the merger or
conversion.
SECTION 239. ORS 711.217 is amended to read:
711.217. In a transaction where a purchasing { + insured + }
institution assumes or agrees to pay all the liabilities of
{ - the - } { + a + } liquidating institution { + , + }
{ - ORS 711.205 applies, but - } ORS 711.220 to 711.235 do not
apply.
SECTION 240. ORS 711.225 is amended to read:
711.225. (1) All deposits { - which - } { + that + } remain
unclaimed after six months from the date of the written notice
mentioned in ORS 711.220 (3), shall be reported and transferred
by the
{ - institution - } { + Oregon stock bank + } to the Division
of State Lands as unclaimed property under ORS 98.302 to 98.436
and 98.992.
(2) A copy of the report of unclaimed deposits filed with the
Division of State Lands shall be filed with the Director { + of
the Department of Consumer and Business Services + }.
SECTION 241. ORS 711.250 is amended to read:
Enrolled Senate Bill 125 (SB 125-B) Page 108
711.250. (1) An institution may not engage in { - the - }
banking { + business + } or { + transact + } trust business if
the institution { + :
(a) + } Goes into voluntary liquidation { - , - } { + ;
(b) + } Is closed because of insolvency { - , - } { + ;
(c) + } Sells all or substantially all of its assets to another
institution { - which - } { + that + } takes over and assumes
{ + all or substantially all of + } its deposit
liabilities { + ; + } or
{ + (d) + } Does not engage in { - the - } banking
{ + business + } or { + transact + } trust business for a
period of one year.
(2) An institution shall, within one year after it ceases to do
a banking { + business + } or trust business, amend its articles
of incorporation by eliminating the power to engage in a banking
{ + business + } or trust business or it is dissolved and shall
not be reinstated and shall surrender its charter. For the
purpose of winding up its affairs, { - it - } { + the
institution + } may continue as a body corporate for a period of
five years from the date it stops doing a banking { +
business + } or trust business, and as such:
(a) The dissolution of the institution shall not take away or
impair any remedy available to or against such institution, its
directors, officers or shareholders for any right or claim
existing or any liability incurred prior to such dissolution if
an action or other proceeding thereon is commenced within five
years after the date of issuance of a certificate of dissolution
or filing of a decree of dissolution. Any other action or
proceeding by or against the institution may be prosecuted or
defended by the institution in its corporate name. The
shareholders, directors and officers shall have power to take
such corporate or other action as shall be appropriate to protect
such remedy, right or claim. If such institution was dissolved by
the expiration of its period of duration, such institution may
amend its articles of incorporation at any time during such
period of five years so as to extend its period of duration.
(b) Whenever any such institution is the owner of real or
personal property, or claims any interest or lien whatsoever in
any real or personal property, such institution { + + }shall
continue to exist during such five-year period for the purpose of
conveying, transferring and releasing such real or personal
property or interest or lien therein. Such institution shall
continue, after the expiration of such five-year period, to exist
as a body corporate for the purpose of being made a party to and
being sued in any action, suit or proceeding against it involving
the title to any such real or personal property or any interest
therein, and not otherwise. Any such action, suit or proceeding
may be instituted and maintained against any such institution as
might have been had prior to the expiration of said five-year
period. This section shall not be construed as affecting or
suspending any statute of limitations applicable to any suit,
action or proceeding instituted under this section.
(c) For the purpose of service of any process, notice or demand
within the prescribed time following such dissolution, the
Director { + of the Department of Consumer and Business
Services + } shall be an agent of the dissolved institution upon
whom service may be made.
SECTION 242. ORS 711.405 is amended to read:
Enrolled Senate Bill 125 (SB 125-B) Page 109
711.405. { - Insolvency occurs - } { + An institution will
be deemed insolvent + } when { + any of the following
occurs + }:
(1) The { - sound - } { + fair market + } value of the
assets of { - an - } { + the + } institution is insufficient
to pay its liabilities, other than liability on account of
capital debentures { - or capital stock - } . In determining
the value of its assets, bonds held by the institution shall be
valued in accordance with rules promulgated by the Director
{ + of the Department of Consumer and Business Services + }
pursuant to ORS 183.310, 183.315, 183.330, 183.335 and 183.341 to
183.410.
(2) { - A - } { + An Oregon stock + } bank fails to make
good its reserve { - , as required under ORS 708.136, within 30
days after receipt of notice from the director that its reserves
are below the required level - } { + requirements under
applicable law for a period of 30 days + }.
(3) { - A bank - } { + The institution + } cannot meet its
obligations or the demands upon it { + as they become due + }.
SECTION 243. ORS 711.415 is amended to read:
711.415. A director, officer or employee of { - a - }
{ + an Oregon stock + }bank shall not receive or permit to be
received any deposit in excess of the insurance that the
{ + Oregon stock + } bank holds for its deposits under { - ORS
708.026 - } { + section 162 of this 1997 Act + }, if the
director, officer or employee knows that the { + Oregon
stock + } bank is insolvent.
SECTION 244. ORS 711.419 is amended to read:
711.419. After { - a - } { + an Oregon stock + } bank
commits an act of insolvency or the insurance required for its
deposits under { - ORS 708.026 - } { + section 162 of this
1997 Act + } is canceled by the insurer, the Director { + of the
Department of Consumer and Business Services + } may take
possession of the property and affairs of the { + Oregon
stock + } bank and proceed to liquidate it as provided for an
insolvent { + Oregon stock + } bank under ORS 711.400 to
711.615.
SECTION 245. ORS 711.435 is amended to read:
711.435. (1) If the Director { - discovers, - } { + of the
Department of Consumer and Business Services determines + } upon
taking charge of an institution that it is only temporarily short
of available funds { - , - } and that its assets are sufficient
to pay its liabilities, leaving its { - capital - }
{ + stockholders' equity + } unimpaired, or the stockholders
will arrange to make good its
{ - capital - } { + stockholders' equity + }, if impaired,
the director may permit the officers and directors of the
institution to arrange with its depositors and creditors for an
extension of time for payment of the depositors and creditors.
(2) When the director is satisfied that the { - capital - }
{ + stockholders' equity + } of the institution has been
{ - made good, the institution - } { + brought into
conformance with the Bank Act, the institution + } is solvent and
has funds on hand with which to meet the demands made on it in
the ordinary { - way - } { + course of business + }, and the
institution has arranged with its depositors and creditors for an
extension of time to enable the institution to realize on its
assets to meet the obligations, the director may within 60 days
after taking charge of the institution permit it to resume
business.
Enrolled Senate Bill 125 (SB 125-B) Page 110
(3) The institution shall pay, at the actual per diem cost, for
the service of the director and the employees of the director in
taking charge of and looking after the affairs of the institution
during the time it was under control of the director. The money
so received shall be deposited with the State Treasurer to be
credited to the Consumer and Business Services Fund.
SECTION 246. ORS 711.465 is amended to read:
711.465. (1) Upon taking possession of the business and
property of an insolvent { + Oregon stock + } bank, the deposits
of which are to any extent insured by the Federal Deposit
Insurance Corporation, if the Federal Deposit Insurance
Corporation will accept the duty of liquidating the { + Oregon
stock + } bank, the Director { + of the Department of Consumer
and Business Services + } may appoint without bond the Federal
Deposit Insurance Corporation to act as receiver for the
{ + Oregon stock + } bank. When so appointed the Federal Deposit
Insurance Corporation shall exercise all the powers and perform
all the duties of the director in connection with the liquidation
of { + Oregon stock + } banks.
(2) Upon being notified in writing of the acceptance of the
appointment, the director shall file a certificate evidencing the
appointment of the Federal Deposit Insurance Corporation in the
office of the director. Upon the filing of the certificate the
possession of all the assets, business and property of the
{ + Oregon stock + } bank except those securities pledged under
ORS 295.015 shall be transferred from the { + Oregon stock + }
bank and the director to the Federal Deposit Insurance
Corporation, and without the execution of any instruments of
conveyance, assignment, transfer or indorsement the title to all
such assets and property shall vest in the Federal Deposit
Insurance Corporation. The director shall be relieved from all
responsibility and liability in respect to the liquidation of the
{ + Oregon stock + } bank.
SECTION 247. ORS 711.470 is amended to read:
711.470. If any { + Oregon stock + } bank in which the
deposits are to any extent insured by the Federal Deposit
Insurance Corporation is closed for the purpose of liquidation
without adequate provision being made for the payment of its
depositors and if the Federal Deposit Insurance Corporation pays
or makes available for payment the insured deposit liabilities of
the closed insured { + Oregon stock + } bank, the Federal
Deposit Insurance Corporation is subrogated to all rights against
the closed insured { + Oregon stock + } bank of the owners of
deposits to the extent of any payments made by the corporation to
the depositors.
SECTION 248. ORS 711.510 is amended to read:
711.510. (1) The moneys collected by the Director { + of the
Department of Consumer and Business Services + } under ORS
711.495 shall be, from time to time, deposited in one or more
{ - banks - } { + insured institutions + }, subject to the
order of the director.
(2) The director { - shall - } { + may + } require any bank
in which the director deposits money under this section to
furnish security therefor satisfactory to the director for the
safekeeping and prompt payment of the money deposited.
SECTION 249. ORS 711.515 is amended to read:
711.515. (1) As used in ORS 711.515 to 711.525, 'depositor '
includes purchasers or holders in due course of certificates of
deposit, cashiers' checks, certified checks, outstanding unpaid
drafts drawn or issued by an { - institution - } { + Oregon
Enrolled Senate Bill 125 (SB 125-B) Page 111
stock bank + }, unsecured letters of credit and unsecured drafts
accepted by the
{ - institution - } { + Oregon stock bank + } if the
instruments enumerated are issued pursuant to cash or credit
actually received or realized by the { - institution - } { +
Oregon stock bank + }.
(2) A depositor or deposit, including deposits of the State of
Oregon or any county, city or political subdivision thereof,
shall not have a preference or prior lien on any assets of an
insolvent { - institution - } { + Oregon stock bank + } over
the claims of other depositors or deposits, unless the assets
have been pledged as security in compliance with the provisions
of law. This subsection does not apply to any claims or demands
involving funds held by an
{ - institution - } { + Oregon stock bank + } under an
express oral or written trust agreement, where a preference to
the trust funds may be established by evidence satisfactory to
the Director { + of the Department of Consumer and Business
Services + } and the supervising court.
SECTION 250. ORS 711.520 is amended to read:
711.520. If an { - institution - } { + Oregon stock
bank + } becomes insolvent or goes into voluntary or involuntary
liquidation, the assets of the { - institution - } { + Oregon
stock bank + } shall be applied in the following order of
priority:
(1) First, if the assets have been pledged under ORS 295.015
{ - , 708.220, 708.225 - } and 709.030, to the benefit of those
for whom the assets have been pledged;
(2) Second, to pay the expenses of liquidation;
(3) Third, to satisfy the amount due the depositors; and
(4) Fourth, to satisfy the amount due sellers of federal funds.
SECTION 251. ORS 711.525 is amended to read:
711.525. Interest on unsecured interest-bearing deposits and on
secured interest-bearing deposits other than public funds shall
stop on the date any { + Oregon stock + } bank is placed in the
hands of the Director { + of the Department of Consumer and
Business Services + } for liquidation. Interest on public funds
{ - which - } { + that + } are secured as provided in ORS
chapter 295 { - and ORS 708.230 - } , shall continue at the
rate being paid by the { + Oregon stock + } bank prior to the
time it closed.
SECTION 251a. ORS 711.577 is amended to read:
711.577. (1) Any person who would be entitled to withdraw a
deposit under { - ORS 708.520 - } { + section 167 of this
1997 Act + } may claim the deposit and receive dividends thereon,
or if claim has been made it may be amended after the death of
the claimant so that future dividends are paid to the person
entitled thereto under
{ - ORS 708.520 - } { + section 167 of this 1997 Act + }.
(2) If any claim is more than $500, dividends may be paid to
the person entitled thereto, as provided in { - ORS 708.520 - }
{ + section 167 of this 1997 Act + }, if the Director { + of
the Department of Consumer and Business Services + } is satisfied
that the total dividends to be paid after the death of the
claimant are less than $100.
(3) The director is under no obligation to determine the
relationship of the affiants to the deceased depositor and the
payment of dividends made in good faith to parties making the
affidavit shall be a release of the director for the amount of
the dividends so paid.
Enrolled Senate Bill 125 (SB 125-B) Page 112
SECTION 252. ORS 711.585 is amended to read:
711.585. (1) When the Director { + of the Department of
Consumer and Business Services + } has paid to each depositor and
creditor of the institution whose claim as a depositor or
creditor has been proved and allowed, the full amount of the
claim and has made proper provision for unclaimed or unpaid
deposits or dividends and has paid all the expenses of the
liquidation, the director shall call a meeting of the
stockholders of the institution by giving notice of the meeting
for 30 days in one or more newspapers circulated in the county in
which the principal office of the institution is located. At the
meeting the stockholders shall select, by ballot, one or more
agents to administer the assets and wind up the affairs of the
institution. A majority of the stock present and voting in person
or by proxy is necessary to select an agent.
(2) The agent shall file with the director a bond or an
irrevocable letter of credit to the State of Oregon in an amount
not less than 20 percent of the book value of the assets to be
surrendered to the agent, but in no case shall the bond or letter
of credit be less than $1,000. The bond or letter of credit shall
be executed by the agent as principal. The bond shall be executed
by a surety company authorized to do business in this state as
surety, and any letter of credit shall be issued by { - a
commercial bank as defined in ORS 706.005 - } { + an insured
institution + }. The bond or letter of credit shall be
conditioned for the faithful performance of all the duties of the
agent's trust.
(3) When the agent files the required bond or letter of credit,
the director shall transfer to the agent all the assets of the
institution remaining in the hands of the director. Upon the
transfer and delivery the director is discharged from all further
liability to the institution and its creditors. The agent shall
complete the liquidation of the affairs of the institution, and,
after paying the expenses of the liquidation, shall distribute
the proceeds among the stockholders in proportion to the several
holdings of stock.
(4) If the stockholders fail to meet on the date advertised for
the stockholders' meeting or within 15 days after the advertised
date or fail to appoint an agent, or if the agent fails to
qualify as required in this section within 30 days after the date
of their selection, the director may appoint an agent. This agent
shall file a bond or letter of credit and liquidate the affairs
of the institution as though the agent had been selected by the
stockholders. Upon the transfer and delivery to the agent
appointed by the director of all the remaining assets in the
hands of the director, the director is discharged from all
further liability to the institution and its creditors.
SECTION 253. ORS 711.620 is amended to read:
711.620. (1) The Director { + of the Department of Consumer
and Business Services + } may order { - a - } { + an Oregon
stock + } bank to suspend or restrict the payment of its
liabilities to depositors and other creditors except as provided
in ORS 711.620 to 711.670, if the action is necessary for the
protection of the depositors and other creditors of the
{ + Oregon stock + } bank and is in the public interest.
(2) The order of the director is effective upon receipt by the
{ + Oregon stock + } bank of written { - or telegraphic - }
notice thereof signed by the director and shall continue in
effect until released or modified by the written order of the
director. The suspension and restriction shall not exceed a
Enrolled Senate Bill 125 (SB 125-B) Page 113
period of 90 days, but may be extended for further periods not to
exceed 90 days each upon the written order of the director.
SECTION 254. ORS 711.625 is amended to read:
711.625. (1) When the order mentioned in ORS 711.620 takes
effect, the Director { + of the Department of Consumer and
Business Services + } shall immediately take possession of the
property and affairs of the { + Oregon stock + } bank, and take
whatever action is necessary to conserve the assets of the
{ + Oregon stock + } bank pending further disposition of its
business.
(2) While the director is in possession of { - a - } { + an
Oregon stock + } bank, the director shall have all the powers
given to the director in connection with insolvent { + Oregon
stock + } banks, and the rights of interested parties shall,
subject to ORS 711.620 to 711.670, be the same as if the director
had taken possession of the { + Oregon stock + } bank because of
insolvency.
(3) All expenses of the director while in possession of the
{ + Oregon stock + } bank shall be paid out of the assets of
the { + Oregon stock + } bank and shall be a lien on the assets
prior to any other lien.
SECTION 255. ORS 711.630 is amended to read:
711.630. While the { + Oregon stock + } bank is in the
possession of the Director { + of the Department of Consumer and
Business Services + } under ORS 711.625, the director may set
aside and make available for withdrawal by depositors on a
ratable basis such amounts as in the opinion of the director may
safely be used for the purpose.
SECTION 256. ORS 711.635 is amended to read:
711.635. (1) While the { + Oregon stock + } bank is in the
possession of the Director { + of the Department of Consumer and
Business Services + } under ORS 711.625, the { + Oregon
stock + } bank may accept deposits but the deposits shall not be
subject to any limitation as to payment or withdrawal.
(2) Deposits received after the director takes possession and
the amounts released for payment to depositors under ORS 711.630,
shall be segregated and held and used solely to meet the deposit
liability and the pro rata amount so released. They shall not be
used to liquidate any indebtedness of the { + Oregon stock + }
bank existing at the time the director took possession, or any
subsequent indebtedness incurred in liquidating any indebtedness
of the { + Oregon stock + } bank existing at the time the
director took possession.
(3) Deposits received while the { + Oregon stock + } bank is
in the possession of the director shall be kept on hand in cash,
invested in direct obligations of the United States or deposited
with an approved reserve depository.
SECTION 257. ORS 711.640 is amended to read:
711.640. (1) The Director { + of the Department of Consumer
and Business Services + } may, by order, on a date fixed by the
order and at least 10 days after the date of the order, terminate
the suspension or restriction on payment of liabilities of the
{ + Oregon stock + } bank designated in the order.
(2) Immediately upon the termination of the suspension or
restriction on payment of liabilities of the { + Oregon
stock + } bank designated in the order, the director shall
surrender possession of the assets and properties of the
{ + Oregon stock + } bank to the proper officers of the
{ + Oregon stock + } bank. The receipt of the officers operates
as a full release of the director.
Enrolled Senate Bill 125 (SB 125-B) Page 114
SECTION 258. ORS 711.645 is amended to read:
711.645. (1) At least 10 days before the date on which the
suspension or restriction on the payment of liabilities is
terminated, the Director { + of the Department of Consumer and
Business Services + } shall cause a notice to be published in a
newspaper circulated in the city, town or county in which the
principal office of the { + Oregon stock + } bank is located.
Only one publication of the notice is required.
(2) The notice shall specify:
(a) The date on which the suspension or restriction on the
payment of liabilities will be removed;
(b) That the provisions of ORS 711.635 pertaining to the
segregation of deposits will not be effective after that date;
and
(c) That the segregated deposits after the removal of the
restriction or suspension will be general deposits.
(3) On or before the date of the publication of the notice, the
director shall mail, postage prepaid, to each depositor in the
{ + Oregon stock + } bank whose deposit has been segregated as
provided by ORS 711.635 a copy of the notice addressed to the
last-known address of each depositor as shown by the records of
the { + Oregon stock + } bank.
(4) The director shall hand a copy of the notice to every
depositor making a deposit in the { + Oregon stock + } bank
after the date of the newspaper publication and up to the time
the suspension or restriction on the payment of liabilities of
the { + Oregon stock + } bank is removed.
SECTION 259. ORS 711.650 is amended to read:
711.650. If the Director { + of the Department of Consumer and
Business Services + } removes the restrictions or suspensions on
the payment of liabilities of any { + Oregon stock + } bank and
surrenders possession of the assets and properties of the { +
Oregon stock + } bank to the proper officers of the { + Oregon
stock + } bank, before the 10 days' notice provided for by ORS
711.645 has been given, the { + Oregon stock + } bank shall
keep deposits segregated under ORS 711.635 separate and apart
from its other assets until the notice has been given by the
{ + Oregon stock + } bank in the manner provided in ORS 711.645.
After the notice has been given, the segregated deposits shall
become general deposits and may be mingled with the other assets
of the { + Oregon stock + } bank and the provisions of ORS
711.635 with respect to segregation of deposits shall no longer
apply.
SECTION 260. ORS 711.655 is amended to read:
711.655. Nothing in ORS 711.620 to 711.670 prevents the
assignment of a suspended deposit liability or the application of
all or a part of a suspended deposit to payment at maturity of
any indebtedness of the depositor to the { + Oregon stock + }
bank { - which - } { + that + } existed at the time the
suspension became effective, but a deposit liability subsequently
assigned may not be so applied.
SECTION 261. ORS 711.660 is amended to read:
711.660. While the payment of the liabilities of any
{ + Oregon stock + } bank is suspended or restricted under ORS
711.620, an assignment or transfer of the capital stock of the
{ + Oregon stock + } bank is invalid.
SECTION 262. ORS 711.665 is amended to read:
711.665. An order of the Director { + of the Department of
Consumer and Business Services + } under ORS 711.620 to 711.670
or the taking possession of the assets and properties of
Enrolled Senate Bill 125 (SB 125-B) Page 115
{ - a - } { + an Oregon stock + } bank by the director under
ORS 711.620 to 711.670 is not an act of insolvency of the
{ + Oregon stock + } bank and does not raise any presumption of
insolvency.
SECTION 263. ORS 711.670 is amended to read:
711.670. Compliance with the terms and conditions of ORS
711.620 to 711.670 and orders and rules promulgated as a result
of ORS 711.620 to 711.670 is a complete defense to any suit or
action brought by any depositor or creditor against { - a - }
{ + an Oregon stock + } bank with respect to any deposit or
contract liability.
SECTION 264. { + Sections 265 to 282 of this Act are added to
and made a part of ORS chapter 711. + }
SECTION 265. { + (1) An Oregon stock bank may convert into an
insured stock institution subject to the prior approval of the
supervisory authority having jurisdiction over the proposed
resulting insured stock institution.
(2) Upon completion of the conversion of an Oregon stock bank,
its charter shall terminate, except for the purposes specified in
ORS 711.040. + }
SECTION 266. { + (1) A financial institution with its head
office or any branches located in this state that follows the
procedures prescribed by the supervisory authority having
jurisdiction over the converting financial institution shall be
granted a charter of an Oregon stock bank by the Director of the
Department of Consumer and Business Services if the director
finds that the converting financial institution meets the
standards of the Bank Act for the organization of such an Oregon
stock bank.
(2) A financial institution may apply to convert to an Oregon
stock bank and obtain a charter by filing with the director:
(a) A certificate signed by the chief executive officer of the
converting financial institution certifying that all necessary
corporate actions in compliance with the provisions of the laws
of the supervisory authority having jurisdiction over the
converting financial institution have been taken; and
(b) The articles of incorporation for the operation of the
financial institution as an Oregon stock bank, in accordance with
the requirements of ORS 707.120. + }
SECTION 267. { + (1) An Oregon nonstock bank may convert into
a financial institution subject to the prior approval of the
supervisory authority having jurisdiction over the proposed
resulting financial institution.
(2) Upon completion of the conversion of an Oregon nonstock
bank, its charter shall terminate, except for the purposes
specified in ORS 711.040. + }
SECTION 268. { + (1) A financial institution with its head
office or any branches located in this state that follows the
procedures prescribed by the supervisory authority having
jurisdiction over the converting financial institution shall be
granted a charter of an Oregon nonstock bank by the Director of
the Department of Consumer and Business Services if the director
finds that the converting financial institution meets the
standards of the Bank Act for the organization of such an Oregon
nonstock bank.
(2) An insured nonstock institution may apply to convert to an
Oregon nonstock bank and obtain a charter by filing with the
director:
(a) A certificate signed by the chief executive officer of the
converting financial institution certifying that all necessary
Enrolled Senate Bill 125 (SB 125-B) Page 116
corporate actions in compliance with the provisions of the laws
of the supervisory authority having jurisdiction over the
converting financial institution have been taken; and
(b) The articles of incorporation for the operation of the
insured nonstock institution as an Oregon nonstock bank, in
accordance with the requirements of ORS 707.120. + }
SECTION 269. { + If an Oregon bank converts pursuant to
sections 265 to 268 of this 1997 Act, the conversion shall be
approved by:
(1) A majority of the full board of directors of the converting
Oregon bank, unless the articles or bylaws of the converting
Oregon bank required a greater percentage; and
(2) If the converting bank is an Oregon stock bank, a vote of a
majority of the outstanding stock of each class of voting shares
at a meeting called to consider the conversion, unless the
articles or bylaws of the converting Oregon bank required a
greater percentage. + }
{ +
(Mergers, Share Exchanges and Acquisitions) + }
SECTION 270. { + (1) Subject to the provisions and
requirements of sections 271 to 274 and 284 of this 1997 Act, any
Oregon stock bank may merge with any insured stock institution if
the merger is permitted by the supervisory authority having
jurisdiction over the resulting insured stock institution.
(2) Subject to the provisions and requirements of sections 271
to 274 and 284 of this 1997 Act, ORS chapter 715 and applicable
federal law, a company may acquire all of the outstanding shares
of one or more classes or series of stock of an Oregon stock bank
through a share exchange. + }
SECTION 271. { + (1) For each Oregon stock bank that is a
party to a merger or that proposes to have its stock acquired
through a share exchange, the plan of merger or plan of share
exchange shall be approved by a majority of the entire board of
directors of each such Oregon stock bank. If an insured stock
institution, other than an Oregon stock bank, is a party to a
merger with an Oregon stock bank, the plan of merger shall be
approved by such merging insured stock institution's board of
directors to the extent required under the laws applicable to
such insured stock institution.
(2) A plan of merger shall contain at least:
(a) The name of each party to the merger and the name of the
resulting insured stock institution;
(b) The terms and conditions of the proposed merger;
(c) The manner and basis of converting the shares of each
merging insured stock institution into shares, obligations or
other securities of the resulting insured stock institution or a
holding company of the resulting insured stock institution or, in
whole or part, into cash or other property;
(d) A statement of any changes in the articles of incorporation
of the resulting insured stock institution to be put into effect
by the plan of merger; and
(e) Any other provisions with respect to the proposed merger
that the Director of the Department of Consumer and Business
Services determines to be necessary.
(3) A plan of share exchange shall contain at least:
(a) The name of the Oregon stock bank whose shares will be
acquired and the name of the acquiring company;
(b) The terms and conditions of the proposed share exchange;
Enrolled Senate Bill 125 (SB 125-B) Page 117
(c) The manner and basis of the exchange of shares of the
Oregon stock bank for shares, obligations or other securities of
the acquiring company or of any other company or for cash or for
other property in full or in part;
(d) A statement of any changes in the articles of incorporation
of the acquired Oregon stock bank to be put into effect by the
plan of share exchange; and
(e) Any other provision with respect to the proposed share
exchange that the director determines to be necessary.
(4) After approval by the board of directors, the plan of
merger or plan of share exchange shall be submitted to the
director for approval, with a nonrefundable application fee of
$3,000. Certified copies of the authorizing resolutions of each
board of directors, if any such resolutions are required under
applicable law, showing approval of the plan of merger or plan of
share exchange in accordance with subsection (1) of this section
shall also be submitted. For each Oregon stock bank that is a
party to a merger or is to be acquired through a share exchange,
the certified copies of the board resolutions shall also show
that the resolutions were approved by a majority of the entire
board. + }
SECTION 272. { + (1) Within 90 days after receiving the
materials and fee specified in section 271 of this 1997 Act,
unless the time is extended by the Director of the Department of
Consumer and Business Services in concurrence with the
applicants, the director shall approve or disapprove the plan of
merger or plan of share exchange. The director shall approve the
plan of merger or plan of share exchange if the director finds
that:
(a) The transaction conforms with the provision of the Bank
Act;
(b) The transaction will not be detrimental to the safety and
soundness of the resulting Oregon stock bank or Oregon stock bank
to be acquired through a share exchange;
(c) The transaction is not contrary to the public interest; and
(d) The director is satisfied that the transaction is permitted
by the state or federal supervisory authority having jurisdiction
over the resulting insured stock institution or acquiring
company.
(2) If the director disapproves a plan of merger or plan of
share exchange, the director shall state any objections in
writing and give the boards of the parties to the transaction an
opportunity to amend the plan of merger or plan of share exchange
to obviate the objections. The amended plan of merger or plan of
share exchange shall be submitted to the director for approval as
if it were the original plan of merger or plan of share exchange.
(3) Any of the parties to the transaction may appeal the
decision of the director as provided in ORS 183.415 to
183.500. + }
SECTION 273. { + (1) To be effective, a merger or share
exchange involving an Oregon stock bank shall be approved by the
stockholders of each Oregon stock bank that is a party to a
merger or Oregon stock bank to be acquired through a share
exchange by a vote of two-thirds of the outstanding stock of each
class of voting shares at a meeting called to consider the merger
or share exchange.
(2) Approval of the merger or share exchange by the
stockholders constitutes the adoption of any amendments to the
articles set forth in the plan of merger or plan of share
exchange.
Enrolled Senate Bill 125 (SB 125-B) Page 118
(3) If the plan of merger or plan of share exchange adopts any
provision enumerated in ORS 707.248 affecting the rights of
nonvoting stockholders of an Oregon stock bank, such nonvoting
stockholders may vote as a class on the merger or share exchange.
(4) Each Oregon stock bank that is a party to a merger or is to
be acquired through a share exchange shall give notice of the
meeting to vote on the proposed merger or share exchange to each
stockholder of record entitled to vote on the plan of merger or
plan of share exchange at the address of the stockholder in the
books of the Oregon stock bank at least 15 days before the date
of the meeting unless the notice is waived in writing by all the
holders of shares entitled to vote on the plan of merger or plan
of share exchange. Unless, pursuant to section 279 (8) of this
1997 Act or other applicable law, the shareholders of the Oregon
stock bank are not entitled to receive fair value of their
shares, the notice shall be accompanied by a copy of ORS 711.045
and sections 280 and 281 of this 1997 Act, and shall explain that
the sections establish the rights of dissenting stockholders. The
notice shall also include any other information that the Director
of the Department of Consumer and Business Services may
require. + }
SECTION 274. { + (1) In a merger involving an Oregon stock
bank:
(a) If the resulting insured stock institution is an Oregon
stock bank, the merger shall, unless a later date is specified in
the plan of merger, become effective upon the filing with the
Director of the Department of Consumer and Business Services of
the approved plan of merger, copies of the resolutions of the
stockholders of each party to the merger (if shareholder approval
is required under law applicable to such merging insured stock
institution) and evidence satisfactory to the director that all
federal regulatory requirements, if any, have been satisfied. The
charters of each Oregon stock bank that is a party to a merger,
unless it is the resulting insured stock institution, shall
terminate when the merger becomes effective.
(b) If the insured stock institution from a merger is an
insured stock institution other than an Oregon stock bank, the
effective date and time of the merger shall be determined under
the laws governing the resulting insured stock institution. The
merger will be effective as to each Oregon stock bank that is a
party to the merger if copies of the resolutions of the directors
and shareholders of the Oregon stock bank approving the plan of
merger and evidence of the effective date and time of the merger
are filed with the director.
(c) If the resulting insured stock institution is an Oregon
stock bank, the director shall promptly issue to the Oregon stock
bank a certificate of merger specifying the names of the parties
to the merger, the name of the resulting Oregon stock bank and
the date on which the merger became effective as prescribed in
this section. The certificate shall be prima facie evidence of
the merger and of the correctness of all proceedings and may be
recorded in any office for the recording of deeds to evidence the
new name in which the property of the merging insured stock
institutions is held.
(2) In a share exchange involving an Oregon stock bank:
(a) If the stock of an Oregon stock bank is to be acquired by a
company organized under the laws of this state, the share
exchange shall, unless a later date is specified in the plan of
share exchange, become effective upon the filing with the
director the approved plan of share exchange, copies of the
Enrolled Senate Bill 125 (SB 125-B) Page 119
resolutions of the stockholders of the acquired Oregon stock
bank, and evidence satisfactory to the director that all federal
regulatory requirements, if any, have been satisfied.
(b) If the stock of the Oregon stock bank is to be acquired by
a company organized under the laws of a state other than Oregon,
the effective date and time of the share exchange shall be
determined under the laws governing such company. The share
exchange will be effective as to the acquired Oregon stock bank
if copies of the resolutions of the directors and shareholders of
the Oregon stock bank approving the share exchange and evidence
of the effective date and time of the share exchange are filed
with the director. + }
SECTION 275. { + Subject to the provisions and requirements of
sections 276 to 278 and 284 of this 1997 Act, an Oregon nonstock
bank may merge with any insured nonstock institution if the
merger is permitted by the laws of the supervisory authority
having jurisdiction over the resulting insured nonstock
institution. + }
SECTION 276. { + (1) For each Oregon nonstock bank that is a
party to a merger, the plan of merger shall be approved by a
majority of the entire board of directors of each such Oregon
nonstock bank. If an insured nonstock institution, other than an
Oregon nonstock bank, is a party to a merger with an Oregon
nonstock bank, the plan of merger shall be approved by such
insured nonstock institution's board of directors to the extent
required under the laws applicable to such insured nonstock
institution.
(2) The plan of merger shall contain:
(a) The name of each party to the merger and the name of the
resulting insured nonstock institution;
(b) The terms and conditions of the proposed merger;
(c) The manner and basis of converting the obligations or
securities of each merging insured nonstock institution into
obligations or other securities of the resulting insured nonstock
institution or, in whole or part, into cash or other property;
(d) A statement of any changes in the articles of incorporation
of the resulting insured nonstock institution to be put into
effect by the plan of merger; and
(e) Any other provisions with respect to the proposed merger
that the Director of the Department of Consumer and Business
Services determines to be necessary.
(3) After approval by the board of directors, the plan of
merger shall be submitted to the director for approval with a
nonrefundable application fee of $3,000. Certified copies of the
authorizing resolutions of each board of directors, if any such
resolutions are required under applicable law, showing approval
of the plan of merger in accordance with subsection (1) of this
section shall also be submitted. For each Oregon nonstock bank
that is a party to a merger, the certified copies of the board
resolutions shall also show that the resolutions were approved by
a majority of the entire board.
(4) After approval by each board of directors of the plan of
merger, notice of the merger shall be delivered to the household
of each depositor of each Oregon nonstock bank unless the Oregon
nonstock bank is the resulting insured nonstock institution. Such
notice shall include at least the name of the resulting insured
nonstock institution and the location of its head office and may
be included in any account statement regularly delivered to such
depositors. + }
Enrolled Senate Bill 125 (SB 125-B) Page 120
SECTION 277. { + (1) Within 90 days after receiving the
materials and fee specified in section 276 of this 1997 Act,
unless the time is extended by the Director of the Department of
Consumer and Business Services in concurrence with the
applicants, the director shall approve or disapprove the plan of
merger. The director shall approve the plan of merger if the
director finds that:
(a) The resulting insured nonstock institution meets the
requirements of the Bank Act;
(b) The merger will not be detrimental to the safety and
soundness of the resulting insured nonstock institution;
(c) The merger is not contrary to the public interest; and
(d) The director is satisfied that the merger is permitted by
the state or federal supervisory authority having jurisdiction
over the resulting insured nonstock institution.
(2) If the director disapproves a plan of merger, the director
shall state any objections in writing and give the boards of the
parties to the merger an opportunity to amend the plan of merger
to obviate the objections. The amended plan of merger shall be
submitted to the director for approval as if it were the original
plan of merger.
(3) Any of the parties to the merger may appeal the decision of
the director as provided in ORS 183.415 to 183.500. + }
SECTION 278. { + (1) If the resulting insured nonstock
institution is an Oregon nonstock bank, the merger shall, unless
a later date is specified in the plan of merger, become effective
upon the filing with the Director of the Department of Consumer
and Business Services the approved plan of merger and evidence
satisfactory to the director that all federal regulatory
requirements, if any, have been satisfied. The charters of each
Oregon nonstock bank that is a party to the merger, other than
the resulting insured nonstock institution, shall terminate when
the merger becomes effective.
(2) If the resulting insured nonstock institution is an insured
nonstock institution, the effective date and time of the merger
shall be determined under the laws governing the resulting
insured nonstock institution. The merger will be effective as to
each Oregon nonstock bank that is a party to the merger when
copies of the resolutions of the directors of the Oregon nonstock
bank approving the plan of merger and evidence of the effective
date and time of the merger are filed with the director.
(3) If the resulting insured nonstock institution is an Oregon
nonstock bank, the director shall promptly issue to the resulting
insured nonstock institution a certificate of merger specifying
the names of the parties to the merger, the name of the resulting
insured nonstock institution, and the date on which the merger
became effective as prescribed in subsection (1) of this section.
The certificate shall be prima facie evidence of the merger and
of the correctness of all proceedings and may be recorded in any
office for the recording of deeds to evidence the new name in
which the property of the merging insured nonstock institutions
is held. + }
SECTION 279. { + (1) Subject to the provisions set forth in
this section and section 284 of this 1997 Act, an Oregon bank may
sell all or any portion of its assets or transfer all or any
portion of its liabilities, other than deposit liabilities, to
any person and may transfer all or any portion of its deposit
liabilities to any insured institution.
(2) An Oregon bank may sell all or substantially all of its
assets outside the ordinary course of business, transfer all or
Enrolled Senate Bill 125 (SB 125-B) Page 121
substantially all the deposit liabilities of any of its branches
or principal place of business, or both, only with the prior
written approval of the Director of the Department of Consumer
and Business Services.
(3) An acquisition transaction agreement shall be approved by a
majority of the entire board of directors of each Oregon bank
that:
(a) Is selling assets or transferring deposit liabilities, or
both, requiring approval of the director under subsection (2) of
this section; or
(b) Is acquiring all or substantially all of the assets outside
the ordinary course of business, all or substantially all of the
deposit liabilities, or both, of another insured institution.
(4) After approval of the acquisition transaction agreement by
the board of directors of each Oregon bank that is subject to
subsection (3) of this section, the following shall be submitted
to the director, if required under subsection (2) of this
section, for approval:
(a) A copy of the acquisition transaction agreement, which
shall contain the terms of conditions of the acquisition
transaction;
(b) A nonrefundable application fee of $3,000;
(c) Certified copies of the authorizing resolutions of the
board of directors of each such Oregon bank showing approval of
the acquisition transaction agreement in accordance with
subsection (3) of this section; and
(d) Such other information as the director may require.
(5) If an Oregon stock bank proposes to transfer all or
substantially all of its assets outside the ordinary course of
business, all or substantially all of its deposit liabilities, or
both, such Oregon stock bank shall send to each of its
stockholders, within 30 days after approval by its board of
directors, notice of the acquisition transaction and a copy of
ORS 711.045 and sections 280 and 281 of this 1997 Act. To be
effective, each Oregon stock bank that proposes to transfer all
or substantially all of its assets outside the ordinary course of
business, all or substantially all of its deposit liabilities, or
both, shall have such acquisition transaction approved by a vote
of two-thirds of the outstanding stock of each class of voting
shares at a meeting called to consider the acquisition
transaction.
(6) Within 90 days after approval of the board of directors of
each Oregon nonstock bank that proposes to transfer all or
substantially all of its assets outside the ordinary course of
business, all or substantially all of its deposit liabilities, or
both, each such Oregon nonstock bank shall send notice of the
acquisition transaction to the household of each depositor of
each such Oregon nonstock bank. Such notice shall include at
least the name of the acquiring person or insured institution,
the address of the head office of such person or insured
institution, and a statement that all or substantially all of the
assets, deposit liabilities, or both, will be acquired. Such
notice may be included in any account statement sent to such
depositors.
(7) The director shall approve an acquisition transaction that
is subject to subsection (2) of this section if the director
finds that the acquisition transaction:
(a) Conforms with the provisions of the Bank Act;
(b) Will not be detrimental to the safety and soundness of an
Oregon bank that is a party to such an acquisition transaction;
Enrolled Senate Bill 125 (SB 125-B) Page 122
(c) Is not contrary to the public interest; and
(d) If the acquiring person or insured institution is not an
Oregon bank, the director is satisfied that the acquisition
transaction is permitted by the supervisory authority, if any,
having jurisdiction over the acquiring person or insured
institution.
(8) If the director disapproves an acquisition transaction that
is subject to subsection (2) of this section, the director shall
state any objections in writing and give the parties to the
acquisition transaction an opportunity to take actions to obviate
the objections.
(9) Any party to an acquisition transaction agreement may
appeal the decision of the director as provided in ORS 183.415 to
183.500. + }
SECTION 280. { + (1) A stockholder of an Oregon stock bank may
dissent from the following:
(a) A plan of merger pursuant to which the Oregon stock bank is
not the resulting insured institution;
(b) A plan of merger pursuant to which the Oregon stock bank is
the resulting insured stock institution and the number of its
voting shares outstanding immediately after the merger, plus the
number of shares issuable as a result of the merger, either by
the conversion of securities issued pursuant to the merger or the
exercise of rights and warrants issued pursuant to the merger,
will exceed by more than 20 percent the total number of voting
shares of the resulting insured stock institution outstanding
immediately before the merger;
(c) A plan of share exchange pursuant to which the Oregon stock
bank in which the stockholder owns shares is acquired; and
(d) An acquisition transaction requiring such stockholder's
approval pursuant to section 279 (5) of this 1997 Act.
(2) To perfect a stockholder's right to dissent to a
transaction described in subsection (1) of this section, the
stockholder must send or deliver a notice of dissent to the
Oregon stock bank prior to or at the meeting of the stockholders
at which the transaction is submitted to a vote, or the
stockholder must vote against such transaction.
(3) A stockholder shall not dissent as to less than all the
shares registered in the name of the stockholder, except a
stockholder holding, as a fiduciary or nominee, shares registered
in the stockholder's name for the benefit of more than one
beneficiary, may dissent as to less than all of the shares
registered in the fiduciary or nominee's name if any dissent as
to the shares held for a beneficiary is made as to all the shares
held by the fiduciary for that beneficiary or nominee. The
fiduciary's rights shall be determined as if the shares to which
the fiduciary has dissented and the other shares are registered
in the names of different stockholders. + }
SECTION 281. { + (1) A dissenting stockholder making a demand
under ORS 711.045 may withdraw the demand if:
(a) The Oregon stock bank or its successor consents to the
withdrawal; or
(b) The dissenting stockholder pays such stockholder's pro rata
share of the appraisal costs and the Oregon stock bank's
reasonable costs and expenses, including attorney fees and costs.
(2) When a dissenting stockholder withdraws the demand under
subsection (1) of this section, the stockholder's status as a
stockholder shall be restored, without prejudice to any corporate
proceedings taking place in the interim. + }
Enrolled Senate Bill 125 (SB 125-B) Page 123
SECTION 282. { + If a merger, conversion or acquisition of an
Oregon bank involves a trust company, the Director of the
Department of Consumer and Business Services shall not approve
the merger, conversion, or acquisition until satisfied that
adequate provision has been made for successor fiduciaries. + }
{ +
AMENDMENTS TO ORS CHAPTER 713 + }
SECTION 283. ORS 713.010 is amended to read:
713.010. (1) Every { - foreign institution - } { + activity
engaged in by every out-of-state bank + } and extranational
institution { - doing business in this state - }
{ + conducting a banking business in this state + } is subject
to all { + of + } the { + applicable + } provisions of the Bank
Act. { - However, when there is a conflict between the
provisions of this chapter and the provisions of another chapter
of the Bank Act, the provisions of this chapter control. - }
{ + (2) An out-of-state state bank that opens, occupies or
maintains a branch in this state pursuant to and in accordance
with the requirements of section 284 of this 1997 Act and that
has been issued a certificate of authority by the Director of the
Department of Consumer and Business Services to conduct a banking
business in this state pursuant to ORS 713.020, and 713.140 to
713.160, shall have the same powers to engage in any activity in
this state as permitted to the out-of-state state bank under the
laws of its home state, except that an out-of-state state bank
may not transact trust business in this state unless it complies
with ORS chapter 709. When there is a conflict between the
provisions of this chapter and the provisions of the laws of the
home state of the out-of-state state bank, the laws of that home
state control. + }
{ - (2) The Bank Act does not apply to any foreign or
extranational copartnership, firm, joint stock company,
association or corporation engaged in the business of loaning
money on mortgage security which does not accept deposits or
receive from citizens or residents of this state property or
money in trust on deposit or for investment. - }
SECTION 283a. { + Sections 284 and 285 of this Act are added
to and made a part of ORS chapter 713. + }
SECTION 284. { + (1) Notwithstanding any other provision of
the Bank Act, no out-of-state bank may conduct banking business
at a branch located in this state unless the out-of-state bank
has converted from, has assumed all or substantially all of
Oregon deposit liabilities of or has merged with an insured
institution that, by itself or together with any predecessor, has
been engaged in banking business or otherwise has been lawfully
accepting deposits at an office in this state for a period of not
less than three years prior to the effective date of the
conversion, assumption or merger.
