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S.B. 222 Enrolled
AN ACT RELATING TO FINANCIAL INSTITUTIONS; CREATING THE BOARD OF BANK
ADVISORS; CLARIFYING DEFINITIONS; ADDRESSING PER DIEM ASSESSMENTS FOR
EXAMINATIONS; ADDRESSING DISCLOSURE OF INFORMATION; ADDRESSING DAYS
ON WHICH DEPOSITORY INSTITUTIONS ARE CLOSED; ADDRESSING STAY OF
PROCEEDINGS AGAINST INSTITUTIONS; CLARIFYING REFERENCES TO RULES;
ADDRESSING RESTRICTIONS ON BANKS' COLLATERAL AND LOAN PRACTICES;
CLARIFYING CREDIT UNION SUPERVISORY COMMITTEE DUTIES; AND MAKING
TECHNICAL CHANGES.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
7-1-103, as last amended by Chapter 111, Laws of Utah 1997
7-1-401, as last amended by Chapter 144, Laws of Utah 1999
7-1-501, as last amended by Chapter 49, Laws of Utah 1995
7-1-802, as last amended by Chapter 182, Laws of Utah 1996
7-1-808, as enacted by Chapter 200, Laws of Utah 1994
7-2-7, as last amended by Chapter 267, Laws of Utah 1989
7-3-19, as last amended by Chapter 8, Laws of Utah 1983
7-3-20, as last amended by Chapter 8, Laws of Utah 1983
7-5-5, as last amended by Chapter 161, Laws of Utah 1987
7-9-23, as last amended by Chapter 182, Laws of Utah 1996
7-18a-207, as enacted by Chapter 63, Laws of Utah 1996
ENACTS:
7-3-40, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 7-1-103 is amended to read:
7-1-103. Definitions.
As used in this title:
(1) (a) "Bank" means a person authorized under the laws of this state, another state, or the
United States to accept deposits from the public.
(b) "Bank" does not include:
(i) a federal savings and loan association or federal savings bank;
(ii) a savings and loan association or savings bank subject to Chapter 7;
(iii) an industrial loan corporation subject to Chapter 8;
(iv) a federally chartered credit union; or
(v) a credit union subject to Chapter 9.
(2) "Banking business" means the offering of deposit accounts to the public and the conduct
of such other business activities as may be authorized by this title.
(3) (a) "Branch" means a place of business of a financial institution, other than its main office,
at which deposits are received and paid.
(b) "Branch" does not include:
(i) an automated teller machine, as defined in Section 7-16a-102 ;
(ii) a point-of-sale terminal, as defined in Section 7-16a-102 ; or
(iii) a loan production office under Section 7-1-715 .
(4) "Commissioner" means the Commissioner of Financial Institutions.
(5) "Control" means the power, directly or indirectly, to:
(a) direct or exercise a controlling influence over the management or policies of a financial
institution, or over the election of a majority of the directors or trustees of an institution;
(b) vote 20% or more of any class of voting securities of a financial institution by an
individual; or
(c) vote more than 5% of any class of voting securities of a financial institution by a person
other than an individual.
(6) "Credit union" means a cooperative, nonprofit association incorporated under:
(a) Chapter 9; or
(b) 12 U.S.C. Sec. 1751 et seq., Federal Credit Union Act, as amended.
(7) "Department" means the Department of Financial Institutions.
(8) "Depository institution" means a bank, savings and loan association, savings bank,
industrial loan corporation, credit union, or other institution that holds or receives deposits, savings,
or share accounts, or issues certificates of deposit, or provides to its customers other depository
accounts that are subject to withdrawal by checks, drafts, or other instruments or by electronic means
to effect third party payments.
(9) (a) "Depository institution holding company" means:
(i) a person other than an individual that has control over any depository institution or that
becomes a holding company of a depository institution under Section 7-1-703 ; or
(ii) a person other than an individual that the commissioner finds, after considering the
specific circumstances, is exercising or is capable of exercising a controlling influence over a
depository institution by means other than those specifically described in this section.
(b) Except as provided in Section 7-1-703 , a person is not a depository institution holding
company solely because it owns or controls shares acquired in securing or collecting a debt previously
contracted in good faith.
