3/16/00 3748s

2000 SESSION

00-2689

09/01

SENATE BILL 310

AN ACT relative to New Hampshire state-chartered banks and interstate banking.

COMMITTEE: Banks

AMENDED ANALYSIS

This bill increases the maximum dollar volume of a bank's deposits as a percentage of the dollar volume of total bank deposits in the state from 20 to 30 percent. The bill also allows New Hampshire state-chartered banks to engage in activities authorized pursuant to the federal Gramm-Leach-Bliley Act.

The bill also changes certain requirements for interstate banking.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

3/16/00 3748s

00-2689

09/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand

AN ACT relative to New Hampshire state-chartered banks and interstate banking.

Be it Enacted by the Senate and House of Representatives in General Court convened:

236:1 Limitation on Deposits. Amend RSA 384-B:2, I to read as follows:

I. With the approval of the board, any bank with its principal office within the state of New Hampshire may establish and operate one or more branch offices in any town within the state. The board shall not grant any application for a branch office if the dollar volume of the total deposits, time, savings, and demand of the applicant bank is greater than [20] 30 percent of the dollar volume of the total deposits, time, savings, and demand of all banks, national banks, and federal savings and loan associations in this state as determined by the board on the basis of the most recent annual deposit reports [made by such institutions to their supervisory authorities] of the Federal Deposit Insurance Corporation available at the time of filing the application; nor if the applicant bank is an affiliate of a bank holding company which with all its affiliates then holds a dollar volume of total deposits, time, savings, and demand greater than [20] 30 percent of the dollar volume of total deposits, time, savings, and demand of all banks, national banks, and federal savings and loan associations in this state as determined by the board on the basis of the most recent annual deposit reports [made by such institutions to their supervisory authorities] of the Federal Deposit Insurance Corporation available at the time of filing of the application.

236:2 Limitation on Deposits. Amend RSA 384-B:2, II to read as follows:

II. With the approval of the board, the resulting bank, after a consolidation as herein defined, may operate as a branch office or offices the business of any other bank acquired in such consolidation, at any location in the same town or towns in which such business was formerly carried on, wherever in the state such town or towns may be; provided, however, that the dollar volume of the total deposits, time, savings, and demand of the remaining bank at the time of filing its application for such branch office or offices does not exceed [20] 30 percent of the dollar volume of the total deposits, time, savings, and demand of all banks, national banks, and federal savings and loan associations in this state as determined by the board on the basis of the most recent annual deposit reports [made by such institutions to their supervisory authorities] of the Federal Deposit Insurance Corporation available at the time of filing of the application.

236:3 Limitation on Deposits. Amend RSA 384-B:2-e to read as follows:

384-B:2-e Exceptions. Notwithstanding any provision to the contrary in RSA 384-B:2, I, III, IV and V and RSA 384-B:2-c, II, a bank which is well-capitalized under applicable federal rules and regulations and has a composite CAMEL rating of at least 2 as a result of its most recent examination by either its federal regulatory authority or the bank commissioner, may open a new branch if the bank does not exceed [20] 30 percent of the dollar volume of the total deposits, time and savings, and demand of all banks, national banks, and federal savings banks and loan associations in the state as determined by the board as provided in RSA 384-B:2, I, by giving written notice to the bank commissioner at least 30 days in advance of the opening of the new branch and by paying the fee required by RSA 384-B:2, III.

236:4 Limitation on Deposits. Amend RSA 384-B:3 to read as follows:

384-B:3 Bank Holding Company Affiliates. No bank holding company shall directly or indirectly acquire ownership or control of any voting stock of any bank or national bank, if upon such acquisition (1) the bank holding company would have more than 12 affiliates in this state; or (2) the dollar volume of the total deposits, time, savings, and demand in this state of the bank holding company and all its affiliates would exceed [20] 30 percent of the dollar volume of total deposits, time, savings, and demand in this state of all banks, national banks, and federal savings and loan associations in this state as determined by the board on the basis of the most recent annual deposit reports [made by such institutions to their supervisory authorities] of the Federal Deposit Insurance Corporation and available at the time of acquisition. [If the board determines that it is in the best interests of the state, the 20 percent limitation on the dollar volume of total deposits in (2) may be waived. Under no circumstances shall the dollar volume of total deposits exceed 30 percent.]

