A N A C T
RELATING TO FINANCIAL INSTITUTIONS -- CREATION AND EXPANSION
It is enacted by the General Assembly as follows:
SECTION 1. Chapter 19-2 of the General Laws entitled "Creation and Expansion" is hereby amended by adding thereto the following section:
19-2-14.1. Mutual holding companies. -- (a) Any mutual savings bank chartered under the laws of this state may reorganize into the mutual holding company form of organization pursuant to this section. A mutual savings bank may reorganize into a mutual holding company form of organization by organizing a mutual holding company and chartering one (1) or more interim stock financial institutions or corporate subsidiaries and merging with such banks or subsidiaries, or in any other manner approved by the director. The method of organizing the mutual holding company shall be set forth in a plan of mutual holding company reorganization. The corporate existence of a mutual savings bank coverting to a stock financial institution as part of the reorganizing into the mutual holding company structure shall not terminate, but the stock financial institution hereinafter referred to as the continuing stock financial institution, shall be deemed to be a continuation of the reorganizing mutual savings bank. The mutual holding company must at all times own, directly or indirectly through one (1) or more intermediate stock holding companies, a majority of the voting shares of capital stock of the continuing stock financial institution. A mutual holding company organized under this section also may include an intermediate stock holding company so long as the mutual holding company owns a majority of the voting shares of capital stock of the intermediate stock holding company.
(b) The plan of mutual holding company reorganization must be approved by a two-thirds (2/3) vote of the board of trustees and by the director or the director's designee. In connection with its approval of the plan of mutual holding company reorganization, the director or the director's designee shall approve the proposed agreement to form and the proposed bylaws of the mutual holding company. The approval of the plan of mutual holding company reorganization by a majority vote of the depositors of the mutual savings bank present in person or by proxy at a meeting called by the board of trustees is also required. For the purpose of this section, unless otherwise required under applicable provisions of federal banking law, the depositor shall be deemed to be the individual whose tax identification number or social security number is used by the bank for interest reporting purposes to the internal revenue service.
(c) To the extent not inconsistent with this section, the continuing stock financial institution subsidiary of the mutual holding company shall have all the powers and privileges conferred on, and be subject to all the duties and liabilities imposed on, financial institutions.
(d) If shares of common stock are offered for sale by the continuing stock financial institution subsidiary of the mutual holding company, or by an intermediate stock holding company subsidiary of the mutual holding company, to the general public for a price payable in cash, depositors shall be given subscription rights, and the offering shall be conducted, in the manner provided in section 19-2-14, and in any regulations issued by the director, or the director's designee, thereunder.
(e) A mutual holding company and any intermediate stock holding company subsidiary may engage in any activity permitted to bank holding companies and financial holding companies under the Bank Holding Company Act of 1956, 12 U.S.C. sec. 1841 et seq., or to savings and loan and mutual holding companies under the Home Owners' Loan Act, 12 U.S.C. sec. 1467a, or in any other activity authorized by the director or the director's designee. Without limitation, a mutual holding company, and any intermediate stock holding company subsidiary, may, subject to other applicable provisions of title 19 governing mergers and consolidations and, with the approval of the director or the director's designee: merge with or consolidate with another bank, financial services or savings and loan holding company, including a mutual holding company; or acquire or consolidate with another financial institution, whether in mutual or stock form. Any such merger or consolidation may occur concurrently with a mutual holding company reorganization under this section, or subsequent to the initial reorganization, and cash and/or stock may be used as consideration for the merger or consolidation as long as the mutual holding company directly or indirectly owns a majority of the voting shares of capital stock of the intermediate stock holding company or stock financial institution after the merger or consolidation.
(f) A mutual holding company may convert to stock form upon a two-thirds (2/3) vote of the board of trustees and the approval of the plan of conversion by the director or the director's designee. The conversion shall be conducted in accordance with the applicable provisions of section 19-2-14, including the requirement to obtain depositor approval, and any regulations issued thereunder by the director or the director's designee. In the case of the conversion of an existing mutual holding company to stock form, where shares of common stock of an intermediate stock holding company or stock financial institution subsidiary of the mutual holding company have previously been issued to persons other than the mutual holding company, hereinafter referred to as the minority stockholders, the plan of conversion shall provide that such minority stockholders shall receive an ownership interest in the resulting stock holding company equal to their percentage ownership in the intermediate stock holding company or stock financial institution subsidiary of the mutual holding company immediately prior to the conversion, which percentage ownership interest shall be adjusted taking into account the assets held by the mutual holding company, as reflected in the statement of financial condition of the mutual holding company immediately prior to the conversion, with the balance of the shares sold in accordance with section 19-2-14 and any regulations issued thereunder. The adjustment which shall be described in the plan of mutual holding company conversion submitted for approval by the director or the director's designee shall be subject to the approval of the director or the director's designee.
(g) The director or the director's designee may issue rules and regulations implementing this section.
SECTION 2. This act shall take effect upon passage.