(10) "Financial institution" means any institution subject to the jurisdiction of the department
because of this title.
(11) (a) "Financial institution holding company" means a person, other than an individual that
has control over any financial institution or any person that becomes a financial institution holding
company under this chapter, including an out-of-state or foreign depository institution holding
company.
(b) Ownership of a service corporation or service organization by a depository institution
does not make that institution a financial institution holding company.
(c) A person holding 5% or less of the voting securities of a financial institution is rebuttably
presumed not to have control of the institution.
(d) A trust company is not a holding company solely because it owns or holds 20% or more
of the voting securities of a financial institution in a fiduciary capacity, unless the trust company
exercises a controlling influence over the management or policies of the financial institution.
(12) "Foreign depository institution" means a depository institution chartered or authorized
to transact business by a foreign government.
(13) "Foreign depository institution holding company" means the holding company of a
foreign depository institution.
(14) "Home state" means:
(a) for a state chartered depository institution, the state that charters the institution;
(b) for a federally chartered depository institution, the state where the institution's main office
is located; and
(c) for a depository institution holding company, the state in which the total deposits of all
depository institution subsidiaries are the largest.
(15) "Host state" means:
(a) for a depository institution, a state, other than the institution's home state, where the
institution maintains or seeks to establish a branch; and
(b) for a depository institution holding company, a state, other than the depository institution
holding company's home state, where the depository institution holding company controls or seeks
to control a depository institution subsidiary.
(16) "Industrial loan corporation" means a corporation [
the business of an industrial loan corporation under Chapter 8.
(17) "Insolvent" means the status of a financial institution that is unable to meet its
obligations as they mature.
(18) "Institution" means a corporation, limited liability company, partnership, trust,
association, joint venture, pool, syndicate, unincorporated organization, or any form of business
entity.
(19) "Institution subject to the jurisdiction of the department" means an institution or other
person described in Section 7-1-501 .
(20) "Liquidation" means the act or process of winding up the affairs of an institution subject
to the jurisdiction of the department by realizing upon assets, paying liabilities, and appropriating
profit or loss, as provided in Chapters 2 and 19.
(21) "Liquidator" means a person, agency, or instrumentality of this state or the United States
appointed to conduct a liquidation.
(22) (a) "Member of a savings and loan association" means:
(i) a person holding a savings account of a mutual association;
(ii) a person borrowing from, assuming, or becoming obligated upon a loan or an interest in
a loan held by a mutual association; or
(iii) any person or class of persons granted membership rights by the articles of incorporation
or the bylaws of an association.
(b) A joint and survivorship or other multiple owner or borrower relationship constitutes a
single membership.
(23) "Negotiable order of withdrawal" means a draft drawn on a NOW account.
(24) (a) "NOW account" means a savings account from which the owner may make
withdrawals by negotiable or transferable instruments for the purpose of making transfers to third
parties.
(b) A NOW account is not a demand deposit. Neither the owner of a NOW account nor any
third party holder of an instrument requesting withdrawal from the account has a legal right to make
withdrawal on demand.
(25) "Out-of-state" means, in reference to a depository institution or depository institution
holding company, an institution or company whose home state is not Utah.
(26) "Person" means an individual, corporation, limited liability company, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, or any
form of business entity.
(27) "Receiver" means a person, agency, or instrumentality of this state or the United States
appointed to administer and manage an institution subject to the jurisdiction of the department in
receivership, as provided in Chapters 2 and 19.
(28) "Receivership" means the administration and management of the affairs of an institution
subject to the jurisdiction of the department to conserve, preserve, and properly dispose of the assets,
liabilities, and revenues of an institution in possession, as provided in Chapters 2 and 19.
(29) "Savings account" means any deposit or other account at a depository institution that
is not a transaction account.
(30) "Savings and loan association" means a mutual or capital stock savings association, a
savings and loan association, a mutual or capital stock savings bank, or a building and loan
association subject to this title, including all federal associations and all out-of-state associations, as
defined in Section 7-7-2 .
(31) "Service corporation" or "service organization" means a corporation or other business
entity owned or controlled by one or more financial institutions that is engaged or proposes to engage
in business activities related to the business of financial institutions.