236:5 Banks; Insurance Activities. RSA 384:16-b, I is repealed and reenacted to read as follows:

I. Any state-chartered bank or association may directly or indirectly engage in, or otherwise organize, invest in or loan funds to, any corporation or other type of company formed to engage in, any activity that is financial in nature or incidental to such financial activity authorized under the federal Gramm-Leach-Bliley Act to the same extent and in the same manner as permitted for a national bank under the Act and any activity that is complementary to a financial activity that is authorized by federal regulatory authorities under the federal Gramm-Leach-Bliley Act. Any activity that is financial in nature or incidental or complementary thereto which is treated as insurance under the laws or regulations of this state shall be subject to regulation by the insurance commissioner. Any bank or association seeking to engage in any such insurance activity shall give prior written notice to the insurance commissioner and shall comply with all applicable insurance laws and regulations.

236:6 Interstate Acquisitions. Amend RSA 384:58, II to read as follows:

II. [Except as otherwise provided in this paragraph,] An out-of-state bank holding company may directly or indirectly acquire a New Hampshire bank or a national bank having its principal place of business in New Hampshire which has been in existence for at least 5 years. The 5-year aging requirement of this paragraph shall not apply to a New Hampshire bank which was incorporated pursuant to RSA 386-A or RSA 392 prior to September 29, 1995. [For purposes of this section,] An out-of-state bank holding company may also organize, and be the sole incorporator of, a New Hampshire bank which is chartered under applicable New Hampshire law [solely for the purpose of acquiring control of, or acquiring all or substantially all of the assets and liabilities of, an existing New Hampshire bank or an existing national bank having its principal place of business in New Hampshire, provided that such newly chartered bank does not open for business prior to the consummation of the acquisition. Such newly chartered bank shall be deemed to have been in existence for the same period of time as the bank to be acquired]. No acquisition of an existing bank shall be permitted which will result in a violation of the [20 percent] deposit limitation contained in RSA [384-B:3(2), except as otherwise permitted under RSA 384-B:3 and RSA 384-B:8] 384-B. The authority granted by this section shall be available to the out-of-state bank holding company only if a New Hampshire bank holding company may acquire or organize a bank in the state in which the principal place of business of the out-of-state bank holding company is located under the authority of that state's laws substantially to the same extent and in the same manner as the out-of-state bank holding company is permitted to do so in this section.

236:7 Interstate Bank Mergers. Amend RSA 384:59, I to read as follows:

I. Unless otherwise provided in this paragraph, a New Hampshire bank or a national bank having its principal place of business in New Hampshire may merge with any out-of-state bank in accordance with applicable laws and regulations of New Hampshire and any other applicable state and federal authority. If the resulting bank is an out-of-state bank, the New Hampshire bank or national bank having its principal place of business in New Hampshire shall be required to be in existence for at least 5 years in order to be eligible to merge. The 5-year aging requirement of this paragraph shall not apply to a New Hampshire bank which was incorporated pursuant to RSA 386-A or RSA 392 prior to September 29, 1995. No merger shall be permitted which will result in a violation of the [20 percent] deposit limitation contained in RSA [384-B:2, I and II or RSA 384-B:3(2), except as otherwise permitted under RSA 384-B:3 and RSA 384-B:8] 384-B.

236:8 Interstate Establishment or Acquisition of Branches. Amend RSA 384:60 to read as follows:

384:60 Interstate Establishment or Acquisition of Branches by a New Hampshire Bank.

