Chapter 708A —
Regulation of Institutions Generally
2011 EDITION
REGULATION OF INSTITUTIONS GENERALLY
FINANCIAL INSTITUTIONS
POWERS OF INSTITUTIONS
708A.005 Powers
of institutions; insurance transactions; rules
708A.010 Investments
and activities of Oregon commercial banks
708A.115 Investment
in government obligations
708A.120 Investment
in stock of other corporations; rules
708A.125 Stock
in corporations acquired to strengthen capital or eliminate undesirable assets
708A.130 Definition
for ORS 708A.135 to 708A.145
708A.135 Investment
in bank service corporation
708A.140 Discrimination
by bank service corporation prohibited against nonstockholding
depository institution; permitted conduct
708A.145 Authorized
services of bank service corporations; sale of insurance; regulation of
services
708A.150 Community
development corporations; authority to invest or organize; conditions;
corporate form; functions
708A.155 Investment
in foreign banks
708A.160 Corporation
created to establish ATMs; banking institution as stockholder
708A.165 Membership
in Federal Reserve System; member bank, officers, directors and shareholders
subject to duties and liabilities imposed by laws of this state
708A.170 Securities
powers
708A.175 Right
to purchase, hold and dispose of real and personal property
708A.180 Acquisition
of personal property for leasing purposes
708A.185 Purchase
of real estate contracts
708A.190 Acceptance
of drafts and bills of exchange; issuance of letters of credit; obligation for
participation share in bills; rules
708A.195 Disposition
of real and personal property
708A.210 Challenge
to validity of institution action; prohibition; exceptions
LOANS GENERALLY
708A.250 Lending
money
708A.255 Interest
rates on loans or uses of money; late charges
708A.260 Accepting
own stock as collateral
708A.265 Accepting
stock of other institutions as collateral
708A.270 Real
estate loans
708A.275 Establishment
of loan production office; notice; fee
LOAN AND OTHER OBLIGATION LIMITS
708A.290 “Capital”
defined for ORS 708A.290 to 708A.375
708A.295 Limitations
on amount of obligations to Oregon commercial bank; applicability
708A.300 Obligations
secured by readily marketable collateral
708A.305 Obligations
of other financial institutions
708A.310 Obligations
of indorser of discounted commercial paper
708A.315 Noncommercial
short-term notes
708A.320 Obligations
secured by shipping documents
708A.325 Installment
consumer paper
708A.330 Bankers’
acceptances of other financial institutions
708A.335 Obligations
secured by documents covering readily marketable staples
708A.340 Obligations
secured by documents covering livestock
708A.345 Obligations
secured by government obligations or shares of mutual fund or unit trust
708A.350 Obligations
secured by government bonds
708A.355 Insured
and guaranteed obligations
708A.360 Obligations
secured by deposits
708A.365 Obligations
secured by life insurance policy values
708A.370 Obligations
secured by first lien on real estate
708A.375 Obligations
of guarantors
DEPOSITS
708A.400 Deposit
accounts
708A.405 Deposits;
FDIC insurance required
708A.410 Savings
accounts; conditions for withdrawal; interest rate
708A.415 Securing
deposits by surety bond, letter of credit or insurance
708A.420 Notice
to depositor upon change in terms, charges, withdrawal conditions or decrease
in interest rate; exception
708A.425 Deposit
made in name of minor
708A.430 Disposition
of deposit on death of depositor
708A.435 Adverse
claim to deposit; notice; restraining order or other process; indemnity bond or
letter of credit
708A.440 Checks
drawn by agents presumed to be in authorized manner
708A.445 Checks
of intoxicated or drugged persons
708A.450 Certified
checks
708A.455 Definitions
for ORS 708A.455 to 708A.515
708A.460 Application
of ORS 708A.465 to 708A.475; liability and setoff rights of financial
institutions
708A.465 Ownership
of multiple-party accounts
708A.470 Multiple-party
accounts; disposition of deposit upon death of party or trustee; effect of will
708A.475 Right
of survivorship based on form of account; alteration of form of account
708A.480 Transfer
of moneys upon death of depositor or trustee is not testamentary disposition
708A.485 Payment
of deposit in multiple-party account to one or more parties; institution not
required to determine source or use of funds in account
708A.490 Joint
account; payment to any party to account; payment to others
708A.495 P.O.D.