(32) "State" means, unless the context demands otherwise, a state, the District of Columbia,
or the territories of the United States.
(33) "Subsidiary" means a business entity under the control of an institution.
(34) (a) "Transaction account" means a deposit, account, or other contractual arrangement
in which a depositor, account holder, or other customer is permitted, directly or indirectly, to make
withdrawals by check or other negotiable or transferable instrument, by payment order of withdrawal,
by telephone transfer, by other electronic means, or by any other means or device for the purpose of
making payments or transfers to third persons.
(b) "Transaction account" includes:
(i) demand deposits;
(ii) NOW accounts;
(iii) savings deposits subject to automatic transfers; and
(iv) share draft accounts.
(35) "Trust company" means a person authorized to conduct a trust business, as provided
in Chapter 5.
(36) "Utah depository institution" means a depository institution whose home state is Utah.
(37) "Utah depository institution holding company" means a depository institution holding
company whose home state is Utah.
Section 2. Section 7-1-401 is amended to read:
7-1-401. Fees payable to commissioner.
(1) Each depository institution under the jurisdiction of the department, except an
out-of-state depository institution with a branch in Utah, shall pay an annual fee computed upon the
basis of aggregate assets, as shown upon the year-end report of condition at the following rates:
(a) on the first $5,000,000 of these assets, 65 cents per $1,000 or $500, whichever is greater;
(b) on the next $10,000,000 of these assets, 35 cents per $1,000;
(c) on the next $35,000,000 of these assets, 15 cents per $1,000;
(d) on the next $50,000,000 of these assets, 12 cents per $1,000;
(e) on the next $200,000,000 of these assets, 10 cents per $1,000;
(f) on the next $300,000,000 of these assets, 6 cents per $1,000; and
(g) on all amounts over $600,000,000 of these assets, 4 cents per $1,000.
(2) A financial institution with a trust department shall pay a fee for each examination of the
trust department by state examiners.
(3) A credit union in its first year of operation shall pay a basic fee of $25 instead of the fee
required under Subsection (1).
(4) A trust company that is not a depository institution or a subsidiary of a depository
institution holding company shall pay an annual fee of $500 and an additional fee for each
examination by state examiners.
(5) All other persons and institutions under the jurisdiction of the department that do not pay
a fee under Subsections (1) through (4) shall pay:
(a) an annual fee of $100; and
(b) an additional fee for each examination by state examiners.
(6) An applicant under Section 7-1-503 , 7-1-702 , 7-1-703 , 7-1-704 , 7-1-713 , 7-5-3 , or
7-18a-202 shall pay:
(a) a filing fee of $500; and
(b) all reasonable expenses incurred in processing the application.
(7) (a) Per diem assessments for examinations shall be calculated at the rate of $40 per hour:
(i) for each examiner [
(ii) per hour worked.
(b) For examination of branches or offices of financial institutions located outside of this
state, in addition to the per diem assessment under Subsection (7) the institution shall [
reasonable travel, lodging, and other expenses incurred by each examiner while conducting the
examination.
(8) A person registering under Section 7-23-103 shall pay an original registration fee of $300.
Section 3. Section 7-1-501 is amended to read:
7-1-501. Institutions and persons subject to jurisdiction of department.
The following persons and institutions are subject to the jurisdiction of the department and
are subject to supervision and examination by the department as provided in this title and the rules
of the department:
(1) all depository institutions chartered under the laws of this state, including any out-of-state
branches;
(2) all Utah depository institutions chartered by the federal government, but only to the extent
the application of this title is authorized by:
(a) federal law; or [
(b) the appropriate federal regulatory agency;
(3) all Utah branches of out-of-state depository institutions chartered under the laws of
another state;
(4) all Utah branches of out-of-state depository institutions chartered by the federal
government, but only to the extent the application of this title is authorized by:
(a) federal law; or [
(b) the appropriate federal regulatory agency;
(5) all service corporations and service organizations;
(6) all trust companies;
(7) all escrow companies;
(8) all persons or institutions engaged in this state in the business of:
(a) guaranteeing or insuring deposits, savings accounts, share accounts, or other accounts
in depository institutions;
(b) operating a loan production office for a Utah depository institution, an out-of-state
depository institution, or a foreign depository institution; [
(c) allowing persons to effect third party payments from loan, charge, or other accounts by
checks, drafts, or other instruments or by electronic means; or
(d) a check casher, as defined in Section 7-23-102 ;
(9) all corporations or other business entities owning or controlling an institution subject to
the jurisdiction of the department;
(10) all subsidiaries and affiliates of an institution subject to the jurisdiction of the
department; and
(11) any person or institution that, with or without authority to do so, transacts business as,
or holds itself out as being, a depository institution, trust company, or any other person or institution
described in this section as being subject to the jurisdiction of the department.
Section 4. Section 7-1-802 is amended to read:
7-1-802. Confidentiality of information received by department -- Availability of
information.
(1) The commissioner shall receive and place on file in the department's office all reports
required by law and shall certify all reports required to be published.
(2) Except as provided in this section, the following are confidential, not public records, and
not open to public inspection:
(a) all reports received or prepared by the department[
(b) all information obtained from an institution or person under the jurisdiction of the
department[
(c) all orders and related records of the department [
(3) The following records and information are public and are open to public inspection:
(a) reports of condition required by Section 7-1-318 ;
(b) information that is otherwise generally available to the public; and
(c) information contained in, and final decisions on, an application filed under Sections
7-1-702 , 7-1-703 , 7-1-704 , 7-1-705 , 7-1-706 , 7-1-708 , 7-1-709 , 7-1-712 , 7-1-713 , or Chapter 19,
excluding:
(i) proprietary information, business plans, and personal financial information; and
(ii) information for which:
(A) the applicant requests confidentiality[
(B) the commissioner grants the request for confidentiality.
(4) The department may disclose records and information that are not public to the following:
(a) to an agency or authority:
(i) that regulates:
(A) the subject of the record; or
(B) an affiliate of the subject of the record, as defined by the commissioner by rule; and
(ii) is of:
(A) the federal government;
(B) the state; or [
(C) another state [
(b) to a federal deposit insurance agency;
(c) to an official legally authorized to investigate criminal charges in connection with the
affairs of the subject of the record, and to any tribunal conducting legal proceedings resulting from
such an investigation;
(d) to a person preparing a proposal for merging or acquiring an institution under Chapter
2 or 19, but only after the department provides notice of the disclosure to the institution;
(e) to any other person, if the commissioner determines, after notice to the institution or
person that is the subject of the record and opportunity for hearing, that the interests favoring
disclosure of the information outweigh the interests favoring confidentiality of the information; and
(f) to any court in a proceeding under:
(i) Sections 7-1-304 , 7-1-320 , 7-1-322 [
(ii) a supervisory action under Chapter 2 or 19.
(5) The commissioner may limit the use and further disclosure of any information disclosed
under Subsection (4):
(a) to protect the business confidentiality interest of the subject of the record; and
(b) to protect the public interest, such as to avoid:
(i) a liquidity crisis in a depository institution; or [
(ii) undue speculation in securities or currency markets.
(6) The department shall disclose information in the manner and to the extent directed by a
court order signed by a judge from a court of competent jurisdiction if:
(a) the disclosure does not violate applicable federal or state law;
(b) the information to be disclosed deals with a matter in controversy over which the court
has jurisdiction;
(c) the person requesting the order has provided reasonable prior written notice to the
commissioner;
(d) the court has considered the merits of the request for disclosure and has determined that
the interests favoring disclosure of the information outweigh the interests favoring confidentiality of
the information; and
(e) the court has appropriately limited the use and further disclosure of the information:
(i) to protect the business confidentiality interest of the subject of the record; and
(ii) to protect the public interest, such as to avoid:
(A) a liquidity crisis in a depository institution; or [
(B) undue speculation in securities or currency markets.
Section 5. Section 7-1-808 is amended to read:
7-1-808. Closing days for depository institutions.
(1) Depository institutions shall be closed to the general public on [
[
[
(2) (a) The commissioner may designate any additional or different day on which depository
institutions are closed to the general public, such as in the event of:
(i) an emergency[
(ii) disaster[
(iii) flood[
(iv) earthquake[
(v) fire[
(vi) power outage[
(vii) heavy snow[
(viii) other impediment to:
(A) business; or
(B) the safety of customers and employees[
(ix) any circumstance in which closing on an additional or different day serves the public
interest.