I. A New Hampshire bank may establish a branch in any state or may acquire a branch or branches of an out-of-state bank in any state in accordance with the laws of such state. The New Hampshire bank shall be required to follow all procedures and to obtain all approvals necessary to establish or acquire a branch under applicable New Hampshire law and any applicable rules adopted by the bank commissioner consistent therewith. The New Hampshire bank shall file with the bank commissioner a copy of each application or notice filed with federal or other state regulatory authorities relating to the transaction at the same time such application or notice is filed with such federal or other state regulatory authorities. Upon consummation of the transaction, the New Hampshire bank shall have all the powers under the applicable laws and regulations of the state in which each branch is located, subject to the duties and restrictions thereof. In addition to any regulation by bank regulatory authorities in the state where a branch is located, each branch of the New Hampshire bank located outside of New Hampshire shall be subject to regulation by the bank commissioner as if such branch were located in New Hampshire and shall comply with New Hampshire law in the conduct of its banking business in such other state unless otherwise required or permitted under the laws of such other state.

II. An out-of-state bank may establish one or more new branches in New Hampshire or may acquire one or more branches from a New Hampshire bank or a national bank or federal savings bank having its principal place of business in New Hampshire. The out-of-state bank shall be required to follow all procedures and to obtain all approvals necessary to establish or acquire the branch or branches under RSA 384-B and any applicable rules adopted by the bank commissioner consistent therewith. The authority granted by this section shall be available to the out-of-state bank only if a New Hampshire bank may establish or acquire one or more branches in the state in which the principal place of business of the out-of-state bank is located under the authority of that state's laws substantially to the same extent and in the same manner as the out-of-state bank is permitted to do so in this section. No branch may be established or acquired if it will result in a violation of the deposit limitation contained in RSA 384-B. The out-of-state bank shall file with the bank commissioner a copy of each application or notice filed with federal or other state regulatory authorities relating to the establishment or acquisition of a branch or branches at the same time such application or notice is filed with such federal or other state regulatory authorities. The out-of-state bank shall have all the powers held by a New Hampshire bank with respect to the operation of the branch or branches located in New Hampshire under applicable New Hampshire laws and regulations, subject to the duties and restrictions thereof. The branch or branches located in New Hampshire of an out-of-state bank, other than a national bank or federal savings association, shall be regulated by the bank commissioner as if such branch or branches comprised a New Hampshire bank. Any out-of-state bank having a branch or branches located in New Hampshire shall comply with applicable New Hampshire laws and regulations in the conduct of its banking business in New Hampshire. No branch of an out-of-state bank shall be permitted to engage in any activity not permissible for a New Hampshire bank. Notwithstanding the foregoing, if the out-of-state bank is a national bank or a federal savings association, it shall comply with New Hampshire law to the maximum extent allowed under federal law.

236:9 Waiver of Deposit Limitation. Amend RSA 384-B:8 to read as follows:

384-B:8 Waiver of Deposit Limitation. In any transaction involving the merger, consolidation or acquisition of any bank, banks, or bank holding company, whenever one or more of such banks or bank holding companies is in such condition that the Federal Deposit Insurance Corporation or any other federal agency having supervisory authority over banks or bank holding companies in New Hampshire could take action which would result in a merger, acquisition, consolidation or other similar structural change, and in the absence of such federal action such a change would be prevented by the provisions of RSA 384-B:2 or RSA 384-B:3, the board may waive the [20] 30 percent dollar volume of total deposit limitation in RSA 384-B:2 and RSA 384-B:3. Any such waiver shall be binding upon the board in any proceeding involving the merger, consolidation or acquisition of such bank, banks, or bank holding company.

236:10 Repeal. RSA 384:16-b, II, relative to banks engaging in certain activities, is repealed.

236:11 Effective Date. This act shall take effect 60 days after its passage.

(Approved: June 1, 2000)

(Effective Date: July 31, 2000)

LBAO

00-2689

3/30/00

SB 310 FISCAL NOTE

FISCAL IMPACT:

METHODOLOGY: