1     
BUSINESS TRANSACTIONS AMENDMENTS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Curtis S. Bramble

5     
House Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to transactions involving banks and gift cards.
10     Highlighted Provisions:
11          This bill:
12          ▸     permits a state-chartered bank to sell to another Federal Deposit Insurance
13     Corporation insured financial institution;
14          ▸     removes the prohibition on a pawn or secondhand business purchasing gift cards.
15     Money Appropriated in this Bill:
16          None
17     Other Special Clauses:
18          None
19     Utah Code Sections Affected:
20     AMENDS:
21          13-32a-103.1, as enacted by Laws of Utah 2019, Chapter 309
22          13-32a-104, as last amended by Laws of Utah 2022, Chapter 201
23     ENACTS:
24          7-3-41, Utah Code Annotated 1953
25     

26     Be it enacted by the Legislature of the state of Utah:
27          Section 1. Section 7-3-41 is enacted to read:

28          7-3-41. Sale of bank.
29          (1) As used in this section:
30          (a) "Business combination" means the same as that term is defined in Section
31     16-10a-1802.
32          (b) "Surviving entity" means an entity into which one or more other entities are
33     merged, whether the entity existed before the merger or is created by the merger.
34          (2) (a) Subject to the requirements of this section, a bank chartered under this chapter
35     may, with the approval of the commissioner:
36          (i) enter into a business combination with another bank, savings bank, savings and loan
37     association, or other entity; or
38          (ii) sell or transfer all, or substantially all, of the bank's assets, liabilities, and
39     businesses to another bank, savings bank, savings and loan association, or other entity.
40          (b) The buyer or transferee, or surviving entity of a bank that enters into a business
41     combination, shall be a financial institution insured by the Federal Deposit Insurance
42     Corporation.
43          (c) The terms and conditions of the transaction shall be lawfully agreed upon, adopted,
44     and approved in accordance with:
45          (i) Title 16, Chapter 10a, Part 11, Merger and Share Exchange; or
46          (ii) Title 16, Chapter 10a, Part 18, Business Combinations.
47          (d) The capital stock of the surviving entity shall be not less than required under
48     applicable law for the surviving entity.
49          (e) All the rights, franchises, interests, property, and choses in action of the combined
50     entities shall be deemed transferred to and vested in the surviving entity without any deed or
51     other transfer.
52          (f) The surviving entity shall hold and enjoy the same and all rights of property,
53     franchises, and interests in the same manner and to the same extent as were held and enjoyed
54     by the institution combined under this section.
55          (3) (a) A national bank, state or federal savings and loan association, or state or federal
56     savings bank may apply for conversion into a state-chartered bank:
57          (i) upon the affirmative vote of the shareholders owning at least two-thirds of its
58     capital stock outstanding, or 51% or more of the total number of the members; and

59          (ii) at a meeting called by the directors, notice of which, specifying the purpose, shall
60     be given in the manner required by the bylaws, or in the absence of such bylaw, then by
61     sending the notice to each shareholder of record by registered mail at least ten days before the
62     meeting.
63          (b) (i) Upon an affirmative vote described in Subsection (3)(a), the converting
64     institution may apply for a certificate of authority by filing with the commissioner a certificate
65     signed by the converting institution's president and cashier.
66          (ii) The certificate described in Subsection (3)(b)(i) shall:
67          (A) set forth the corporate action required under this section; and
68          (B) assert that the institution has complied with applicable laws of the United States.
69          (c) The converting institution shall file with the commissioner the plan of conversion
70     and the proposed amendments to its articles of incorporation as approved by the stockholders
71     for the operation of the institution as a state-chartered bank.
72          (d) (i) Upon receipt of the required application, the commissioner shall examine all
73     facts associated with the conversion.
74          (ii) The expenses and cost incurred for an examination described in Subsection
75     (3)(d)(i) shall be paid by the institution applying for permission to convert.
76          (iii) The commissioner shall present the commissioner's findings and recommendations
77     to the Board of Bank Advisors for consideration.
78          (iv) Upon approval by Board of Bank Advisors, the commissioner shall issue a
79     certificate of authority to the applicant allowing the conversion to proceed.
80          (e) A bank, savings and loan association, or savings bank chartered under this chapter
81     may convert into, consolidate with, or merge with a national bank, with the national bank
82     charter surviving, without approval of the commissioner or Board of Bank Advisors or any
83     state authority.
84          (f) (i) Notwithstanding any provision of law to the contrary, if a bank, savings and loan
85     association, or savings bank chartered under this chapter has engaged or proposes to engage in
86     a business combination, sale, or transfer of substantially all assets that is not authorized under
87     this section, the commissioner shall enforce the provisions of this section by issuing a cease
88     and desist order.
89          (ii) The bank, savings and loan association, or savings bank may appeal a cease and