account; payment to any original party; payment to others
708A.500 Trust
account; payment to any trustee; payment to others
708A.505 Discharge
of institution from liability for payments made; conditions
708A.510 Right
of institution to setoff; amount
708A.515 Designation
of agent for account; powers of agent
GRANTING SECURITY INTERESTS IN
INSTITUTION ASSETS
708A.535 Granting
security interests in institution assets
REGULATORY ACCOUNTING
708A.555 Generally
accepted accounting principles
708A.560 Real
and personal property used in institution’s business
708A.565 Certain
stock
708A.570 Community
development corporations
708A.575 Market-making
corporations
708A.580 Capital-strengthening
corporations
708A.585 Claims
and judgments as assets
708A.590 Charging
off real estate assets; use of generally accepted accounting principles
708A.595 Charging
off personal property assets
708A.600 Charging
off bad debts
708A.605 Separate
accounts for foreign branches
MISCELLANEOUS PROVISIONS
708A.630 Negligent,
excessive, dishonest or unlawful loans; civil liability of officer, director or
employee
708A.635 Written
policies regarding reporting to and obtaining approval of board; duty to report
708A.640 Receiving
illegal compensation; misapplication of property and credit
708A.645 Illegal
guaranty or indorsement
708A.650 Banking
days; holidays
708A.655 Procedures
for opening safe deposit box after death of person who was sole lessee or last
surviving lessee of box
PENALTIES
708A.990 Civil
penalties
708A.995 Criminal
penalties
POWERS OF INSTITUTIONS
708A.005 Powers of institutions; insurance
transactions; rules. (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 as an insurance producer as required by ORS 744.053 to
transact one or more of the classes of insurance described in ORS 744.062
except for title insurance; and
(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 types of
limited class insurance, as that term is defined in ORS 744.052, designated by
the Director of the Department of Consumer and Business Services:
(a)
The conduct by the institution of insurance producer activities 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 insurance activity.
(b)
The director may revoke or restrict the ongoing authority of the institution to
engage in the insurance producer activity if the condition of the institution
substantially deteriorates or if the insurance activities are adversely
affecting the institution.
(c)
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 as an insurance producer, as that term is defined in
ORS 731.104, shall not in any manner use customer information obtained from
another insurance producer to promote, develop or solicit insurance business
for the institution unless the other insurance producer consents to such use of
the customer information. [1997 c.631 §116; 1997 c.831 §1a; 2001 c.191 §51;
2003 c.363 §6; 2003 c.364 §58a]
708A.010 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
(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. [1997 c.631 §117]
708A.115 Investment in government
obligations. (1) Institutions may invest, without
regard to any limitation based on stockholders’ equity, 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 stockholders’ equity, 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.
(3)
Obligations received in satisfaction of debts previously contracted in good
faith are not subject to the 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. [1997 c.631 §118; 1999 c.59 §215]
708A.120 Investment in stock of other
corporations; rules. (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 ORS 708A.130 to 708A.145.
(j)
In the capital stock of a community development corporation as provided in ORS
708A.150.
(k)
If a trust company is not engaged in a banking business and if the 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 a federal covered
investment adviser or a state investment adviser, as defined in ORS 59.015,
with all the powers customarily exercised by a federal covered investment
adviser or a state investment adviser.
(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 ORS 708A.125.
(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 ORS 708A.155.
(o)
In the capital stock of a corporation created to establish ATMs as provided in
ORS 708A.160.
(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 ORS 708A.115.
(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 financial holding company, a bank holding company or a
nonbank subsidiary of a financial holding company or a bank holding company is
authorized to engage. This subsection does not apply unless the institution is
the owner of at least 80 percent of the common stock of the subsidiary corporation,
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 as an insurance producer as required by
ORS 744.053 to transact one or more of the classes of insurance described in
ORS 744.062, subject to the following requirements:
(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)
For each calendar year during which an institution owns all or part of any
corporation licensed as an insurance producer as required by ORS 744.053, 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.
(d)
The corporation shall not in any manner use customer information obtained by
the institution from another insurance producer to promote, develop or solicit
insurance business for the corporation unless the other insurance producer
consents to such use of the customer information.