(b) The commissioner may designate [
to all or any portion of the state.
(3) (a) A depository institution may elect to be open or closed to the general public during
business hours of its choosing on any day not designated under this section as a day for closing.
(b) A depository institution shall provide adequate notice to its customers or members of any
change from normal business hours.
Section 6. Section 7-2-7 is amended to read:
7-2-7. Stay of proceedings against institution -- Relief.
(1) Except as otherwise specified, a taking of an institution or other person by the
commissioner or a receiver or liquidator appointed by the commissioner under this chapter operates
as a stay of the commencement or continuation of the following with respect to the institution[
(a) any judicial, administrative, or other proceeding, including service of process;
(b) the enforcement of any judgment;
(c) any act to obtain possession of property;
(d) any act to create, perfect, or enforce any lien against property of the institution;
(e) any act to collect, assess, or recover a claim against the institution; and
(f) the setoff of any debt owing to the institution against any claim against the institution.
(2) Except as provided in Subsections (3), (4), (5), and (8):
(a) the stay of any action against property of the institution continues until the institution has
no interest in the property; and
(b) the stay of any other action continues until the earlier of when the case is:
(i) closed; or
(ii) dismissed[
(3) On the motion of any party in interest and after notice and a hearing, the court may
terminate, annul, modify, condition, or otherwise grant relief from the stay:
(a) for cause, including the lack of adequate protection of an interest in property of the party
in interest; or
(b) with respect to a stay of any action against property if:
(i) the institution does not have an equity interest in the property; and
(ii) the property would have no value in a reorganization or liquidation of the institution.
(4) (a) Thirty days after a request under Subsection (3) for relief from the stay of any act
against property of the institution, the stay is terminated with respect to the party in interest making
the request unless the court, after notice and a hearing, orders the stay continued in effect pending
the conclusion of, or as a result of, a final hearing and determination under Subsection (3).
(b) A hearing under this Subsection (4) may be:
(i) a preliminary hearing[
(ii) consolidated with the final hearing under Subsection (3).
(c) The court shall order the stay continued in effect pending the conclusion of the final
hearing under Subsection (3) if there is a reasonable likelihood that the party opposing relief from the
stay will prevail at the conclusion of the final hearing.
(d) If the hearing under this Subsection (4) is a preliminary hearing, [
shall be commenced not later than 30 days after the conclusion of the preliminary hearing.
(5) Upon request of a party in interest, the court, with or without a hearing, may grant relief
from the stay provided under Subsection (1) to the extent necessary to prevent irreparable damage
to the interest of an entity in property, if the interest will or could be damaged before there is an
opportunity for notice and a hearing under Subsection (3) or (4).
(6) In any hearing under Subsection (3) or (4) concerning relief from the stay of any act under
Subsection (1):
(a) the party requesting relief has the burden of proof on the issue of the institution's equity
in property; and
(b) the party opposing relief has the burden of proof on all other issues.
(7) A person injured by any willful violation of a stay provided by this section shall recover
actual damages, including costs and attorneys' fees and, when appropriate, may recover punitive
damages.
(8) Nothing in this section prevents the holder or the trustee for any holder of any bond, note,
debenture, or other evidence of indebtedness issued by a city, county, municipal corporation,
commission, district, authority, agency, subdivision, or other public body pursuant to [
it may have to sell, take possession of, foreclose upon, or enforce a lien against or security interest
in property of an institution [
that bond, note, debenture, or evidence of indebtedness, or as collateral for a letter of credit or other
instrument issued in support of that bond, note, debenture, or evidence of indebtedness.
(9) Notice of any hearing under this section shall be served as provided in Subsection
7-2-9 (6).
Section 7. Section 7-3-19 is amended to read:
7-3-19. Limitations on loans and extensions of credit.
(1) The total loans and extensions of credit by any bank to any person outstanding at one time
and not fully secured, as determined in a manner consistent with Subsection (2), by collateral having
a market value at least equal to the amount of the loan or extension of credit may not exceed 15%
of the amount of the bank's total capital.