(2) This section does not prohibit an out-of-state bank
lawfully conducting a banking business in this state on the
effective date of this 1997 Act from continuing to conduct
banking business in this state. + }
SECTION 285. { + An out-of-state state bank or extranational
institution shall not be denied a certificate of authority by
reason of the fact that the laws of the state or country under
which such out-of-state state bank or extranational institution
is organized, governing its organization and internal affairs
differ from the laws of this state. Nothing contained in this
Enrolled Senate Bill 125 (SB 125-B) Page 124
chapter shall be construed to authorize this state to regulate
the organization or internal affairs of such out-of-state state
bank or extranational institution. + }
SECTION 286. ORS 713.016 is amended to read:
713.016. (1) { - A foreign institution - } { + An
out-of-state state bank + } shall not { - accept deposits - }
{ + conduct banking business + } in this state unless
{ - the - } { + its insurable + } deposits are insured by the
Federal Deposit Insurance Corporation { + and the out-of-state
state bank has received a certificate of authority to conduct
banking business pursuant to ORS 713.020 and 713.140 to
713.160 + }. { - This subsection does not apply to any foreign
institution having a branch office in this state and lawfully
doing a banking business on December 31, 1966, or to
extranational institutions. - }
(2) Unless it complies with the requirements of ORS 713.025, an
extranational institution shall not { - accept deposits - }
{ + conduct banking business + } in this state. This subsection
and ORS 713.025 do not apply to any extranational institution
having a branch office in this state and lawfully { - doing
a - } { + conducting + } banking business on December 31, 1966.
SECTION 287. ORS 713.020 is amended to read:
713.020. { - (1) Every foreign institution and extranational
institution, doing business in this state, other than the loaning
of money on mortgage security or performing those functions
described in ORS 713.012 (2), shall comply with the requirements
of the Bank Act. - }
{ - (2) - } The Director { + of the Department of Consumer
and Business Services + } shall issue to { - a foreign
institution - } { + an out-of-state state bank + } or
extranational institution { - the - } { + that applies and
that complies with the requirements of this chapter a + }
certificate of authority to transact business in this state,
provided for in ORS 713.140 to 713.160.
SECTION 288. { + Section 289 of this Act is added to and made
a part of ORS chapter 713. + }
SECTION 289. { + An extranational institution shall not accept
deposits at any office in this state in an amount less than
$100,000, unless the insurable deposits of that office are
insured by the Federal Deposit Insurance Corporation or no such
insurance is required under the Federal Deposit Insurance Act and
the regulations of the Federal Deposit Insurance Corporation
thereunder. + }
SECTION 290. ORS 713.025 is amended to read:
713.025. (1) { + Except as provided in subsection (4) of this
section, + } every extranational institution with one or more
offices in this state shall { - maintain in this state assets
equal to the amount of deposit liabilities of the extranational
institution payable at or through its offices in this state. - }
{ + deposit with the Director of the Department of Consumer and
Business Services in an office located in this state of another
bank approved by the director under an agreement satisfactory to
the director for the protection of depositors of the
extranational institution, free and clear of all other liens and
encumbrances, assets in an amount set forth in subsection (2) of
this section of the following types:
(a) Cash;
(b) Interest-bearing bonds, notes or obligations of the United
States, including those of its agencies and instrumentalities, or
Enrolled Senate Bill 125 (SB 125-B) Page 125
bonds, notes or obligations for which the faith of the United
States is pledged for the payment of the principal and interest;
(c) Bonds or other obligations of the State of Oregon, any
county of this state or any incorporated city, town or school or
port district of this state having a population of not less than
2,000 as shown by the last federal census, or bonds of any other
state, any county, incorporated city, town or school or port
district therein having a population of not less than 25,000, as
shown by the last federal census, if:
(A) The bonds or obligations are issued in compliance with the
constitution and laws of the applicable state;
(B) The bonds or obligations are general obligations of the
state, city, town or school or port district issuing the bonds;
and
(C) There has been no default in payment of either principal or
interest on any of the general obligations of the state, county,
incorporated city, town or school or port district for a period
of five years preceding the date of the deposit;
(d) A surety bond issued by a surety company authorized to
transact business in this state and in a form approved by the
director, under which the principal and surety indemnify the
depositors and creditors of the extranational institution against
loss due to nonpayment by the extranational institution,
including by reason of the failure of the extranational
institution;
(e) An irrevocable letter of credit issued by an insured
institution, as defined in section 3 of this 1997 Act,
satisfactory to the director; or
(f) Any combination of cash, securities complying with
subsection (1)(b) and (c) of this section, surety bonds complying
with subsection (1)(d) of this section, and letters of credit
complying with subsection (1)(e) of this section.
(2) The market value of the assets deposited pursuant to
subsection (1) of this section shall be not less than:
(a) Five percent of the total liabilities of the office
including acceptances, but excluding accrued expenses and amounts
due to and other liabilities of offices, branches, agencies and
subsidiaries of the extranational institution; or
(b) Such other amount as the director may determine to be
necessary for the protection of depositors and the public
interest. + }
{ - (2) As used in this section: - }
{ - (a) 'Assets' include currency, bonds, notes, debentures,
drafts, bills of exchange or other evidences of indebtedness owed
by persons in the United States and collectible in the United
States in currency of the United States or, with prior approval
of the director, in currency freely convertible into currency of
the United States, but do not include prepaid expenses,
customers' liability on acceptances and amounts due from other
offices, agencies or branches of and wholly owned subsidiaries of
the parent institution. For purposes of this section, assets may
also include any assets held in a manner approved by the
director. - }
{ - (b) 'Deposit liabilities' include the total amount of
deposits in offices of the extranational institution in this
state but do not include accrued expenses, amounts due to other
offices, agencies or branches of and wholly owned subsidiaries of
the parent extranational institution, acceptances outstanding and
borrowings. - }
Enrolled Senate Bill 125 (SB 125-B) Page 126
(3) The director shall determine the value of the assets
maintained for the purposes of this section and shall value
marketable securities according to accepted principles of
accounting.
{ + (4) The deposit requirements of subsection (1) of this
section shall not apply to an office of an extranational
institution that is an insured branch as defined in section 3(s)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)). + }
SECTION 291. ORS 713.035 is amended to read:
713.035. If at the close of any banking day an extranational
institution does not have { - in this state - } { + on
deposit + } the assets required to be maintained under ORS
713.025, the managing officer in charge of the { + office of
the + } extranational institution shall immediately notify the
Director { + of the Department of Consumer and Business
Services + } and the main office of the { - parent - }
{ + extranational + } institution of the deficit. The
extranational institution shall have three banking days to
eliminate the deficiency. If the deficiency is not eliminated
within the three-day period, the { + extranational + }
institution is prohibited from { + conducting banking
business, + } making loans, issuing letters of credit or
accepting drafts or bills of exchange and the director may revoke
its certificate of authority.
SECTION 292. ORS 713.045 is amended to read:
713.045. (1) If an extranational institution { - whose
deposit liabilities are not insured to any extent by the Federal
Deposit Insurance Corporation, - } becomes insolvent or goes
into voluntary or involuntary liquidation or cannot otherwise pay
its deposit { + or other + } liabilities, { + the Director of
the Department of Consumer and Business Services may take
possession of + } the assets required to be
{ - maintained - } { + deposited + } under ORS 713.025
{ - shall become the property of the director - } { + directly
or through the appointment of a receiver + }, free of any liens
and other claims { + , + } and { + those assets + } shall be
held by the director { + or receiver + } in trust { - and
applied in the order of priority established in ORS 711.520 - } .
(2) { + Unless the deposited assets are delivered to the
Federal Deposit Insurance Corporation as receiver, + } the amount
available for distribution to the depositors under subsection (1)
of this section shall be allocated to the depositors { - by
dividing the total amount of cash to be distributed by the total
number of depositors. The amount so determined shall be the basic
distribution allocable to each depositor, however, any one
depositor shall not receive an amount in excess of the
depositor's account balances or $20,000 whichever is the
lesser - } { + of the office pro rata to the extent of their
deposits + }.
(3) { - If any cash remains after the basic distribution, the
director shall on a similar basis continue to compute the amount
to be paid to those depositors for whom the first basic
distribution would not permit payment in full - } { + Any
additional deposited assets remaining after the distributions to
depositors provided for in subsection (2) of this section shall
be available for distribution to the other creditors of the
extranational institution in accordance with ORS 711.530 to
711.570 + }.
(4) As used in this section, the term 'depositor' has the
meaning ascribed to it in ORS 711.515.
Enrolled Senate Bill 125 (SB 125-B) Page 127
SECTION 293. ORS 713.090 is amended to read:
713.090. { + (1) + } Every { - foreign institution - }
{ + out-of-state state bank + } and { + every + } extranational
institution { + conducting banking business in this state + }
shall file reports under oath with the Director { + of the
Department of Consumer and Business Services + } in the form and
giving the information the director may require.
{ + (2) Every out-of-state state bank and extranational
institution conducting banking business shall be subject to the
fee provided in ORS 706.530 and to examination and regulation in
the manner provided in ORS 706.805. + }
SECTION 294. ORS 713.130 is amended to read:
713.130. (1) The Director { + of the Department of Consumer
and Business Services + } shall not issue a certificate of
authority to { - a foreign institution - } { + an
out-of-state state bank + } or extranational institution if the
{ - corporate - } name of the { + out-of-state state bank or
extranational + } institution does not conform to ORS 707.075,
except as provided in subsection (2) of this section.
(2) If the { - corporate - } { + director determines that
the + } name of the applicant { - foreign institution - }
{ + out-of-state state bank + } or extranational institution is
deceptively similar to { - a corporate or limited partnership
name or assumed business name, including any reserved name or
registered corporate name of active record with the Secretary of
State or the director - } { + the name of another financial
institution conducting a banking business in this state + }, the
director shall not issue a certificate of authority to the
applicant unless the { - foreign institution - }
{ + out-of-state state bank + } or extranational institution
states the corporate name on the application for a certificate of
authority under ORS 713.140 (1)(a) { + and in the filings
required by ORS 713.140 (3) + } as { + ' + } ______ (name
under which { - incorporated - } { + organized + }), an
institution of _____ (place of { - incorporation - } { +
organization + }), { + ' + } the entirety of which shall be the
'real and true name' of the { + out-of-state state bank or
extranational + } institution under ORS chapter 648.
{ + (3) Nothing contained in this section shall preclude an
out-of-state state bank or extranational institution from
transacting business under one or more assumed business names, if
the names meet the requirements of subsection (1) of this
section, unless the director determines that the names will be
confusingly similar to any financial institution, corporate,
professional corporate, nonprofit corporate, cooperative, limited
liability company, limited partnership, business trust, reserved
or registered name currently on file with the Secretary of State
or Director of the Department of Consumer and Business Services,
or an assumed business name registered as provided in ORS
648.010. The name designated under this section shall be
accorded the same legal effect under ORS 707.075 and ORS chapters
647 and 648 as the name of an Oregon state bank. Issuance of the
certificate of authority shall not abrogate or limit the law as
to unfair competition or unfair trade practices or derogate from
the common law, the principles of equity or the statutes of this
state or of the United States with respect to the right to
acquire and protect trade names, trademarks and service
marks. + }
SECTION 295. ORS 713.140 is amended to read:
713.140. (1) To procure a certificate of authority to
Enrolled Senate Bill 125 (SB 125-B) Page 128
{ - transact - } { + conduct banking + } business in this
state, { - a foreign institution - } { + an out-of-state
state bank + } or extranational institution shall apply to the
Director { + of the Department of Consumer and Business
Services + }. The application shall state:
(a) The { - corporate - } name as designated under ORS
713.130.
(b) The state or country under the laws of which the { +
out-of-state state bank or extranational + } institution was
{ - incorporated - } { + organized + }.
(c) The date of { - incorporation - } { + organization + }.
(d) The period of duration of the { + out-of-state state bank
or extranational + } institution, if the duration is not
perpetual.
(e) A mailing address to which the director may send notices.
(f) The address of the { - principal - } { + main + }
office of the { + out-of-state state bank or extranational + }
institution in the state or country under the laws of which it is
{ - incorporated - } { + organized + }.
(g) { + Unless the out-of-state state bank or extranational
institution is a corporation, limited partnership, limited
liability company or business trust, + } the street address of
the proposed registered office of the institution in this state,
and the name of its proposed registered agent, who shall be
amenable to service of process at the address.
{ - (h) A brief statement of the character of business it
proposes to conduct in this state. - }
{ - (i) - } { + (h) + } The names and respective addresses
of the president and secretary of the { + out-of-state state
bank or extranational + } institution.
{ - (j) - } { + (i) + } Any additional information
{ - which - } { + that + } the director may by rule require.
(2) The director may prescribe and furnish forms for the
application. The president or a vice president and secretary or
an assistant secretary of the { - foreign institution - }
{ + out-of-state state bank + } or extranational institution
shall { - verify and - } sign the application.
{ + (3) The out-of-state state bank or extranational
institution shall also take the steps necessary to become
authorized to transact business:
(a) If a corporation, as a foreign corporation under ORS
chapter 60;
(b) If a limited partnership, as a foreign limited partnership
under ORS chapter 70;
(c) If a limited liability company, as a foreign limited
liability company under ORS chapter 63; or
(d) If a business trust, as a business trust under ORS 128.560
to 128.600.
