REPORT TITLE:
Financial Institutions


DESCRIPTION:
Removes restrictions on establishment or acquisition of
interstate branches in Hawaii by out-of-state banks and
eliminates five-year age requirement for whole bank acquisition
by an out-of-state bank, effective January 1, 2001. (CD1)



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 1999                                H.D. 1
STATE OF HAWAII                                            C.D. 1
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE CODE OF FINANCIAL INSTITUTIONS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1. Section 412:12-104, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "[[]412:12-104[]] Authority of out-of-state banks to
 
 4 establish interstate branches in Hawaii by merger.(a)  One or
 
 5 more Hawaii banks may enter into an interstate merger transaction
 
 6 with one or more out-of-state banks under this article, and an
 
 7 out-of-state bank resulting from the transaction may maintain and
 
 8 operate the branches in Hawaii of a Hawaii bank that participated
 
 9 in the transaction, if the conditions and filing requirements of
 
10 this article are met.
 
11      (b)  [(1) An interstate merger transaction resulting in the
 
12           acquisition by an out-of-state bank of a Hawaii state
 
13           bank, or of all or substantially all of the branches of
 
14           a Hawaii state bank, shall not be permitted under this
 
15           article unless the Hawaii state bank shall have been in
 
16           continuous operation, on the date of such acquisition,
 
17           for a period of at least five years.
 
18      (2)  For the purposes of paragraph (1), a Hawaii state bank
 
19           chartered solely for the purpose of acquiring another
 

 
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 1           Hawaii state bank is considered to have been in
 
 2           existence for the same period as the Hawaii state bank
 
 3           to be acquired, so long as it does not open for
 
 4           business at any time before the acquisition.
 
 5      (3)  The commissioner may waive the restriction in paragraph
 
 6           (1) in the case of a Hawaii state bank that is subject
 
 7           to, or is in danger of becoming subject to supervisory
 
 8           action under article 2 of this chapter or, if
 
 9           applicable, the equivalent provisions of federal law.
 
10      (c)]  Any out-of-state bank that will be the resulting bank
 
11 pursuant to an interstate merger transaction involving a Hawaii
 
12 state bank shall notify the commissioner of the proposed merger
 
13 not later than the date on which it files an application for an
 
14 interstate merger transaction with the responsible federal bank
 
15 supervisory agency, and shall submit a copy of that application
 
16 to the commissioner and pay a filing fee of $9,000, or a greater
 
17 amount as the commissioner may establish by rule pursuant to
 
18 chapter 91.  The filing fee shall be nonrefundable.  Any Hawaii
 
19 state bank which is a party to an interstate merger transaction
 
20 shall comply with part VI, article 3, of this chapter to the
 
21 extent applicable, and with other applicable state and federal
 
22 laws.  If the resulting bank in the interstate merger transaction
 
23 is an out-of-state state bank, the director of commerce and
 

 
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 1 consumer affairs shall not file the articles of merger until the
 
 2 out-of-state state bank has filed a confirmation in writing by
 
 3 the commissioner of compliance with this section.  If the
 
 4 resulting bank in the interstate merger transaction is an out-of-
 
 5 state bank which is a national banking association, the resulting
 
 6 bank shall file with the director of commerce and consumer
 
 7 affairs a confirmation in writing by the commissioner of
 
 8 compliance with this section.
 
 9      [(d)] (c)  Any out-of-state state bank which shall be the
 
10 resulting bank in an interstate merger transaction involving a
 
11 Hawaii bank shall confirm in writing to the commissioner that as
 
12 long as it maintains a branch in this State, it shall comply with
 
13 all applicable laws of this State and provide satisfactory
 
14 evidence to the commissioner of compliance with applicable
 
15 requirements of chapter 415 relating to foreign corporations."
 
16      SECTION 2. Section 412:12-105, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "[[]412:12-105[] Prohibition of out-of-state banks to
 
19 establish a de novo interstate branch or acquire an interstate
 
20 branch.(a)  An out-of-state bank that does not operate a branch
 
21 in this State may not establish and operate a de novo branch in
 
22 this State.
 
23      (b)  An out-of-state bank that does not operate a branch in
 

 
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 1 this State may not establish and operate a branch in this State
 
 2 through the acquisition of a branch.
 
 3      (c)  Notwithstanding subsection (b), the commissioner may
 
 4 approve the acquisition of a branch by an out-of-state bank in
 
 5 the case of a bank that is subject to, or is in danger of
 
 6 becoming subject to supervisory action under article 2 of this
 
 7 chapter or, if applicable, the equivalent provisions of federal
 
 8 law or the law of the out-of-state bank's home state.]
 
 9 Authority of out-of-state banks to establish a de novo interstate
 
10 branch or acquire an interstate branch.  (a)  An out-of-state
 
11 bank that does not operate a branch in this State and that meets
 
12 the requirements of this article may establish and operate a
 
13 branch in this State.
 
14      (b)  An out-of-state bank that does not operate a branch in
 
15 this State and that meets the requirements of this article may
 
16 establish and operate a branch in this State through the
 
17 acquisition of a branch.
 
18      (c)  An out-of-state bank desiring to establish and operate
 
19 a branch or to acquire and operate a branch in this State
 
20 pursuant to this section shall provide to the commissioner
 
21 written notice of the proposed transaction not later than the
 
22 date on which the bank applies to the responsible federal bank
 
23 supervisory agency for approval to establish or acquire the
 

 
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 1 branch.  The filing of the notice shall be accompanied by a
 
 2 filing fee of $9,000 or a greater amount as the commissioner may
 
 3 establish by rule pursuant to chapter 91.  The filing fee shall
 
 4 be non-refundable.
 
 5      (d)  No branch of an out-of-state bank may be established or
 
 6 acquired in this State under this section, unless:
 
 7      (1)  The out-of-state bank confirms in writing to the
 
 8           commissioner that as long as it maintains a branch in
 
 9           this State, it shall comply with all applicable laws of
 
10           this State;
 
11      (2)  The applicant provides to the commissioner satisfactory
 
12           evidence of compliance with the applicable requirements
 
13           of chapter 415 relating to foreign corporations; and
 
14      (3)  The commissioner, acting within thirty days after
 
15           receiving notice of an application under subsection
 
16           (c), certifies to the responsible federal bank
 
17           supervisory agency that the requirements of this
 
18           article have been met."
 
19      SECTION 3. Statutory material to be repealed is bracketed.
 
20 New statutory material is underscored.
 
21       SECTION 4. This Act, upon its approval, shall take effect
 
22 on January 1, 2001.