(e)
The corporation shall be subject to the limitations applicable to depository
institutions under ORS 746.213 to 746.219. For the purpose of this paragraph, “depository
institution” has the meaning given that term in ORS 746.213. [1997 c.631 §119;
1997 c.772 §31b; 1997 c.831 §2a; 2001 c.191 §52; 2001 c.377 §47; 2003 c.363 §7;
2003 c.364 §59a; 2005 c.80 §4; 2005 c.194 §1]
708A.125 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 ORS
708A.120, 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.
[1997 c.631 §120]
708A.130 Definition for ORS 708A.135 to
708A.145. As used in ORS 708A.135 to 708A.145,
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. [1997
c.631 §121]
708A.135 Investment in bank service
corporation. An Oregon commercial bank may invest
not more than 10 percent of its 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. [1997 c.631 §122]
708A.140 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 ORS 708A.130 to 708A.145 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 ORS 708A.135 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. [1997 c.631 §123]
708A.145 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 depository institutions under ORS 746.213 to 746.219. For the
purpose of this paragraph, “depository institution” has the meaning given that
term in ORS 746.213.
(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
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. [1997 c.631 §124; 2003 c.363 §8]
708A.150 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. [1997
c.631 §125]
708A.155 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 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
stockholders’ equity 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, stockholders’ equity 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. [1997 c.631 §126; 1999 c.59 §216]
708A.160 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. [1997 c.631 §127]
708A.165 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.
(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. [1997 c.631 §128]
708A.170 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. [1997 c.631 §129]
708A.175 Right to purchase, hold and
dispose of real and personal property. 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 judgment.
(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. [1997 c.631 §131; 2003 c.576 §545]
708A.180 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. [1997 c.631 §132]
708A.185 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 ORS 708A.270. [1997 c.631 §133]
708A.190 Acceptance of drafts and bills of
exchange; issuance of letters of credit; obligation for participation share in
bills; rules. (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 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. [1997 c.631 §134]
708A.195 Disposition of real and personal
property. (1) An institution shall promptly
dispose of real and personal property that the institution is not authorized to
own or hold under the Bank Act.
(2)
Real estate acquired by an institution pursuant to ORS 708A.175 (3) and (4)
shall be sold or exchanged for other real estate within 10 years after title has
vested in the real estate, unless the Director of the Department of Consumer
and Business Services extends the time. Title vests for purposes of this
section on the date the institution is first entitled to receive a deed to the
real estate. An institution may not exchange real estate for other real estate
without the director’s prior written consent. An institution may hold real
estate taken in exchange for other real estate for a period of time that the
director fixes, not to exceed 10 years from the date of the exchange.
(3)
An institution shall promptly dispose of personal property the institution
acquires under ORS 708A.175 (3). [1997 c.631 §135; 2011 c.478 §2]
708A.200 [1997
c.631 §136; 2001 c.191 §53; 2001 c.377 §48; repealed by 2003 c.363 §16]
708A.210 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. [1997 c.631 §137]
LOANS GENERALLY
708A.250 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. [1997 c.631 §138]
708A.255 Interest rates on loans or uses
of money; late charges. (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 payment may bear a late charge 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 10 days after
the due date or, if the open-end credit arrangement is a credit card account,
the payment is not received by the lender on or before the due date;
(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 10 days thereafter or,
in the case of an open-end credit arrangement that is a credit card account,
that a late charge may be imposed if payment is not received by the lender on
or before the date on which the payment is due. 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 periods described in paragraph (a) of
this subsection. [1997 c.631 §139; 1997 c.631 §139a; 2001 c.440 §1]
708A.260 Accepting own stock as
collateral. 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. [1997 c.631 §140]
708A.265 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. [1997 c.631 §141]
708A.270 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. [1997 c.631 §142]
708A.275 Establishment of loan production
office; notice; fee. (1) A financial institution
shall file a notice with the Director of the Department of Consumer and
Business Services within 30 days of establishing a loan production office in
this state. The notice shall include:
(a)
The name of the financial institution and address of the main office;
(b)
The name and address of the loan production office; and
(c)
The name and address of the officer of the financial institution responsible
for loan production office activities.
(2)
A notice shall be filed for each loan production office in this state.
(3)
Each notice filed under subsection (1) of this section shall be:
(a)
Accompanied by a nonrefundable fee of $100.
(b)
Amended when there is a material change in the information provided pursuant to
subsection (1) of this section. No fee is required for amendments.
(4)
A financial institution shall notify the director of the closure of a loan
production office in this state, the date of closure and the disposition of any
records previously maintained at the loan production office subject to closure.