(4) If the out-of-state state bank is an unincorporated
company, partnership or association, it shall register its name
as an assumed business name as provided in ORS chapter 648. + }
SECTION 296. ORS 713.150 is amended to read:
713.150. (1) The { - foreign institution - }
{ + out-of-state state bank + } or extranational institution
shall submit { - for filing - } { + the application for a
certificate of authority, together with an application fee of
$500, + } to the Director { - one original and one true copy of
the application of the institution for a certificate of
authority - } { + of the Department of Consumer and Business
Services for filing + }. The { + out-of-state state bank or
Enrolled Senate Bill 125 (SB 125-B) Page 129
extranational + } institution shall { + also + } deliver with
the completed application a certificate of existence or a
document of similar import, duly authenticated by the official
with custody of { - corporate - } records in the state or
country under whose law it is { - incorporated - } { +
organized and a copy of the documents filed to comply with ORS
713.140 (3) evidencing filing of such documents by the Secretary
of State + }.
(2) If the director finds that such application conforms to
this chapter, the director, when all fees and charges have been
paid, shall issue and return to the sender a certificate of
authority to { - transact - } { + conduct banking + }
business in this state with the copy of the filed application.
SECTION 297. ORS 713.160 is amended to read:
713.160. { - (1) - } Upon the issuance of a certificate of
authority by the Director { + of the Department of Consumer and
Business Services + }, the { - foreign institution - }
{ + out-of-state state bank + } or extranational institution
shall be authorized to
{ - transact - } { + conduct a banking business + } in this
state { - business of the character that it stated in its
application - } , subject, however, to the right of this state to
suspend or revoke the authority as provided in ORS 713.230.
{ - (2) Until the director has deemed the certificate of
authority revoked or withdrawn, a foreign institution or
extranational institution that has received a certificate of
authority shall, except as otherwise provided in this chapter, be
subject to the same duties, restrictions, penalties and
liabilities now or hereafter imposed upon an institution
organized under the Bank Act. - }
{ - (3) The corporate name designated under ORS 713.130 shall
be accorded the same legal effect under ORS 707.075 and ORS
chapters 647 and 648 as the corporate name of an institution
organized under the Bank Act. Issuance of the certificate of
authority shall not abrogate or limit the law as to unfair
competition or unfair trade practices or derogate from the common
law, the principles of equity or the statutes of this state or of
the United States with respect to the right to acquire and
protect trade names. - }
SECTION 298. ORS 713.170 is amended to read:
713.170. Each { - foreign institution - } { + out-of-state
state bank + } and each extranational institution authorized to
{ - transact - } { + conduct banking + } business in this
state shall have and continuously maintain in this state:
(1) A registered office { - which - } { + that + } may be,
but need not be, the same as its place of business in this state.
(2) A registered agent { - , which agent may be either an
individual resident in this state whose business office is
identical with such registered office, or a domestic corporation,
or a foreign corporation authorized to transact business in this
state having a business office identical with such registered
office - } { + or authorized representative, in compliance with
the requirements imposed by ORS 713.140 (3) + }.
SECTION 299. ORS 713.190 is amended to read:
713.190. (1) The registered agent appointed by { - a foreign
institution - } { + an out-of-state state bank + } or
extranational institution authorized to transact business in this
state shall be an agent of such institution upon whom any
process, notice or demand required or permitted by law to be
served upon the institution may be served.
Enrolled Senate Bill 125 (SB 125-B) Page 130
(2) The Director { + of the Department of Consumer and
Business Services + } shall be an agent of { - a foreign
institution - } { + an out-of-state state bank + } or
extranational institution upon whom any process, notice or demand
may be served, if:
(a) The { + out-of-state state bank or extranational + }
institution is authorized to { - transact - } { + conduct
banking + } business in this state, and:
(A) It fails to appoint or maintain a registered agent in this
state;
(B) Its registered agent cannot with reasonable diligence be
found at the registered office; { - or - }
(C) Its certificate of authority has been suspended or
revoked; { + or
(D) It is an unincorporated company, partnership or
association; + }
(b) The { + out-of-state state bank or extranational + }
institution is { - transacting - } { + conducting banking + }
business in this state without the authorization provided by this
chapter;
(c) The { + out-of-state state bank or extranational + }
institution has been authorized to { - transact - }
{ + conduct banking + } business in this state and has withdrawn
and consented to service on the director as prescribed in this
chapter; or
(d) The { + out-of-state state bank or extranational + }
institution has { - transacted - } { + conducted banking + }
business in this state without the authorization to do so, has
ceased to { - transact - } { + conduct banking + } business
and has become subject to service on the director as prescribed
in this chapter.
(3) Except as provided in subsection (4) of this section,
service on the director of any such process, notice or demand
shall be made by:
(a) Service on the director or a clerk on duty in any office of
the director of a copy of the process, notice or demand with any
papers required by law to be delivered in connection with the
service, or by mailing to the director a copy of the process,
notice or demand by certified or registered mail, and a $2 fee
for each document being served; or
(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 { - foreign
institution - } { + out-of-state state bank + } or
extranational institution being served by certified or registered
mail:
(A) At the last-registered office of the { + out-of-state
state bank or extranational + } institution as shown by the
records of the director;
(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
compliance with this section.
(4) When the { - foreign institution - } { + out-of-state
state bank + } or extranational institution that is being served
with the process, notice or demand is not authorized to
{ - transact - } { + conduct banking + } business in this
Enrolled Senate Bill 125 (SB 125-B) Page 131
state and was not authorized to { - transact - } { + conduct
banking + } business in this state at the time the transaction,
event or occurrence upon which the suit or proceeding is based
occurred, service shall be made in the same manner as provided in
subsection (3) of this section, except that the copy of the
process, notice or demand shall be sent forthwith by registered
or certified mail by the plaintiff or the attorney of the
plaintiff to the principal office or place of business of the
{ + out-of-state state bank or extranational + } institution,
instead of the last-registered office of the { + out-of-state
state bank or extranational + } institution.
(5) 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 { - a foreign
institution - } { + an out-of-state state bank + } or
extranational institution 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 300. ORS 713.200 is amended to read:
713.200. (1) { + Every out-of-state state bank and every
extranational institution that has been issued a certificate of
authority to conduct banking business in this state shall deliver
to the Director of the Department of Consumer and Business
Services, promptly after filing with the Secretary of State, all
documents filed by the out-of-state state bank or extranational
institution with the Secretary of State pursuant to ORS chapters
60, 63, 70 and 648 and ORS 128.560 to 128.600.
(2) + } If { - a foreign institution - } { + an
out-of-state state bank + } or an extranational institution
{ - authorized to transact business - } { + that has been
issued a certificate of authority to conduct banking business + }
in this state changes its { - corporate - } name or duration,
it shall apply to the director to amend its certificate of
authority.
{ - (2) - } { + (3) + } The requirements in respect to the
form and contents of the application, the manner of its signing
and the submission of the { - original - } application
{ - and a true copy of the application with - } { + referred
to in subsection (2) of this section to + } the director shall be
the same as in the case of an original application for a
certificate of authority under ORS 713.140. The filing of the
application for the amended certificate of authority by the
director shall have the same legal effect as the filing of the
original certificate of authority.
SECTION 301. ORS 713.210 is amended to read:
713.210. (1) { - A foreign institution - } { + An
out-of-state state bank + } or extranational institution
{ - authorized to transact business - } { + that has been
issued a certificate of authority to conduct banking business + }
in this state may withdraw from this state by applying to the
Director { + of the Department of Consumer and Business
Services + } to withdraw. An application to withdraw shall set
forth:
(a) The name of the { + out-of-state state bank or
extranational + } institution and the state or country under the
laws of which it is
{ - incorporated - } { + organized + }.
Enrolled Senate Bill 125 (SB 125-B) Page 132
(b) A statement that the { + out-of-state state bank or
extranational + } institution no longer { - transacts - }
{ + conducts banking + } business in this state.
(c) A statement that the { + out-of-state state bank or
extranational + } institution surrenders its authority to
{ - transact - } { + conduct banking + } business in this
state.
(d) A statement that the { + out-of-state state bank or
extranational + } institution revokes the authority of its
registered agent in this state to accept service of process,
notice or demand and consents that service of process, notice or
demand in any action, suit or proceeding based upon any
transaction, event or occurrence which took place in this state
prior to the filing of the application to withdraw may thereafter
be made on such { + out-of-state state bank or
extranational + } institution by service thereof on the director.
(e) A mailing address to which the person initiating any
proceedings may mail a copy of any process, notice or demand,
which has been served on the director, to the { + out-of-state
state bank or extranational + } institution.
(f) Such additional information as may be necessary or
appropriate to enable the director to determine and assess any
unpaid fees or charges payable by such { + out-of-state state
bank or extranational + } institution as prescribed in the Bank
Act.
(2) The application for withdrawal may be made on forms
prescribed or furnished by the director and shall be signed by
the { + out-of-state state bank or extranational + }
institution by its president or a vice president and by its
secretary or an assistant secretary, and verified by one of the
officers signing the application or, if the { + out-of-state
state bank or extranational + } institution is in the hands of a
receiver or trustee, shall be signed on behalf of the institution
and verified by the receiver or trustee.
(3) { - A foreign institution - } { + An out-of-state state
bank + } or extranational institution { - which transacted - }
{ + that conducted banking + } business in this state without
the authorization provided by this chapter will be subject to
service after it has ceased to
{ - transact - } { + conduct banking + } business in this
state in the same manner as though it had been authorized to
{ - transact - } { + conduct banking + } business, had later
withdrawn and, in connection with such withdrawal, had filed a
consent to service in the manner required by subsection (1)(d) of
this section.
SECTION 302. ORS 713.220 is amended to read:
713.220. (1) { - One original and one true copy of such - }
{ + The + } application to withdraw shall be delivered to the
Director { + of the Department of Consumer and Business
Services + }. If the director finds that such application
conforms to the provisions of this chapter, the director, when
all fees and charges have been paid, shall file the application
to withdraw and return the copy marked ' Filed' to the sender.
(2) Upon the filing of the application to withdraw, the
authority of the { - foreign institution - } { + out-of-state
state bank + } or extranational institution to { - transact - }
{ + conduct banking + } business in this state shall cease.
SECTION 303. ORS 713.230 is amended to read:
713.230. The certificate of authority of { - a foreign
institution - } { + an out-of-state state bank + } or
Enrolled Senate Bill 125 (SB 125-B) Page 133
extranational institution to { - transact - } { + conduct
banking + } business in this state may be revoked when:
(1) The { + out-of-state state bank or extranational + }
institution has not filed any report which it is required to file
under the Bank Act or has not paid any fee which it is required
to pay under the Bank Act;
(2) The { + out-of-state state bank or extranational + }
institution has failed to appoint or maintain a registered agent
or office in this state as required by ORS 713.170 { + or has
failed to maintain authority to transact business as required by
ORS 713.140 (3) + };
(3) The { + out-of-state state bank or extranational + }
institution has changed its registered office or registered agent
and has failed to submit to the Director { + of the Department
of Consumer and Business Services + } a statement of the change
as required by { - this chapter - } { + ORS 713.200 (1) + };
(4) A misrepresentation has been made of any material matter in
any application, report, affidavit or other document submitted by
such { + out-of-state state bank or extranational + }
institution pursuant to the Bank Act;
(5) The { + out-of-state state bank or extranational + }
institution has failed to submit for filing an application to
amend its certificate of authority as required by ORS
713.200 { + (2) + }; or
(6) The { + out-of-state state bank or extranational + }
institution has failed to submit for filing a certificate of
merger or consolidation as required by ORS 713.260.
SECTION 304. ORS 713.240 is amended to read:
713.240. (1) Whenever { - a foreign institution - } { + an
out-of-state state bank + } or extranational institution has
given cause for revocation of its certificate of authority as
provided in ORS 713.230 and has failed to correct the neglect,
omission, misrepresentation or delinquency, the Director { + of
the Department of Consumer and Business Services + } may revoke
the right of the { + out-of-state state bank or
extranational + } institution to { - transact - } { + conduct
banking + } business in this state. The director shall mail a
notice of the revocation to the mailing address shown for the
{ + out-of-state state bank or extranational + } institution in
the current records of the director to the { + out-of-state
state bank or extranational + } institution at its registered
office in this state or its principal office in its home state.
(2) After the director revokes the certificate of authority,
all powers that this state conferred upon the { - foreign
institution - } { + out-of-state state bank + } or
extranational institution shall cease, and thereafter no person
shall exercise or attempt to exercise in this state any power
under the revoked certificate of authority.
(3) Whenever it is established to the satisfaction of the
director that any { - foreign institution - }
{ + out-of-state state bank + } or extranational institution,
the certificate of authority of which has been revoked under
subsection (1) of this section { - or by proclamation of the
Governor under any prior law or by operation of any prior law - }
, has corrected the cause for revocation, the director shall
restore the { + out-of-state state bank or extranational + }
institution to all its former rights and privileges in the same
manner as the director revoked the authority of the { +
out-of-state state bank or extranational + } institution.
Enrolled Senate Bill 125 (SB 125-B) Page 134
(4) Any { - foreign institution - } { + out-of-state state
bank + } or extranational institution previously authorized to
{ - transact - } { + conduct banking + } business in this
state that has had its certificate of authority revoked and that
has corrected the cause for revocation under subsection (1) of
this section may apply for reinstatement of its certificate of
authority { + within two years of the date of revocation + }.
The { - foreign corporation - } { + out-of-state state
bank + } or extranational institution shall pay all fees which
accrued before the director revoked the certificate of authority
and a reinstatement filing fee of $100. The payment shall
accompany the application for reinstatement. If the director is
satisfied that the cause for revocation has been corrected, the
director shall file the application for reinstatement of the
{ + out-of-state state bank or extranational + } institution,
entitling it to resume its business in this state. The director
shall not file the application for reinstatement unless the
{ - corporate - } name of the { + out-of-state state bank or
extranational + } institution conforms to ORS 713.130 { + and
the application is filed within two years of the date of
revocation + }.
(5) Reinstatement under this section relates back to and takes
effect as of the effective date of the revocation of the
certificate of authority, so that the existence of the { +
out-of-state state bank or extranational + } institution is
deemed to have continued without interruption from that date.
