H.B. 263 Enrolled

INTERSTATE BRANCHING OF DEPOSITORY INSTITUTION
2001 GENERAL SESSION
STATE OF UTAH
Sponsor: Kevin S. Garn
This act modifies the Financial Institutions Code to permit de novo branching in Utah under
limited circumstances and to make technical changes.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
7-1-702, as repealed and reenacted by Chapter 49, Laws of Utah 1995
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 7-1-702 is amended to read:
7-1-702. Interstate acquisition, merger, and branching.
(1) A Utah depository institution or its holding company may acquire control of, acquire
all or substantially all the assets of, or merge with:
(a) an out-of-state depository institution; or [its]
(b) a holding company of an out-of-state depository institution.
(2) An out-of-state depository institution or its holding company may acquire control of,
acquire all or substantially all the assets of, or merge with:
(a) a Utah depository institution; or [its]
(b) a holding company of a Utah depository institution.
(3) A Utah depository institution may acquire, through merger or otherwise, a branch of
a depository institution in another state without acquiring:
(a) the depository institution [itself] in the other state; or [its]
(b) the charter of the depository institution described in Subsection (3)(a).
(4) An out-of-state depository institution may acquire, through merger or otherwise, a
branch of a depository institution in Utah without acquiring:
(a) the Utah depository institution [itself]; or [its]
(b) the charter of the Utah depository institution.
(5) (a) A Utah depository institution may establish a de novo branch in any state that

allows de novo interstate branching as described in 12 U.S.C. Secs. 36(g) and 1828(d)(4), as
amended.
(b) [De] Except as provided in Subsection (5)(c), de novo interstate branching [into] in Utah
is prohibited.
(c) An out-of-state depository institution may establish a de novo branch in Utah if the home
state of that out-of-state depository institution permits a Utah state chartered depository institution
to establish and maintain a de novo branch in that home state under substantially the same terms and
conditions as that out-of-state depository institution establishes its de novo branch in Utah.
(6) [A] (a) Any of the following may do anything described in Subsection (6)(b):
(i) a Utah depository institution or holding company that acquires an out-of-state depository
institution[, or];
(ii) a Utah depository institution that is the resulting depository institution after merging with
an out-of-state depository institution[,]; or
(iii) a Utah depository institution that otherwise establishes or acquires a branch in a host
state[,].
(b) A depository institution or holding company described in Subsection (6)(a) may do any
of the following in accordance with applicable state and federal law, including the law of the host
state:
[(a)] (i) continue to operate the out-of-state depository institution or branch;
[(b)] (ii) convert any existing main office or branch in the host state into a branch of the Utah
depository institution;
[(c)] (iii) establish or acquire additional branches of the Utah depository institution in any
state where the out-of-state depository institution could have done so if [it] the out-of-state
depository institution had not been acquired or merged; and
[(d)] (iv) exercise any power and engage in any activity in a host state to the same extent as
a depository institution of the same class whose home state is that state.
(7) [An] (a) Any of the following may do anything described in Subsection (7)(b):
(i) an out-of-state depository institution or holding company that acquires a Utah depository

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institution[, or];
(ii) an out-of-state depository institution that is the resulting depository institution after
merging with a Utah depository institution[,]; or
(iii) an out-of-state depository institution that otherwise establishes or acquires a branch in
Utah[,].
(b) A depository institution or holding company described in Subsection (7)(a) may do any
of the following in accordance with applicable state and federal law, including the law of this state:
[(a)] (i) continue to operate the Utah depository institution or branch;
[(b)] (ii) convert any existing main office or branch in Utah into a branch of the out-of-state
depository institution;
[(c)] (iii) establish or acquire additional branches of the out-of-state depository institution
in any state where the Utah depository institution could have done so if [it] the Utah depository
institution had not been acquired or merged; and
[(d)] (iv) exercise any power and engage in any activity in this state to the same extent as a
depository institution of the same class whose home state is Utah.
(8) (a) A Utah branch of an out-of-state depository institution shall comply with:
(i) the law of the institution's home state[,]; or [comply with]
(ii) the federal law in the case of a federally chartered institution.
(b) If the laws of this state as a host state conflict with the laws of another state as a home
state, the laws of the home state prevail except as provided in this section.
[(b)] (c) The commissioner may order that Utah law prevails over home state law if the
application of Utah law is necessary to:
(i) preserve the safe and sound operation of the Utah branch;
(ii) prevent significant competitive disadvantage to Utah depository institutions in local
financial markets; or
(iii) otherwise protect the citizens of this state.
[(c)] (d) The laws of this state regarding community reinvestment, consumer protection, fair
lending, and intrastate branching apply to a Utah branch of an out-of-state depository institution to

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the same extent as those laws apply to a Utah branch of a depository institution chartered by this
state.
[(d)] (e) An out-of-state depository institution authorized to operate a branch in Utah may
underwrite or sell insurance, engage in the direct marketing of securities, or engage in the brokerage
of real estate only to the extent permissible for a Utah depository institution of the same class.
(9) Subsection (8) does not affect the jurisdiction or authority of the commissioner to:
(a) examine, supervise, and regulate an out-of-state depository institution operating or
seeking to operate a branch in this state; or [to]
(b) take any action or issue any order with regard to [that] a branch described in Subsection
(9)(a).
(10) The acquisition of a charter entitles the acquiring institution to engage in any activity
the acquired institution could have engaged in if [it] the acquired institution had not been acquired,
so long as the acquiring institution does not convert the acquired institution into, or operate it as, an
institution of a different class.
(11) (a) The activities authorized in this section are subject to:
(i) the limitations for mergers and acquisitions set forth in Sections 7-1-703 and 7-1-705 [,];
and
(ii) the limitations for branching set forth in Section 7-1-708 .
(b) An institution shall file all required applications and receive all appropriate approvals
before engaging in any of the activities authorized in this section.
(12) An out-of-state depository institution that operates a branch in this state shall:
(a) maintain a certificate of authority to transact business in this state [and];
(b) comply with all [other] applicable corporate filing requirements under Title 16, Chapter
10a, Utah Revised Business Corporation Act, to the same extent as any nondepository corporation
transacting business in this state; and
[(b)] (c) provide written notification to the department of [its] the out-of-state depository
certificate of authority to transact business in this state.

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