No fee is required for a notice of closure. [1999 c.107 §5]
LOAN AND OTHER OBLIGATION LIMITS
708A.290 “Capital” defined for ORS
708A.290 to 708A.375. As used in ORS 708A.290 to
708A.375, 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 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). [1997 c.631 §143]
708A.295 Limitations on amount of
obligations to Oregon commercial bank; applicability.
Except as provided in ORS 708A.300 to 708A.375, 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 ORS 708A.300 to 708A.375 shall be
in addition to and shall not be applied against the 15 percent limitation. Any
loan made or obligation acquired that complies with ORS 708A.290 to 708A.375
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. [1997 c.631 §144]
708A.300 Obligations secured by readily
marketable collateral. In addition to obligations
permitted under ORS 708A.295, 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. [1997 c.631 §145]
708A.305 Obligations of other financial institutions.
In addition to obligations permitted under ORS 708A.295, 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. [1997 c.631 §146]
708A.310 Obligations of indorser of discounted commercial paper.
(1) In addition to obligations permitted under ORS 708A.295, 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. [1997 c.631 §147]
708A.315 Noncommercial short-term notes.
In addition to obligations permitted under ORS 708A.295, 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 ORS 708A.310, having a
maturity of not more than six months, and owned by the person indorsing and
negotiating the same. [1997 c.631 §148]
708A.320 Obligations secured by shipping
documents. In addition to obligations permitted
under ORS 708A.295, 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. [1997 c.631 §149]
708A.325 Installment consumer paper.
(1) In addition to obligations permitted under ORS 708A.295, 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. [1997 c.631 §150]
708A.330 Bankers’ acceptances of other
financial institutions. In addition to obligations
permitted under ORS 708A.295, 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. [1997 c.631 §151]
708A.335 Obligations secured by documents
covering readily marketable staples. (1) In
addition to obligations permitted under ORS 708A.295, 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:
(a)
Nonperishable; or
(b)
Perishable, but frozen, freeze-dried, irradiated or refrigerated for the
purpose of protecting the staple against deterioration. [1997 c.631 §152]
708A.340 Obligations secured by documents
covering livestock. In addition to obligations
permitted under ORS 708A.295, 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. [1997 c.631 §153]
708A.345 Obligations secured by government
obligations or shares of mutual fund or unit trust.
In addition to obligations permitted under ORS 708A.295, 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. [1997 c.631 §154]
708A.350 Obligations secured by government
bonds. In addition to obligations permitted
under ORS 708A.295, 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. [1997 c.631 §155]
708A.355 Insured and guaranteed
obligations. In addition to obligations permitted
under ORS 708A.295, 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,
bureau, board, commission or agency of the United States, including any
corporation wholly owned, directly or indirectly, by the United States. [1997
c.631 §156]
708A.360 Obligations secured by deposits.
(1) In addition to obligations permitted under ORS 708A.295, 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 ORS 708A.295, 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. [1997 c.631 §157]
708A.365 Obligations secured by life
insurance policy values. In addition to obligations
permitted under ORS 708A.295, 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. [1997 c.631 §158]
708A.370 Obligations secured by first lien
on real estate. In addition to obligations
permitted by ORS 708A.295, 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 ORS 708A.295 may become exempt
from ORS 708A.295 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 ORS 708A.295; 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 ORS 708A.295. [1997
c.631 §159]
708A.375 Obligations of guarantors. In
addition to obligations permitted by ORS 708A.295, 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 ORS 708A.295 in determining whether the Oregon commercial bank
may make additional loans to or acquire other obligations of the person. [1997
c.631 §160]
DEPOSITS
708A.400 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. [1997 c.631 §161]
708A.405 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. [1997
c.631 §162]
708A.410 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. [1997
c.631 §163]
708A.415 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 ORS 706.008, 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. [1997 c.631 §164]
708A.420 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 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. [1997
c.631 §165]
708A.425 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. [1997
c.631 §166]
708A.430 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 on demand of the surviving spouse at any time after the
death of the depositor;
(b)
If there is no surviving spouse, to the Oregon Health Authority or the
Department of Human Services, on demand of the authority or the department no
less than 46 days and no more than 75 days from the death of the depositor when
there is a preferred claim arising under ORS 411.708, 411.795 or 416.350;
(c)
If there is no surviving spouse and no authority or department claim, to the
depositor’s surviving children 18 years of age or older;
(d)
If there is no surviving spouse, authority claim, department claim or surviving
child 18 years of age or older, to the depositor’s surviving parents; or
(e)
If there is no surviving spouse, authority claim, department claim, surviving
child 18 years of age or older 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 to the deceased depositor; and
(d)
Embody a promise to pay the expenses of last sickness, funeral expenses and
just debts of the deceased depositor out of the deposit to the full extent of
the deposit if necessary, in the order of priority prescribed by ORS 115.125,
and to distribute any remaining moneys to the persons who are entitled to those
moneys by law.