{ - (6) The reinstated institution is not relieved by reason
of the reinstatement from any penalty of forfeiture of its powers
as a body corporate in case of its failure to pay subsequently
accruing licenses and taxes imposed by any law of this state. - }
{ - (7) Nothing contained in this section shall be construed
to affect any suit brought for any liability against the
stockholders or officers of any institution, to revive any
charter of foreign institutions or extranational institutions
previously dissolved or annulled, or to make valid any defective
organization of any institution. - }
{ - (8) Suits and actions upon choses in action arising out
of contracts sold or assigned by any foreign institution or
extranational institution, the right of which to transact
business in this state has been revoked under subsection (1) of
this section, may be brought or prosecuted in the name of the
purchaser or assignee. The fact of sale or assignment and of
purchase by the plaintiff shall be set forth in the writ or other
process. The defendant may rely on any matter of defense which
the defendant might have relied on in a suit upon the claim by
the foreign institution or extranational institution, had its
right to transact business in this state not been revoked. - }
SECTION 305. ORS 713.250 is amended to read:
713.250. (1) No { - foreign institution - }
{ + out-of-state state bank + } or extranational institution
{ - transacting - } { + conducting banking + } business in
this state without a certificate of authority shall be permitted
to maintain any action, suit or proceeding in any court of this
state until such { + out-of-state state bank or
extranational + } institution shall have obtained a certificate
of authority. { - Nor shall any action, suit or proceeding be
maintained in any court of this state by any successor or
assignee of such institution on any right or demand arising out
of the transaction of business by such institution in this state
Enrolled Senate Bill 125 (SB 125-B) Page 135
until a certificate of authority shall have been obtained by such
institution or by an institution which has acquired all or
substantially all of its assets. - }
(2) The failure of { - a foreign institution - } { + an
out-of-state state bank + } or extranational institution to
obtain a certificate of authority to { - transact - }
{ + conduct banking + } business in this state shall not impair
the validity of any contract or act of such { + out-of-state
state bank or extranational + } institution, and shall not
prevent such { + out-of-state state bank or extranational + }
institution from defending any action, suit or proceeding in any
court of this state.
(3) { - A foreign institution - } { + An out-of-state state
bank + } or extranational institution { - which transacts - }
{ + that conducts banking + } business in this state without a
certificate of authority shall be liable to this state for the
years or parts thereof during which it { - transacted - }
{ + conducted banking + } business in this state without a
certificate of authority in an amount equal to all fees { + ,
assessments + } and { + other + } charges which would have been
imposed upon the { + out-of-state state bank or
extranational + } institution under the Bank Act had it duly
applied for and received a certificate of authority to
{ - transact - } { + conduct banking + } business in this
state as required by this chapter and thereafter filed all
reports required by the Bank Act, plus all penalties imposed
under the Bank Act for failure to pay such fees and charges. The
Attorney General { - shall - } { + may + } bring proceedings
to recover all amounts due this state under the provisions of
this section.
SECTION 306. ORS 713.260 is amended to read:
713.260. { - (1) - } Whenever { - a foreign
institution - } { + an out-of-state state bank + } or
extranational institution { - authorized to transact business
in this state - } { + that has been issued a certificate of
authority under ORS 713.020 + } ceases to exist because of a
statutory merger or consolidation with any other { - foreign
institution - } { + out-of-state state bank + }, extranational
institution or other { - foreign corporation - } { +
entity + }, it shall, within 60 days after the effective date of
such merger or consolidation, file with the Director { + of the
Department of Consumer and Business Services + } a certificate
from the appropriate public officer of the state, territory or
country under the laws of which it is organized { + , or other
evidence satisfactory to the director, + } to the effect that
such { + out-of-state state bank or extranational + }
institution has merged or consolidated and has thereby ceased to
exist.
{ - (2) There shall be no charge for filing the
certificate. - }
SECTION 307. { + Section 308 of this Act is added to and made
a part of ORS chapter 713. + }
SECTION 308. { + The Director of the Department of Consumer
and Business Services may impose on any person violating any
provision of this chapter a civil penalty of up to $1,000 for
each day during which the offense continues. The penalty shall be
assessed and collected in the manner prescribed in ORS 706.570
(2). + }
Enrolled Senate Bill 125 (SB 125-B) Page 136
{ +
AMENDMENTS TO ORS CHAPTER 714 + }
{ +
(ATMs and Night Deposit Facilities) + }
SECTION 309. ORS 714.210 is amended to read:
714.210. (1) A banking institution, through its own facilities
or those of { - a corporation - } { + an entity + } described
in { - ORS 714.240 - } { + section 127 of this 1997 Act + },
may make available for use by its customers { + and others + }
one or more ATMs. { - An ATM may receive or dispense cash,
provide information and initiate transactions in accordance with
the request or instruction of the customer or the customer's
agent. - } Every transaction initiated through an ATM shall be
subject to verification by the banking institution either by
direct wire transmission or otherwise.
(2) { - ORS 714.040 to 714.110 do - } { + Section 313 of
this 1997 Act does + } not apply to the establishment and
maintenance of ATMs
{ - pursuant to ORS 706.005, 714.200 to 714.992 and 716.645 or
714.065 prior to its repeal by section 13, chapter 193, Oregon
Laws 1975 - } .
SECTION 310. ORS 714.270 is amended to read:
714.270. No person shall use or attempt to use an ATM facility
for the purpose of obtaining any information concerning
{ - the - } { + an + } account or line of credit { - of a
customer with a banking institution - } { + other than the
person's own account or line of credit + } without the prior
approval of { - the customer - } { + an authorized signer on
the account or line of credit + }. No person having received
prior approval of the customer shall utilize such authority to
obtain through the use of the ATM any information not necessary
to the transaction which the customer seeks to accomplish through
its use.
SECTION 310a. { + Section 310b of this Act is added to and
made a part of ORS chapter 714. + }
SECTION 310b. { + (1) If the operator of an ATM charges a fee
to any person to use the ATM, the operator shall disclose to
persons using the ATM that a fee will be imposed for the ATM
transaction.
(2) Subject to subsection (3) of this section, the disclosure
required under subsection (1) of this section shall be made
electronically during the ATM transaction and shall allow the
person who will be charged a fee to cancel the ATM transaction
without incurring a fee. The disclosure shall also be printed on
the ATM transaction receipt.
(3) The Director of the Department of Consumer and Business
Services may adopt rules conforming the disclosure requirements
of subsection (2) of this section to disclosure requirements
contained in:
(a) Any law enacted by the Congress of the United States; or
(b) Any regulation adopted by any federal agency having
regulatory authority over ATMs. + }
SECTION 310c. { + Section 310b of this Act applies to ATM
transactions entered into on or after the effective date of this
Act. + }
{ +
(Branches of Banking Institutions) + }
Enrolled Senate Bill 125 (SB 125-B) Page 137
SECTION 311. { + Sections added to chapter 714. Sections 312
to 325 of this Act are added to and made a part of ORS chapter
714. + }
SECTION 312. { + Branches not in compliance with chapter
prohibited. Banking institutions shall not establish or maintain
branches except as expressly authorized in sections 313 to 323 of
this 1997 Act. + }
SECTION 313. { + Application required to establish branches in
Oregon or outside of Oregon; fee. (1) A banking institution may
establish and operate one or more branches within or outside the
State of Oregon. The board of directors of a banking institution
desiring to establish a branch shall file an application with the
Director of the Department of Consumer and Business Services. The
application shall be in the form the banking institution is
required to file with the Federal Reserve System or the Federal
Deposit Insurance Corporation to establish a branch at such
location, as the case may be, or in such other form as the
director may require. The application shall be accompanied by a
$500 fee, which fee shall only apply to the establishment of new
branches and not to the acquisition or relocation of existing
branches. The director shall promptly advise the banking
institution if the application is incomplete or if the director
requires additional information.
(2) Mobile banking facilities described in section 314 of this
1997 Act and temporary branches are considered branches for
purposes of this section. A temporary branch is a branch that
operates for a period not to exceed 60 days, which period shall
not be extended. The application fee for a temporary branch shall
be $100. The director may establish rules regarding temporary
branches.
(3) Branches to be located in other countries or to be located
in dependencies or insular possessions of the United States are
subject to the requirements of this section and section 315 of
this 1997 Act. + }
SECTION 314. { + Mobile banking facilities. A banking
institution may, in accordance with section 313 of this 1997 Act,
establish one or more mobile facilities to engage in the banking
business or to transact trust business. Mobile banking facilities
may operate within the State of Oregon and in other states. An
application under section 313 of this 1997 Act shall not be
required for mobile facilities that exercise permissible powers
or engage in permissible activities that do not constitute
engaging in the banking business or transacting trust business.
The application fee for each facility is $500. + }
SECTION 315. { + Application to establish foreign branches;
furnishing information; examination; rules. (1) A banking
institution may establish branches in foreign countries or
dependencies or insular possessions of the United States in
accordance with section 313 of this 1997 Act if it possesses
stockholder's equity of at least $1 million.
(2) A banking institution operating such branches shall furnish
information concerning the condition of the branches to the
Director of the Department of Consumer and Business Services upon
demand.
(3) The director may order special examinations of such
branches.
(4) The director may promulgate rules regarding such branches
pursuant to ORS 183.310, 183.315, 183.330, 183.335, 183.341 and
183.410. + }
Enrolled Senate Bill 125 (SB 125-B) Page 138
SECTION 316. { + Investigating applications; soliciting
comments. (1) The Director of the Department of Consumer and
Business Services shall investigate each application to establish
a branch. With respect to applications covering branches to be
located outside the State of Oregon, the director shall promptly
provide the local bank supervisory agency or regulator with a
copy of the application and an opportunity to comment on the
application. The director shall not be bound by any such
comments.
(2) In determining whether to approve or disapprove an
application to establish a branch, the director shall consider
such factors as the director deems appropriate, including the
likely impact of the branch on the safety and soundness of the
banking institution, the adequacy of the capital of the banking
institution, the institution's record of complying with
applicable law, and the results of supervisory examinations of
the banking institution.
(3) The director's decision to disapprove an application is
subject to appeal in the manner provided in ORS 707.080 for the
organization of an institution. + }
SECTION 317. { + Application deemed approved. With respect to
applications to establish branches in the State of Oregon or in a
state outside of the State of Oregon, the Director of the
Department of Consumer and Business Services may approve or
disapprove the application, provided however, that failure to
disapprove an application within 30 days after receipt of a
complete application shall be deemed an approval of the
application. With respect to applications by banking institutions
to establish branches in foreign countries or dependencies or
insular possessions of the United States, the director may
approve or disapprove an application, provided however, that
failure to disapprove an application within 90 days after receipt
of a complete application shall be deemed an approval of the
application. + }
SECTION 318. { + Certificate authorizing branch to conduct
business. Upon the request of a banking institution, the Director
of the Department of Consumer and Business Services shall issue
and deliver a certificate authorizing each approved branch to
conduct business. + }
SECTION 319. { + Time to commence business. A branch shall
commence business within one year after the application for the
branch has been approved or deemed approved by the Director of
the Department of Consumer and Business Services. The director
may extend the period within which the branch may open up to one
additional year. If a branch fails to commence business within
the year or any extension of time granted by the director, the
approval of the application shall be deemed withdrawn and the
branch may not open or operate. + }
SECTION 320. { + Activities and powers at branches outside
this state. (1) A banking institution may exercise the same
powers and engage in the same activities at a branch or branches
located in states outside this state as are permitted the banking
institution within this state.
(2) A banking institution may exercise the same powers and
engage in the same activities at a branch or branches located in
foreign countries and dependencies or insular possessions of the
United States as are permitted the banking institution within
this state and in addition may exercise such additional powers as
are permitted to such branches under 12 C.F.R. 211.3(b), 12
C.F.R. 347.3(c) and other applicable federal law. This
Enrolled Senate Bill 125 (SB 125-B) Page 139
subsection shall not be construed to permit a banking institution
that opens, occupies or maintains one or more branches in a
foreign country or dependency or insular possession of the United
States to use the branch or branches or engage in any activities
within this state that are not permitted to the banking
institution under the laws of this state. + }
SECTION 321. { + Reports of deposits of branches. Upon the
call for a report of condition by the Director of the Department
of Consumer and Business Services:
(1) Each Oregon commercial bank and Oregon savings bank shall
report to the director the total deposits held at each of its
branches; and
(2) Each non-Oregon institution and each federal bank that in
either case holds deposits of the State of Oregon or any
political subdivision thereof, or that underwrites bonds or other
debt instruments issued by the state or any political subdivision
thereof, shall report to the director the total deposits held at
each of its branches located in the State of Oregon. + }
SECTION 322. { + Closure and relocation of branches. A banking
institution may close and relocate branches provided the banking
institution provides the Director of the Department of Consumer
and Business Services with a copy of any notice required under 12
U.S.C. 1831r-1(a), or comparable federal law, at the time and in
the form required by such law or laws. + }
SECTION 323. { + Penalty. Each day a banking institution
operates a branch that has not been approved or deemed approved
by the Director of the Department of Consumer and Business
Services, the banking institution is subject to a penalty of up
to $1,000. The penalty shall be assessed and collected as
prescribed in ORS 706.570 (2). + }
{ +
(Oregon Branches of Out-of-State Banks + }
{ +
and Extranational Institutions) + }
SECTION 324. { + Establishment of branches by out-of-state
banks in this state; powers and activities at such branches. (1)
An out-of-state bank may occupy and maintain its initial branches
in this state if and only if the branches are acquired by the
out-of-state bank in accordance with ORS chapters 711 and 713.
(2) An out-of-state bank that is properly occupying and
maintaining one or more branches in Oregon in accordance with ORS
chapters 711 and 713 may thereafter open, occupy and maintain one
or more additional branches in this state. The out-of-state bank
shall not be required to file an application under section 313 of
this 1997 Act to establish such additional branches.
(3) An out-of-state bank that acquires branches in accordance
with ORS chapters 711 and 713 shall be entitled to exercise
powers and engage in activities at its branches in this state as
provided in 713.010 and applicable federal law. + }
SECTION 325. { + Establishment of branches by extranational
institutions in this state; powers and activities at such
branches. (1) An extranational banking institution may occupy and
maintain branches in this state as permitted by ORS chapter 713
and applicable federal law.
(2) An extranational banking institution may exercise powers
and engage in activities at branches located in this state as
permitted by ORS chapter 713 and applicable federal law. + }
Enrolled Senate Bill 125 (SB 125-B) Page 140
{ +
AMENDMENTS TO ORS CHAPTER 715 + }
SECTION 326. ORS 715.045 is amended to read:
715.045. (1) The Director { + of the Department of Consumer
and Business Services + } may examine the books, accounts,
records and files of a bank holding company { + of an Oregon
stock bank + } when the director considers it necessary to
evaluate the { - relationship between a bank and - }
{ + condition of the Oregon stock bank that is a subsidiary
of + } the bank holding company.
(2) The bank holding company examined shall pay to the director
the actual cost of the examination { + , as determined by the
director + }.
SECTION 327. ORS 715.055 is amended to read:
715.055. (1) A bank holding company { + of an Oregon stock
bank + } shall submit to the Director { - a report of the
condition of the bank holding company within 90 days after close
of the fiscal year for the bank holding company - } { + of the
Department of Consumer and Business Services copies of all
reports that the bank holding company is required to submit to
the Federal Reserve Board. The copies shall be submitted to the
director within the time periods required by applicable federal
law and regulation for the filing of the originals with the
Federal Reserve Board + }.