(2) (a) The total loans and extensions of credit by a bank to a person outstanding at one time
and fully secured by readily marketable collateral having a market value, as determined by reliable and
continuously available price quotations, at least equal to the amount of the funds outstanding may not
exceed 10% of the total capital of the bank. [
(b) The limitation of Subsection (2)(a) is separate from and in addition to the limitation
described in Subsection (1).
(3) (a) The limitations contained in Subsections (1) and (2) are subject to exceptions the
commissioner may prescribe by [
(b) A rule made under this section may not be inconsistent with law and regulations
applicable to loan restrictions on national banks.
(4) (a) The commissioner may, by rule [
of credit" and "person" as used in this section. [
(b) The definitions described under Subsection (4)(a) may not be inconsistent with those
applicable to national banks.
Section 8. Section 7-3-20 is amended to read:
7-3-20. Bank acquiring, holding, or accepting as collateral its own stock -- Loans to
or investment in affiliates.
(1) [
own [
of the [
(b) If a bank acquires stock as permitted under Subsection (1)(a), the bank shall sell the stock
within 12 months from the date of [
(c) The [
may not exceed 10% of the total capital [
(2) [
(i) make any loan or any extension of credit to any of its affiliates; [
(ii) invest any of its funds in the capital stock, bonds, debentures, or other obligations of any
affiliate; or [
(iii) accept the capital stock, bonds, debentures, or other obligations of any affiliate as
collateral security for advances made to any person unless authorized by the commissioner by
[
(b) The exception of Subsection (2)(a)(iii) may not be inconsistent with similar exceptions
applicable to national banks under federal law.
Section 9. Section 7-3-40 is enacted to read:
7-3-40. Board of Bank Advisors.
(1) There is created a Board of Bank Advisors consisting of five members to be appointed
by the governor as follows:
(a) each member of the board shall be an individual who is familiar with and associated with
banks organized under this chapter; and
(b) at least three of the members of the board shall be individuals who:
(i) have had three or more years experience as a bank executive officer; and
(ii) are selected from a list submitted to the governor by an association in this state
representing commercial banks.
(2) (a) The board shall meet quarterly.
(b) Subject to Subsection (2)(a), meetings of the board shall be held on the call of the chair.
(3) The members of the board shall elect the chair of the board each year from the
membership of the advisory board by a majority of the members present at the board's first meeting
each year.
(4) (a) Except as required by Subsection (4)(b), as terms of current board members expire,
the governor shall appoint each new member or reappointed member to a four-year term.
(b) Notwithstanding the requirements of Subsection (4)(a), the governor shall, at the time
of appointment or reappointment, adjust the length of terms to ensure that the terms of board
members are staggered so that approximately half of the board is appointed every two years.
(5) When a vacancy occurs in the membership of the board for any reason, the replacement
shall be appointed for the unexpired term.
(6) All members shall serve until their successors are appointed and qualified.
(7) (a) Members shall receive no compensation or benefits for their services, but may receive
per diem and expenses incurred in the performance of the member's official duties at the rates
established by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
(b) Members may decline to receive per diem and expenses for their service.
(8) A majority of the members of the board shall constitute a quorum.
(9) The board has the duty to advise the governor and commissioner on problems relating
to banks organized under this chapter and to foster the interest and cooperation of banks in the
improvement of their services to the people of the state.
Section 10. Section 7-5-5 is amended to read:
7-5-5. Revocation of trust authority -- Procedure.
(1) (a) The commissioner may issue and serve upon a trust company a notice of intent to
revoke the authority of the trust company to exercise the powers granted by this chapter, if, in [
the commissioner's opinion:
(i) the trust company is unlawfully or unsoundly exercising the powers granted under this
chapter;
(ii) has unlawfully or unsoundly exercised the powers granted under this chapter;
(iii) has failed, for a period of five consecutive years, to exercise the powers granted by this
chapter;
(iv) fails or has failed to comply with requirements upon which its permit is conditioned; or
(v) fails or has failed to comply with any rule of the commissioner.
(b) The notice shall:
(i) contain a statement of the facts constituting the alleged unlawful or unsound exercise of
powers, or failure to exercise powers, or failure to comply[
(ii) fix the time and place at which a hearing will be held to determine whether an order
revoking authority to execute those powers should issue against the trust company.