(3)
In the event the depositor died intestate without known heirs, an estate
administrator of the Department of State Lands appointed under ORS 113.235
shall be the affiant and shall receive the moneys as escheat property.
(4)
The financial institution shall determine the relationship of the affiant to
the deceased depositor. However, payment of the moneys in good faith to the
affiant discharges and releases 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 deceased depositor.
(5)
A probate proceeding is not necessary to establish the right of the surviving
spouse, authority, department, surviving child, surviving parent, surviving
brothers and sisters or an estate administrator of the Department 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.
(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 ORS
708A.455 to 708A.515. [1997 c.631 §167; 2003 c.395 §20; 2005 c.381 §26; 2007
c.369 §1; 2009 c.595 §1113; 2011 c.720 §217]
708A.435 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 ORS 706.008,
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. [1997 c.631 §168]
708A.440 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. [1997
c.631 §169]
708A.445 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. [1997
c.631 §170]
708A.450 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. [1997 c.631 §171]
708A.455 Definitions for ORS 708A.455 to
708A.515. As used in ORS 708A.455 to 708A.515,
unless the context requires otherwise:
(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 ORS 708A.455 to 708A.515, 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.
(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. [1997 c.631 §172]
708A.460 Application of ORS 708A.465 to
708A.475; liability and setoff rights of financial institutions.
The provisions of ORS 708A.465 to 708A.475 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 ORS 708A.485 to 708A.510 govern the liability of financial
institutions that make payments pursuant thereto, and their setoff rights. [1997
c.631 §173]
708A.465 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. [1997 c.631 §174]
708A.470 Multiple-party accounts;
disposition of deposit upon death of party or trustee; effect of will.
(1) Sums remaining on deposit in a bank at the death of a party to a joint
account are rebuttably presumed to belong to the
surviving party or parties as against the estate of the decedent. If there are
two or more surviving parties, their respective ownerships during their
lifetimes shall be in proportion to their previous ownership interests under
ORS 708A.465 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.
(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.
(6)
The rebuttable presumption under subsection (1) of this section may be overcome
by evidence establishing that:
(a)
The deceased party intended a different result; or
(b)
The deceased party lacked capacity when the joint account was established.
(7)
A bank is not liable for distributing sums remaining on deposit at the death of
a party to a joint account to a surviving party or parties in accordance with
the account agreement unless, prior to distributing sums to a surviving party
or parties:
(a)
The bank has received notice of an adverse claim under ORS 708A.435; and
(b)
The adverse claimant proceeds as required under ORS 708A.435. [1997 c.631 §175;
2003 c.256 §1]
708A.475 Rights of survivorship based on
form of account; alteration of form of account.
The provisions of ORS 708A.470 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. [1997 c.631 §176]
708A.480 Transfer of moneys upon death of
depositor or trustee is not testamentary disposition.
Any transfers resulting from the application of ORS 708A.470 are effective by
reason of the account contracts involved and ORS 708A.470, and are not to be
considered as testamentary or subject to administration in the estate of a
deceased party. [1997 c.631 §177]
708A.485 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 from an account, for purposes of establishing
net contributions. [1997 c.631 §178]
708A.490 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 ORS 708A.470. [1997 c.631 §179]
708A.495 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. [1997
c.631 §180]
708A.500 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. [1997 c.631 §181]
708A.505 Discharge of institution from
liability for payments made; conditions. Payment made
pursuant to ORS 708A.485, 708A.490, 708A.495 or 708A.500 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. [1997 c.631 §182]
708A.510 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 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. [1997 c.631 §183]
708A.515 Designation of agent for account;
powers of agent. Nothing in ORS 708A.455 to
708A.465, 716.024, 723.426 or 723.432 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. [1997 c.631 §184]
GRANTING SECURITY INTERESTS IN
INSTITUTION ASSETS
708A.535 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 pursuant to ORS 295.001 to 295.108, 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 79.0102.