90     desist order described in Subsection (3)(f)(i) to district court if the appeal is filed within thirty
91     days from the date the order was issued.
92          Section 2. Section 13-32a-103.1 is amended to read:
93          13-32a-103.1. Transaction or gift cards.
94          (1) A retail business engaging in a transaction involving a transaction card or gift card
95     issued by that retail business and that bears the branding of that retail business is not subject to
96     this chapter.
97          (2) A pawn or secondhand business may not [purchase or] pawn a gift card or
98     transaction card.
99          (3) This chapter does not prohibit a pawn or secondhand business from issuing or
100     accepting as payment a gift card that:
101          (a) is issued solely by the pawn or secondhand business; and
102          (b) bears the brand or name of the pawn or secondhand business.
103          Section 3. Section 13-32a-104 is amended to read:
104          13-32a-104. Tickets required to be maintained -- Contents -- Identification of
105     items -- Exceptions -- Prohibition against pawning or selling certain property.
106          (1) A pawn or secondhand business shall keep a ticket for property a person pawns or
107     sells to the pawn or secondhand business. A pawn or secondhand business shall document on
108     the ticket the following information regarding the property:
109          (a) the date and time of the transaction;
110          (b) whether the transaction is a pawn or purchase;
111          (c) the ticket number;
112          (d) the date by which the property must be redeemed, if the property is pawned;
113          (e) the following information regarding the individual who pawns or sells the property:
114          (i) the individual's full name and date of birth as they appear on the individual's
115     identification and the individual's residence address and telephone number;
116          (ii) the unique number and type of identification presented to the pawn or secondhand
117     business;
118          (iii) the individual's signature; and
119          (iv) (A) subject to any rule made under Subsection (8), an electronic or tangible legible
120     fingerprint of the individual's right index finger, or if the right index finger cannot be

121     fingerprinted, a legible fingerprint of the individual with a notation identifying the fingerprint
122     and the reason why the right index fingerprint was unavailable; and
123          (B) notwithstanding the other provisions of this Subsection (1), an electronic legible
124     fingerprint is not required to be documented on the ticket;
125          (f) the amount loaned on, paid for, or value for trade-in of each article of property;
126          (g) the full name of the individual conducting the pawn transaction or secondhand
127     merchandise transaction on behalf of the pawn or secondhand business or the initials or a
128     unique identifying number of the individual, if the pawn or secondhand business maintains a
129     record of the initials or unique identifying number of the individual; and
130          (h) an accurate description of each article of property, with available identifying marks,
131     including:
132          (i) (A) names, brand names, numbers, serial numbers, model numbers, IMEI numbers,
133     color, manufacturers' names, and size;
134          (B) metallic composition, and any jewels, stones, or glass;
135          (C) any other marks of identification or indicia of ownership on the property;
136          (D) the weight of the property, if the payment is based on weight;
137          (E) any other unique identifying feature; and
138          (F) gold content, if indicated; or
139          (ii) if multiple articles of property of a similar nature are delivered together in one
140     transaction and the articles of property do not bear serial or model numbers and do not include
141     precious metals or gemstones, such as musical or video recordings, books, or hand tools, the
142     description of the articles is adequate if it includes the quantity of the articles and a description
143     of the type of articles delivered.
144          (2) (a) A pawn or secondhand business may not accept property if, upon inspection, it
145     is apparent that:
146          (i) a serial number or another form of indicia of ownership has been removed, altered,
147     defaced, or obliterated; or
148          (ii) the property is not a numismatic item and has indicia of being new, but is not
149     accompanied by a written receipt or other satisfactory proof of ownership other than the seller's
150     own statement[; or].
151          [(iii) except as provided in Subsection 13-32a-103.1(3), the property is a gift card,

152     transaction card, or other physical or digital card or certificate evidencing store credit.]
153          (b) A pawn or secondhand business is not subject to Subsection (2)(a)(ii) if the pawn or
154     secondhand business is the original seller of the property and is accepting a return of the
155     property as provided by the pawn or secondhand business' established return policy.
156          (c) Property is presumed to have had indicia of being new at the time of a transaction if
157     the property is subsequently advertised by the pawn or secondhand business as being new.
158          (3) (a) An individual may not pawn or sell any property to a business regulated under
159     this chapter if the property is subject to being turned over to a law enforcement agency in
160     accordance with Title 77, Chapter 24a, Lost or Mislaid Personal Property.
161          (b) If an individual attempts to sell or pawn property to a business regulated under this
162     chapter and the employee or owner of the business knows or has reason to know that the
163     property is subject to Title 77, Chapter 24a, Lost or Mislaid Personal Property, the employee or
164     owner shall advise the individual of the requirements of Title 77, Chapter 24a, Lost or Mislaid
165     Personal Property, and may not receive the property in pawn or sale.
166          (4) A coin dealer is subject to Section 13-32a-104.5 and not subject to this section.
167          (5) An automated recyling kiosk operator is subject to Section 13-32a-104.6 and is not
168     subject to this section.
169          (6) A catalytic converter purchaser is subject to Section 13-32a-104.7 and is not subject
170     to this section.
171          (7) A violation of this section is a class B misdemeanor and is also subject to civil
172     penalties under Section 13-32a-110.
173          (8) The division shall establish standards and criteria for fingerprint legibility by rule
174     made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
175          (9) (a) As used in this Subsection (9), "jewelry" means:
176          (i) any jewelry purchased by the pawn or secondhand business, including scrap jewelry
177     and watches; or
178          (ii) any jewelry pawned to a pawnbroker and the contract period between the
179     pawnbroker and the pledgor has expired, including scrap jewelry and watches.
180          (b) On and after January 1, 2020, a pawn or secondhand business shall obtain:
181          (i) a color digital photograph clearly and accurately depicting:
182          (A) each item of jewelry; and

183          (B) if an item of jewelry has one or more engravings, an additional color digital
184     photograph specifically depicting any engraving; and
185          (ii) a color digital photograph of an item that bears an identifying mark, including:
186          (A) a serial number, engraving, owner label, or similar identifying mark; and
187          (B) an additional photograph that clearly depicts the identifying mark described in
188     Subsection (9)(b)(ii)(A).