{ - (2) The bank holding company shall include in the report
of condition information which the director considers necessary
to disclose fully the relations between the bank holding company
and the bank it controls. - }
{ - (3) - } { + (2) + } The director may call for
{ - reports of condition - } { + additional information + }
from a bank holding company, in such form as the director may
prescribe { + by rule or order + }, if the director considers it
necessary in order to obtain { - a - } full knowledge of the
condition of the { + Oregon stock + } bank which the bank
holding company controls. The bank holding company shall submit
the report to the director within { - 45 days after receiving
the call from - } { + the time period prescribed by + } the
director.
{ - (4) A bank holding company may in lieu of all the reports
called for in this section, submit to the director a copy of the
report furnished by the holding company to the Federal Reserve
Bank under the provisions of Regulation Y of the Board of
Governors of the Federal Reserve System and any additional
information the director may require. - }
{ - (5) - } { + (3) + } If a bank holding company fails to
submit a report
{ - of condition - } { + or additional information + } as
required by this section, the bank holding company shall pay to
the director a penalty of { - $100 - } { + up to $1,000 + }
for each day it fails to comply. If the bank holding company
delays or refuses to pay the penalty upon demand by the director,
the director may maintain an action in the director's name
against the delinquent bank holding company for the recovery of
the penalty.
SECTION 328. { + Sections 329 to 330a of this Act are added to
and made a part of ORS chapter 715. + }
SECTION 329. { + (1) If a company proposes to become a bank
holding company of an Oregon stock bank, when the company files
its application and any related materials with the Federal
Enrolled Senate Bill 125 (SB 125-B) Page 141
Reserve Board, the company shall submit to the Director of the
Department of Consumer and Business Services copies of the
application and related materials.
(2) The director may submit comments and recommendations for
approval or disapproval to the Federal Reserve Board concerning
any application to become a bank holding company of an Oregon
stock bank that is filed with the Federal Reserve Board.
(3) Following the filing of an application to become a bank
holding company and the submission to the director of the
materials described in subsection (1) of this section, the
company shall submit to the director copies of any written
communications between itself and the Federal Reserve Board that
relate to the application, including copies of any written
approval or denial of the application. A copy of each such
written communication shall be submitted to the director within
10 days after the original thereof is sent or received by the
company. + }
SECTION 330. { + An out-of-state bank holding company may
become the bank holding company of:
(1) An Oregon stock bank or an in-state federal stock bank, by
itself or together with any predecessor, only if the Oregon stock
bank or in-state federal stock bank has been engaged in the
business of banking in this state for a period of not less than
three years prior to the date on which the out-of-state bank
holding company becomes the bank holding company of the Oregon
stock bank or in-state federal stock bank.
(2) An Oregon stock bank organized under ORS 707.025 that has
merged with or acquired all or substantially all of the assets
and liabilities of an Oregon stock bank or in-state federal stock
bank, by itself or together with any predecessor, only if the
Oregon stock bank or in-state federal stock bank has been engaged
in the business of banking in this state for a period of not less
than three years prior to the date on which the out-of-state bank
holding company becomes the bank holding company of the Oregon
stock bank. + }
SECTION 330a. { + (1) An Oregon nonstock bank may, pursuant to
rules adopted by the Director of the Department of Consumer and
Business Services, reorganize so that the resulting entities are
an Oregon stock savings bank, controlled by a mutual bank holding
company. For purposes of this section, a 'mutual bank holding
company' is a bank holding company that does not issue capital
stock. The mutual bank holding company shall be mutually owned by
the depositors of the reorganizing Oregon nonstock bank.
(2) A mutual bank holding company may acquire or invest in the
stock of one or more stock savings banks.
(3) A mutual bank holding company may merge with or acquire
another mutual bank holding company.
(4) A mutual bank holding company formed under this section
shall be subject to the provisions of this chapter.
(5) The director is authorized to adopt rules to carry out the
provisions of this section. + }
{ +
AMENDMENTS TO ORS CHAPTER 716 + }
SECTION 331. ORS 716.024 is amended to read:
716.024. (1) The provisions of ORS chapter 706 relating to
financial institutions, the following sections in the Bank Act
and any { - applicable penalties - } { + other provisions of
the Bank Act that by their terms pertain to Oregon savings banks
Enrolled Senate Bill 125 (SB 125-B) Page 142
shall + } apply to { + Oregon + } savings banks: ORS
{ - 706.575, 707.005, 707.010, 707.110 (3) and (5) - } { +
707.075, 707.080, 707.090, 707.100, 707.120, 707.145, 707.150,
707.155 + }, 707.170, 707.180, { - 707.242 - }
{ + 707.252 + }, 707.254,
{ - 707.258, 707.262, 707.266, 707.320, 707.330, 707.340,
707.430, 707.440, 707.612, 707.613 - } { + 707.625 + },
{ - 707.642 to 707.646 - } { + 707.642, 707.646 (1) + },
707.660, 707.670 { + to 707.764 + }, { - 707.675, 707.700 to
707.730, 707.744 to 707.860, 708.025, 708.026, 708.088, 708.205
(2), 708.212, 708.215, 708.225, 708.250, 708.265, 708.272,
708.385, 708.395, 708.410, 708.415, 708.451, 708.480, 708.500 to
708.661, 708.715, 708.720, 708.980, 711.400 - } { + 711.405 + }
to { - 711.615, 711.620 to - } 711.670 { - , - } { +
and + } 711.980 and { - 714.080 - } { + sections 94, 130,
131, 162, 163, 165 to 185, 193, 195, 199 to 201 and 321 of this
1997 Act + }.
(2) In addition to the statutes listed in subsection (1) of
this section, to the extent applicable, the following provisions
of the Bank Act apply to { + Oregon + } stock savings banks: ORS
{ + 707.050, 707.110, 707.140, + } 707.200 to { - 707.240 - }
{ + 707.230 + }, 707.244 to
{ - 707.252 - } { + 707.250 + }, 707.256, { - 707.260,
707.264, 707.268, 707.270, 707.272 (1) to (3) - } { + 707.258
to 707.272 + }, 707.350 { + , + } { - to 707.420 - } { +
707.380 to 707.410 + }, 707.610 { - , 707.611 and 707.615 to
707.620 - } { + to 707.623, 707.644, 707.646 (2) and 707.648
and sections 46 and 77 of this 1997 Act + }.
SECTION 332. ORS 716.028 is amended to read:
716.028. Any number of persons, not less than five,
{ - citizens of the United States and residents of this
state, - } desiring to organize { - a - } { + an Oregon + }
savings bank shall, as prospective incorporators, first file an
application with the Director { + of the Department of Consumer
and Business Services + } for authority to organize { - a - }
{ + an Oregon + } savings bank. The applicants shall pay to the
director at the time of their application a fee of $2,500, no
part of which will be refunded. The application shall be { - in
duplicate on forms provided by the director and shall be
certified - } { + signed + } by one of the applicants. The
following information { - should be specified - } { + and
documents shall be included + } in { + or with + } the
application:
(1) The corporate name.
(2) The proposed location { + of the initial principal place
of business + }.
(3) The name, occupation, residence and post-office address of
each prospective incorporator.
{ + (4) The proposed articles of incorporation.
(a) If the Oregon savings bank is to be organized as an Oregon
stock savings bank, the articles of incorporation shall conform
to the provisions set forth in ORS 707.110.
(b) If the Oregon savings bank is to be organized as an Oregon
nonstock bank, the articles of incorporation shall conform to the
provisions set forth in ORS 716.040. + }
{ - (4) - } { + (5) + } The names { + and residence
addresses + } of the proposed
{ - active managers - } { + senior officers + } and { + the
names, occupations and residence addresses of proposed
initial + } directors.
Enrolled Senate Bill 125 (SB 125-B) Page 143
{ + (6) If the Oregon savings bank is being organized as an
Oregon stock savings bank, the number of shares of voting stock
proposed to be subscribed for by the incorporators and each of
the proposed directors and senior officers, and the names of any
other persons who are expected to subscribe for, to own or to
control more than 10 percent of the voting stock and the amount
of stock for which each proposes to subscribe. + }
{ - (5) - } { + (7) + } Evidence { + satisfactory to the
director + } of the character, financial responsibility and
ability of the prospective incorporators, directors and
{ - manager - } { + senior officers + }.
{ - (6) - } { + (8) + } Evidence { - of the advisability
of granting the authority to organize - } { + satisfactory to
the director, in the form of a business plan and such additional
information as the director may require, demonstrating that the
proposed Oregon savings bank is likely to be financially
successful.
(9) The proposed operating policies of the Oregon savings
bank + }.
{ - (7) - } { + (10) + } Any other information
{ - which - } { + that + } the director may require.
SECTION 333. ORS 716.032 is amended to read:
716.032. The Director { + of the Department of Consumer and
Business Services + } shall investigate and rule on the
application for authority to organize in the manner specified for
institutions in ORS 707.080 { + , 707.090 + } and 707.145.
SECTION 334. ORS 716.040 is amended to read:
716.040. (1) Not less than five persons { - who are citizens
of the United States and residents of this state - } may
associate themselves by articles of incorporation to form { - a
corporation to be known as a 'mutual savings bank.' The - }
{ + 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 { - and
verified - } by the incorporators and { - filed in the office
of - } { + 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 { - savings - } { + 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 name { - , occupation, residence and post-office
address - } of each incorporator.
(d) The term of its existence, which may be perpetual.
{ + (e) The purpose for which it is organized. + }
{ - (e) - } { + (f) + } The sums { - which - }
{ + 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.
{ - (f) - } { + (g) + } The { + initial + } board of
directors of the { - savings - } { + Oregon nonstock
+ }bank { + , + } composed of not less than five { + persons,
Enrolled Senate Bill 125 (SB 125-B) Page 144
at least three of whom shall be + } incorporators, who shall
serve until their successors are regularly elected and qualified.
{ - (3) The articles of incorporation shall also contain the
information required under ORS 60.131. - }
{ - (4) - } { + (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 { - savings - }
{ + 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
{ - 60.047 (2)(d) - } { + 707.110 (5)(c) + }.
SECTION 335. ORS 716.055 is amended to read:
716.055. Before { - a savings - } { + an Oregon
nonstock + } bank may conduct its business, its incorporators
shall create:
(1) A guaranty fund, as provided in ORS 716.060, for the
protection of its depositors against loss on its investments, and
(2) An expense fund, as provided in ORS 716.070, to pay the
expense of organizing the { - savings - } { + Oregon
nonstock + } bank and the operating expenses.
SECTION 336. ORS 716.060 is amended to read:
716.060. (1) The guaranty fund shall consist of payments in
cash made by the { - original - } incorporators and of all
sums credited to the guaranty fund as required by ORS 716.780.
(2) The incorporators shall deposit to the credit of the
{ - savings - } { + Oregon nonstock + } bank in cash as an
initial guaranty fund
{ - an aggregate sum of at least $5,000 - } { + an amount
determined by the Director of the Department of Consumer and
Business Services + }, which is the limit of their liability to
that fund.
(3) Prior to the liquidation of the { - savings - }
{ + Oregon nonstock + } bank, the guaranty fund shall not be
used except for losses and the { - prepayment - }
{ + repayment + } of contributions made by incorporators or
directors as provided in ORS 716.800 (2), until the fund,
together with undivided profits, exceeds 25 percent of the amount
due depositors.
(4) The amounts contributed to the guaranty fund by the
incorporators shall not constitute a liability of the
{ - savings - } { + Oregon nonstock + } bank, except as
provided in this chapter. Any loss sustained by the
{ - savings - } { + Oregon nonstock + } bank in excess of that
portion of the guaranty fund created from earnings may be charged
against the contributions pro rata.
SECTION 337. ORS 716.070 is amended to read:
716.070. (1) The incorporators { + of an Oregon nonstock
bank + } shall create an expense fund by depositing to the credit
of the
{ - savings - } { + Oregon nonstock + } bank in cash
{ - not less than the sum of $5,000 - } { + an amount
determined by the Director of the Department of Consumer and
Business Services + }. They shall also enter into an agreement or
undertaking with the director as trustee for the depositors with
the { - savings - } { + Oregon nonstock + } bank to make
further contributions in cash to the expense fund of the
{ - savings - } { + Oregon nonstock + } bank as may be
necessary to pay the operating expenses until the
{ - savings - } { + Oregon nonstock + } bank can pay them from
its earnings, in addition to the dividends as declared and
Enrolled Senate Bill 125 (SB 125-B) Page 145
credited to its depositors. The agreement or undertaking shall
fix the liability of the incorporators jointly and severally for
a reasonable amount as approved or determined by the director. In
addition to the undertaking of the incorporators, the director
may require a surety bond executed by { - a corporation - }
{ + an entity + } authorized to transact, within this state, the
business of surety, or an irrevocable letter of credit issued by
{ - a commercial bank as defined in ORS 706.005 - } { + an
insured institution, as defined in section 3 of this 1997
Act + }. The agreement or undertaking { - or - } { + and + }
letter of credit { - and security - } { + or surety bond + }
shall be filed in the office of the director.
(2) The amounts contributed to the expense fund of the
{ - savings - } { + Oregon nonstock + } bank by the
incorporators is not a liability of the { - savings - }
{ + Oregon nonstock + } bank except as provided in ORS 716.800.
SECTION 338. ORS 716.080 is amended to read:
716.080. (1) The Director { + of the Department of Consumer
and Business Services + } shall examine the condition of { - a
savings - } { + an Oregon nonstock + } bank when the
{ - savings - } { + Oregon nonstock + } bank files with
{ + or submits to + } the director:
(a) A copy of its articles of incorporation, as required by ORS
716.040;
(b) A list of incorporators, showing name, address, sums paid
into the guaranty and expense fund, sworn to by the president or
cashier;
(c) The sworn statement of an officer that all requirements of
law have been complied with; { + and + }
(d) A list of the directors and officers elected { + . + }
{ - ; and - }
{ - (e) The oaths of office of the directors and officers of
the savings bank. - }
(2) If, upon examination, the director determines that the
{ - savings - } { + Oregon nonstock + } bank has complied
with the { + applicable + } requirements of ORS 716.028 to
716.070, the director shall issue to the { - savings - }
{ + Oregon nonstock + } bank a charter to do { - a savings
bank - } business { + as an Oregon nonstock bank under ORS
chapter 716 + }.