(3)
An institution shall grant a security interest in its assets only when
authorized by a general or specific prior resolution of 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.
(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. [1997
c.631 §185; 2001 c.445 §180; 2007 c.871 §31]
REGULATORY ACCOUNTING
708A.555 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. [1997
c.631 §186]
708A.560 Real and personal property used
in 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
ORS 708A.290.
(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 ORS 708A.180
is not subject to the limitations of this section. [1997 c.631 §187]
708A.565 Certain stock.
Investments in stock of a company that engages in activities in which a
financial holding company, a bank holding company or a nonbanking subsidiary of
a financial holding company or bank holding company could engage under ORS
708A.120 (4) shall be carried on the books of the institution at a value not
exceeding 15 percent of the stockholders’ equity of the institution. [1997
c.631 §188; 1999 c.59 §217; 2001 c.377 §49]
708A.570 Community development
corporations. Investments in community development
corporations under ORS 708A.150 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. [1997 c.631 §189]
708A.575 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. [1997
c.631 §190]
708A.580 Capital-strengthening
corporations. (1) The aggregate amount of stock of a
corporation acquired under ORS 708A.125 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. [1997 c.631 §191]
708A.585 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. [1997 c.631 §192]
708A.590 Charging off real estate assets;
use of generally accepted accounting principles.
(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 the real estate to
profit and loss or otherwise remove the real estate from the institution’s
books.
(2)
An institution shall at all times value and record on the institution’s books
and records, in accordance with generally accepted accounting principles, real
estate that the institution owns or holds in accordance with ORS 708A.175 (3)
or (4). [1997 c.631 §193; 2011 c.478 §1]
708A.595 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. [1997 c.631 §194]
708A.600 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. [1997 c.631 §195]
708A.605 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. [1997 c.631 §196]
MISCELLANEOUS PROVISIONS
708A.630 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. [1997
c.631 §197a]
708A.635 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. [1997
c.631 §198]
708A.640 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. [1997 c.631 §199]
708A.645 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. [1997 c.631 §200]
708A.650 Banking days; holidays.
(1) As used in this section:
(a)
“Bank” includes any banking institution, out-of-state state bank, national bank
or extranational institution doing a banking 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 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. [1997 c.631 §1c; 1999 c.59 §218]
708A.655 Procedures for opening safe
deposit box after death of person who was sole lessee or last surviving lessee
of box. (1) This section applies to the safe deposit
box of any person who is the sole lessee or last surviving lessee of the box
and who has died.
(2)
Subject to ORS 114.537, upon being furnished with a certified copy of the
decedent’s death certificate or other evidence of death satisfactory to the
Oregon operating institution, the Oregon operating institution within which the
box is located shall cause or permit the box to be opened and the contents of
the box examined at the request of an individual who furnishes an affidavit
stating:
(a)
That the individual believes the box may contain the will of the decedent, a
trust instrument creating a trust of which the decedent was a trustor or a trustee at the time of the decedent’s death,
documents pertaining to the disposition of the remains of the decedent,
documents pertaining to property of the estate of the decedent or property of
the estate of the decedent; and
(b)
That the individual is an interested person and wishes to open the box to
conduct a will search or trust instrument search, obtain documents relating to
the disposition of the decedent’s remains, inventory the contents of the box or
remove property of the estate of the decedent pursuant to a small estate
affidavit filed under ORS 114.515.
(3)
For the purpose of this section, “interested person” means any of the
following:
(a)
A person named as personal representative of the decedent in a purported will
of the decedent;
(b)
The surviving spouse or any heir of the decedent;
(c)
A person who was serving as the court-appointed guardian or conservator of the
decedent or as trustee for the decedent immediately prior to the decedent’s
death;
(d)
A person named as successor trustee in a purported trust instrument creating a
trust of which the decedent was a trustor or a
trustee at the time of the decedent’s death;
(e)
A person designated by the decedent in a writing that is acceptable to the
Oregon operating institution and is filed with it
prior to the decedent’s death;
(f)
A person who immediately prior to the death of the decedent had the right of
access to the box as an agent of the decedent under a durable power of
attorney;
(g)
If there are no heirs of the decedent, an estate administrator of the
Department of State Lands appointed under ORS 113.235; or
(h)
A person who is authorized to file an affidavit under ORS 114.515.