(2) (a) If the trust company or its representative does not appear at the hearing, the
commissioner may consider the trust company to be in default, and may issue a revocation order.
(b) If default has occurred, or if upon the record made at any hearing the commissioner finds
that any allegation specified in the notice of charges has been established, the commissioner shall issue
and serve upon the trust company an order:
(i) prohibiting it from accepting any new or additional trust accounts; and
(ii) revoking its authority to exercise any powers granted under this chapter.
(c) Any order issued under this section permits the trust company to continue to service all
previously accepted trust accounts pending their expeditious divestiture or termination.
(3) A revocation order shall become effective 30 days after service of the order upon the trust
company and shall remain effective and enforceable, unless it is stayed, modified, terminated, or set
aside by action of the commissioner or by [
Section 7-1-714 .
Section 11. Section 7-9-23 is amended to read:
7-9-23. Supervisory committee -- Duties -- Suspension or removal of officer, director,
or credit committee member.
(1) (a) Appointees to the supervisory committee shall hold office until the next annual
meeting of the members and until successors are appointed.
(b) One member of the board of directors, except the chair of the board and the president,
may be appointed to the supervisory committee.
(c) The president and other employees of the credit union may not be appointed to the
supervisory committee.
(2) (a) The commissioner may remove any member of the supervisory committee for:
(i) any violation of this chapter or the bylaws of the credit union;
(ii) failure to fulfill the duties of office;
(iii) malfeasance; or
(iv) maladministration in office.
(b) The board of directors shall fill any vacancy created by removal of a supervisory
committee member.
(3) It is the duty of the supervisory committee to:
(a) make or cause to be made an examination of the affairs of the credit union at least
annually, including an inspection of the credit union's books, securities, cash, accounts, and loans;
(b) investigate or cause to be investigated any complaint that action by the credit union, board
of directors, committees, officers, or employees does not comply with the law or the credit union's
bylaws;
(c) make or cause to be made supplemental audits and examinations it considers necessary,
or as required by the commissioner or board of directors;
(d) make a written report to the board of directors of its findings following each audit or
examination; and
(e) make or cause to be made [
(i) annually by statistical sampling or otherwise, in accordance with generally accepted
accounting principles[
(ii) at least every two years by a complete verification [
(4) (a) The supervisory committee may, by majority vote, recommend to the board of
directors:
(i) the suspension or removal of a credit union officer or a member of the credit committee;
or
(ii) any other action the board of directors could lawfully take.
(b) Within 30 days after submission of the recommendation to the board of directors, if the
board fails to adopt the material aspects of the recommendation, the supervisory committee may, by
unanimous vote and after notifying the commissioner, call a meeting of the credit union members to
consider the recommendation. The members may, by majority vote of those present at the meeting,
adopt the supervisory committee's recommendation.
(5) (a) The supervisory committee may, by unanimous vote, suspend or remove a director
for any violation of this chapter or the bylaws of the credit union, malfeasance, or maladministration
in office.
(b) Within 30 days after the suspension or removal of a director, the supervisory committee
shall, after notifying the commissioner, call a special meeting to present the matter to the membership
of the credit union. The members may, by majority vote of those present, ratify or reject the action
of the supervisory committee. If the members vote to remove the director, they may at the same
meeting elect a replacement. If the members vote to reject the suspension or removal, they shall
reinstate the director.
(6) The bylaws may prescribe other duties and responsibilities of the supervisory committee.
Section 12. Section 7-18a-207 is amended to read:
7-18a-207. Annual renewal of certificate of authority.
(1) A foreign depository institution may renew a certificate of authority, issued under Section
7-18a-202 , to transact business in this state through an agency, branch, or representative office in a
form prescribed by the commissioner.
(2) The application for renewal shall be submitted to the department no later than 60 days
before the expiration of the certificate of authority.
(3) The certificate of authority may be renewed by the commissioner upon a determination,
with or without examination, that the foreign depository institution:
(a) is in a safe and sound condition; and
(b) has complied with applicable provisions of the law.
(4) An application for renewal of certificate of authority shall be accompanied by the annual
fee required by Subsection 7-1-401 [
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