SECTION 339. ORS 716.100 is amended to read:
716.100. { + (1) + } If { - a - } { + an Oregon + }
savings bank fails to { - pay its guaranty and expense
funds, - } complete its organization and
{ - received - } { + receive + } from the Director { + of
the Department of Consumer and Business Services + } a charter
within one year after the date of filing its articles of
incorporation, the { + Oregon + } savings bank shall cease to
exist and the articles of incorporation are void { - , unless
the director extends the time for one additional year - } .
{ + (2) All persons purporting to act as or on behalf of an
Oregon savings bank, knowing there was no incorporation, are
jointly and severally liable for all liabilities created while so
acting. + }
SECTION 340. ORS 716.120 is amended to read:
716.120. { - A - } { + An Oregon + } savings bank shall not
transact any business, except as incidental or necessary to its
organization, until:
(1) It has received its charter from the Director { + of the
Department of Consumer and Business Services + }; and
Enrolled Senate Bill 125 (SB 125-B) Page 146
(2) The director is satisfied that { + either:
(a) In the case of an Oregon stock savings bank, the
incorporators have obtained paid subscriptions in at least the
amount of the initial approved paid-in capital; or
(b) In the case of an Oregon nonstock bank, + }the
incorporators have made the deposit of the:
{ - (a) - } { + (A) + } Initial guaranty fund required by
ORS 716.060.
{ - (b) - } { + (B) + } Expense fund required by ORS
716.070, and, if the director so requires, have entered into the
agreement or undertaking with the director and filed the
agreement and the security therefor as prescribed in ORS 716.070.
SECTION 341. ORS 716.135 is amended to read:
716.135. (1) { - A savings - } { + An Oregon nonstock + }
bank may amend its articles of incorporation, from time to time,
in any and as many respects as may be desired, so long as its
articles of incorporation as amended contain only such provisions
as might be lawfully contained in original articles of
incorporation at the time of making such amendment.
(2) In particular, and without limitation upon such general
power of amendment, { - a savings - } { + an Oregon
nonstock + } bank may amend its articles of incorporation, from
time to time, so as:
(a) To change its corporate name.
(b) To change its period of duration.
(c) To change, enlarge or diminish its corporate purposes.
SECTION 342. ORS 716.140 is amended to read:
716.140. The articles of incorporation of { - a savings - }
{ + an Oregon nonstock + } bank may be amended by { + a + }
resolution adopted by a majority of the directors of the
{ - savings - } { + Oregon nonstock + } bank. Any number of
amendments may be submitted to the directors and voted upon by
them at one meeting.
SECTION 343. ORS 716.145 is amended to read:
716.145. The articles of amendment shall be executed in
duplicate by the { - savings - } { + Oregon nonstock + } bank
by its president or a vice president and by its { + cashier,
its + } secretary or an assistant secretary, { - and verified
by one of the officers signing such articles, - } and shall set
forth:
(1) The name of the { - savings - } { + Oregon nonstock + }
bank.
(2) If the amendment alters or changes any provision of the
original or amended articles of incorporation, an identification
by reference or description of the affected provision and a
statement of its text as it is amended to read. If the amendment
strikes or deletes any provision of the original or amended
articles of incorporation, an identification by reference or
description of the provision so stricken or deleted and a
statement that it is stricken out or deleted. If the amendment is
an addition to the original or amended articles of incorporation,
a statement of that fact and the full text of each provision
added.
(3) The date of the adoption of the amendment by the directors.
SECTION 344. ORS 716.160 is amended to read:
716.160. (1) { - A savings - } { + An Oregon nonstock + }
bank may by action taken in the same manner as required for
amendment of { + its + } articles of incorporation adopt
restated articles of incorporation. The restated articles of
incorporation may contain any changes in the articles of
Enrolled Senate Bill 125 (SB 125-B) Page 147
incorporation that could be made by amendment regularly adopted.
Adoption of restated articles of incorporation containing any
such changes shall have the effect of amending the existing
articles of incorporation to conform to the restated articles of
incorporation. Restated articles of incorporation shall contain a
statement that they supersede the theretofore existing articles
of incorporation and amendments thereto.
(2) Restated articles of incorporation shall contain all the
statements required by this chapter to be included in original
articles of incorporation except that { - : - }
{ - (a) The restated articles of incorporation shall set
forth the amount of its stated capital at the time of the
adoption of the restated articles of incorporation; and the
places where its business is being transacted, naming the city
and county where the main office and each branch office is
located. - }
{ - (b) - } no statement shall be made with respect to the
number, names and addresses of directors constituting the initial
board of directors or the name { - , occupation, residence and
post-office address - } of each incorporator, or the sums each
incorporator contributed to the initial guaranty fund.
(3) Restated articles of incorporation when executed and filed
in the manner prescribed by this chapter for articles of
amendment shall supersede the theretofore existing articles of
incorporation and amendments thereto. The Director { + of the
Department of Consumer and Business Services + } shall upon
request certify a copy of the articles of incorporation, or the
articles of incorporation as restated, or any amendments to
either thereof.
(4) The restated articles of incorporation, when
{ - filed - } { + submitted for filing + }, shall be
accompanied by a statement, executed in duplicate by the
{ - savings - } { + Oregon nonstock + } bank by
{ - its president or a vice president and by its secretary or
an assistant secretary and verified by one of the officers
signing such statement - } { + an authorized officer + },
setting forth:
(a) The name of the { - savings - } { + Oregon nonstock + }
bank.
(b) The date of the adoption of the restated articles of
incorporation by the directors.
SECTION 345. ORS 716.210 is amended to read:
716.210. (1) The board of directors of { - a - } { + an
Oregon + } savings bank shall manage and control the affairs of
the { + Oregon + } savings bank. The board shall consist of not
fewer than five members.
(2) A person shall not be a director of { - a - } { + an
Oregon + } savings bank if the person:
(a) Has been adjudicated a bankrupt, taken the benefit of any
insolvency law or made a general assignment for the benefit of
creditors within the 10 years immediately prior to the person's
election as a director.
(b) Has allowed a judgment recovered against the person for a
sum of money to remain unsatisfied of record or unsecured on
appeal for a period of more than three months.
{ - (c) Is a director, officer or employee of any other
savings bank. - }
{ - (3) A person shall not be a director of a savings bank
solely by reason of holding public office. - }
Enrolled Senate Bill 125 (SB 125-B) Page 148
{ - (4) No fewer than one-half of the directors of a savings
bank, at the time of their election and during their continuance
in office, shall: - }
{ - (a) Be citizens of the United States; and - }
{ - (b) Be residents of this state or reside within 100 miles
of the principal place of business of the savings bank. - }
{ - (5) At least one director shall be a resident of the
State of Oregon. - }
SECTION 346. ORS 716.320 is amended to read:
716.320. (1) { + A board member of an Oregon nonstock bank may
be removed from office + } by the affirmative vote of
three-fourths of the directors at any regular meeting { - , a
board member may be removed from office - } { + of the
board + } if:
(a) The board member's conduct { - and habits are - }
{ + is + } of such character as to be injurious to the
{ - savings - } { + Oregon nonstock + } bank;
(b) A written copy of the charges made against the board member
has been served upon the board member personally, and upon the
Director { + of the Department of Consumer and Business
Services + }, at least two weeks before the meeting; and
(c) The vote of the directors by ayes and noes is entered in
the record of the minutes of the meeting.
(2) The office of a director of { - a savings - } { + an
Oregon nonstock + } bank immediately becomes vacant if the
director:
{ - (a) Fails to complete the official oath. - }
{ - (b) - } { + (a) + } Becomes disqualified for any of the
reasons specified in ORS 716.210 (2).
{ - (c) - } { + (b) + } Has failed to attend the regular
meetings of the board of directors, or to perform any of the
duties as director, for a period of six successive months, unless
excused by the board for the failure.
{ - (d) Willfully violates any of the provisions of ORS
716.280. - }
(3) A director who has forfeited or vacated office is not
eligible { - to - } { + for + } reelection unless the
forfeiture or vacancy occurred solely by reason of the director's
{ - : - }
{ - (a) Failure to complete the oath; - }
{ - (b) - } neglect of official duties as prescribed in
subsection
{ - (2)(c) - } { + (2)(b) + } of this section { + . + }
{ - ; or - }
{ - (c) Disqualification through becoming a nonresident, a
director, officer, clerk or other employee of another savings
bank or a director of an institution or national bank under the
circumstances specified in ORS 716.280 (1)(b), and the
disqualification has been removed. - }
SECTION 347. ORS 716.420 is amended to read:
716.420. { - A - } { + An Oregon + } savings bank may
invest the funds mentioned in ORS 716.410:
(1) In the { - bonds or - } obligations specified in
{ - ORS 708.388 (1) - } { + section 118 (1) of this 1997
Act + }, without limitation.
(2) Subject to a limitation of five percent of the assets of
the { + Oregon + } savings bank, in the { - bonds - }
{ + obligations + } specified in
{ - ORS 708.388 (2) - } { + section 118 (2) of this 1997
Act + }.
Enrolled Senate Bill 125 (SB 125-B) Page 149
(3) In shares of any mutual fund or unit trust, the assets of
which are invested solely in obligations described in and limited
under { - ORS 708.388 - } { + section 118 of this 1997
Act + }.
SECTION 348. ORS 716.450 is amended to read:
716.450. { - A - } { + An Oregon + } savings bank may
invest the funds mentioned in ORS 716.410:
(1) In the notes of any person, with a pledge as collateral of
securities or personal property which are eligible for investment
under ORS 716.410 to 716.590 and have an actual cash market value
at least 25 percent greater than the amount of the loan.
(2) In the obligations of any person secured by an assignment
of a life insurance policy, having a cash surrender value of not
less than 100 percent of the amount of the obligations, plus an
amount equal to one annual premium on the insurance policy.
(3) In loans, secured or unsecured, insured or guaranteed in
part or in full by the United States or any instrumentality
thereof, or by this state or instrumentality thereof, or for
which a conditional guarantee has been issued. The limitations
prescribed by ORS 716.552 to 716.574 shall not apply to loans
made under this subsection { + , + } but { - , - } the
aggregate amount of loans made under this subsection and ORS
716.552 shall not exceed 85 percent of the assets of any
{ + Oregon + } savings bank.
(4) In loans secured as specified under { - ORS 708.345
(1) - } { + section 154 of this 1997 Act + }.
(5) In commercial paper with a maturity of 180 days or less,
subject to a limitation of one percent of the total assets of the
{ + Oregon + } savings bank for each obligor.
(6) In unsecured loans, retail installment contracts, leases
and loans { - supported - } { + secured + } by security
{ - agreements, and - } { + interests in personal property and
by + } mortgages and deeds of trust
{ - secured by - } { + covering + } real estate, that are not
otherwise eligible for investment by { - a - } { + an
Oregon + } savings bank when the obligations are for home or
property repairs, alterations, appliances, improvements or
additions, home furnishing, for installation of underground
utilities, for educational purposes, for manufactured dwellings
used or to be used for permanent or semipermanent housing or for
any other nonbusiness purpose, if:
(a) The application for the loan states that the proceeds are
to be used for one of the purposes listed in this subsection.
(b) The loans evidenced by a note or other { + evidence of + }
obligation made pursuant to this subsection to any one individual
do not exceed one percent of the assets of the { + Oregon + }
savings bank and the aggregate amount of such loans do not exceed
20 percent of the assets of the { + Oregon + } savings bank.
(c) In the case of leases, the lease conforms to { - ORS
708.428 (1) and (3) - } { + sections 132 and 187 of this 1997
Act + }.
(7) In secured or unsecured commercial, corporate, business and
agricultural loans or leases of personal property, not to exceed
25 percent of the assets of the { + Oregon + } savings bank and
not to exceed one percent of its assets to any one person.
{ - However, loans under this subsection shall be made within
the state where the savings bank is located or within 75 miles of
its home office. - } Leases shall conform to { - ORS 708.428
(1) and (3) - } { + sections 132 and 187 of this 1997 Act + }.
Enrolled Senate Bill 125 (SB 125-B) Page 150
(8) Subsection (5) of this section shall not be construed to
permit { - a - } { + an Oregon + } savings bank to make loans
on or for inventory of articles held for sale as merchandise,
except manufactured dwellings.
SECTION 349. ORS 716.594 is amended to read:
716.594. { - A savings bank or a stock - } { + An
Oregon + } savings bank may acquire and hold all or part of the
stock of a corporation
{ - which - } { + that + } is or may thereafter be licensed
under ORS 744.002 as an agent to transact one or more of the
classes of insurance described in ORS 744.115 except for title
insurance, subject to the following requirements:
(1) The acquisition and holding of such stock shall be subject
to the approval of the Director { + of the Department of
Consumer and Business Services + }. The director shall base
consideration for approval on the condition of the
{ + Oregon + } savings bank { - or stock savings bank - } ,
the adequacy of a formal business plan for the insurance
activities and the existence of satisfactory management for the
corporation.
(2) The director may revoke or restrict the ongoing authority
of the { + Oregon + } savings bank { - or stock savings
bank - } to hold stock in the corporation if the condition of
the { + Oregon + } savings bank { - or stock savings bank - }
substantially deteriorates or if the insurance activities are
adversely affecting the { + Oregon + } savings bank { - or
stock savings bank - } .
(3) If the corporation conducts the insurance agency activity
in a branch or office in which the { + Oregon + } savings bank
or { - stock savings bank - } carries on its banking business,
the insurance agency activity shall be physically separated from
those parts of the premises in which the { + Oregon + } savings
bank { - or stock savings bank - } carries on the banking
business.
(4) All persons who act on behalf of the corporation to
transact insurance, as that term is defined in ORS 731.146, shall
be employees of the corporation only and shall not while employed
by the corporation be in any manner employed or compensated by or
perform any work for the { - institution - } { + Oregon
savings bank + }.
(5) The name of the corporation and any assumed business name
used by it shall not be identical to that of the { + Oregon + }
savings bank { - or stock savings bank - } .
(6) Prior to selling any policy of insurance, the corporation
shall disclose in writing to the purchaser that the corporation
is owned in whole or part by the { + Oregon + } savings bank
{ - or stock savings bank - } , and that the purchaser may not
be required to purchase the insurance from the { + Oregon + }
savings bank { - or stock savings bank - } as a condition of
obtaining any service from or engaging in any transaction with
the { + Oregon + } savings bank { - or stock savings bank - }
.
(7) For each calendar year during which { - a - } { + an
Oregon + } savings bank { - or stock savings bank - } owns all
or part of any corporation licensed under ORS 744.002 as an
agent, the { + Oregon + } savings bank
{ - or stock savings bank - } shall file a written report with
the director. The report shall be filed no later than March 31 of
the following year and shall disclose the insurance activities of
the corporation. The required contents of the report shall be
Enrolled Senate Bill 125 (SB 125-B)