(4)
If the box is opened for the purpose of conducting a will search, the Oregon
operating institution shall remove any document that appears to be a will, make
a true and correct copy of it and deliver the original will to a person
designated in the will to serve as the decedent’s personal representative, or
if no such person is designated or the Oregon operating institution cannot,
despite reasonable efforts, determine the whereabouts of such person, the
Oregon operating institution shall retain the will or deliver it to a court
having jurisdiction of the estate of the decedent. A copy of the will shall be
retained in the box. At the request of the interested person, a copy of the
will, together with copies of any documents pertaining to the disposition of
the remains of the decedent, may be given to the interested person.
(5)
If the box is opened for the purpose of conducting a trust instrument search,
the Oregon operating institution shall remove any document that appears to be a
trust instrument creating a trust of which the decedent was a trustor or trustee at the time of the decedent’s death,
make a true and correct copy of it and deliver the original trust instrument to
a person designated in the trust instrument to serve as the successor trustee
on the death of the decedent. If no such person is designated or the Oregon
operating institution cannot, despite reasonable efforts, determine the
whereabouts of such person, the Oregon operating institution shall retain the
trust instrument. A copy of the trust instrument shall be retained in the box.
At the request of any interested person, a copy of the trust instrument may be
given to the interested person.
(6)
If the box is opened for the purpose of obtaining documents pertaining to the
disposition of the decedent’s remains, the Oregon operating institution shall
comply with subsection (4) or (5) of this section with respect to any will or
trust instrument of the decedent found in the box, and may in its discretion
either:
(a)
Make and retain in the box a copy of any documents pertaining to the
disposition of the remains of the decedent and tender the original documents to
the interested person; or
(b)
Provide a copy of any documents pertaining to the disposition of the remains of
the decedent to the interested person and retain the original documents in the
box.
(7)
If the box is opened for the purpose of making an inventory of its contents,
the Oregon operating institution shall comply with subsection (4) or (5) of
this section with respect to any will or trust instrument of the decedent that
is found in the box, and shall cause the inventory to be made. The inventory
must be attested to by a representative of the Oregon operating institution and
may be attested to by the interested person, if the interested person is
present when the inventory is made. The Oregon operating institution shall
retain the original inventory in the box, and shall furnish a copy of the
inventory to the interested person upon request.
(8)
If the interested person is an affiant of a small estate affidavit filed under
ORS 114.515 and delivers a certified copy of the affidavit in the manner
provided by ORS 114.535, the Oregon operating institution shall provide to the
affiant access to the decedent’s property. The Oregon operating institution
shall comply with subsection (4) or (5) of this section if a will or trust
instrument of the decedent is found in the box. Subject to ORS 114.537, the
Oregon operating institution shall allow the affiant to take possession of the
personal property in the box.
(9)
The Oregon operating institution may presume the truth of any statement
contained in the affidavit required to be furnished under this section or ORS
114.535, and when acting in reliance upon such an affidavit, the Oregon
operating institution is discharged as if it had dealt with the personal
representative of the decedent. The Oregon operating institution is not
responsible for the adequacy of the description of any property included in an inventory
of the contents of a box, or for the conversion of the property in connection
with actions performed under this section, except for conversion by intentional
acts of the Oregon operating institution or its employees, directors, officers
or agents. If the Oregon operating institution is not satisfied that the
requirements of this section have been satisfied, the Oregon operating
institution may decline to open the box.
(10)
If the interested person or affiant does not furnish the key needed to open the
box, and the Oregon operating institution must incur expense in gaining entry
to the box, the Oregon operating institution may require that the interested
person or affiant pay the expense of opening the box.
(11)
Any examination of the contents of a box under this section shall be conducted
in the presence of at least one employee of the Oregon operating institution. [1999
c.506 §2; 2001 c.10 §1; 2003 c.395 §21; 2011 c.422 §4]
PENALTIES
708A.990 Civil penalties.
(1) An institution that violates:
(a)
ORS 708A.560 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)
ORS 708A.420 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. [1997 c.631 §201]
708A.995 Criminal penalties.
Violation knowingly of any of the provisions of ORS 708A.635 is a Class C
felony. [1997 c.631 §202]
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