Chapter
335
2005 -- S 0547 SUBSTITUTE A
Enacted 07/19/05
A N A C T
RELATING TO FINANCIAL INSTITUTIONS
Introduced By: Senator William A. Walaska
Date
Introduced: February 10, 2005
It is
enacted by the General Assembly as follows:
SECTION
1. Title 19 of the General Laws entitled "Financial Institutions" is
hereby
amended
by adding thereto the following chapter:
CHAPTER
10.1
CONVERSION OF FINANCIAL
INSTITUTION TO GENERAL BUSINESS CORPORATION
19-10.1-1.
Power to convert financial institution with capital stock to a general
business
corporation or other entity. – Any
financial institution with capital stock chartered
under
the laws of this state and that is solvent may, upon notice to the director or
the director's
designee
pursuant to section 19-10.1-2 and subject to the approval of the director or
the director's
designee,
convert to and become a general business corporation organized under the Rhode
Island
Business
Corporation Act, Chapter 1.1 of Title 7, or another financial services entity
chartered
under
the laws of the United States. As a condition of such conversion, such
financial institution
shall
amend its agreement to form a financial institution, and where applicable for
financial
institutions
organized before December 31, 1995, the articles of incorporation or the
agreement of
association
of the financial institution, such amendment to be by a vote of its
stockholders owning
two-thirds
(2/3) of its capital stock. For the purpose of closing out any depository or
other
exclusively
financial institution related business activities authorized pursuant to
section 19-3-1,
the
directors or trustees of the financial institution shall submit to the director
or the director's
designee
for approval either: (a) a plan, satisfactory in form and content to the
director or the
director's
designee, for termination of any remaining depository or other transactions
entered into
under
or pursuant to the powers, rights or activities reserved to financial
institutions under section
19-3-1
and to which such entity remains to be a party; or (b) a certification,
satisfactory in form
and
content to the director or the director's designee, to the effect that all such
depository and
other
banking related transactions have been terminated for at least one (1) year.
The director or
the
director's designee shall, upon timely completion of its review and approval of
the plan or
certification,
issue an approval and consent for the conversion. The conversion shall not
require
the
prior liquidation of the subject entity. The corporate existence of such entity
shall not
terminate
and such entity shall be deemed to be a continuation of the previously existing
financial
institution,
absent any powers of deposit taking or other powers exclusively reserved to
financial
institutions
under section 19-3-1. Upon issuance of the approval by the director or the
director's
designee
for such conversion, the secretary of state shall be so notified and the
agreement to form,
or
for financial institutions organized before December 31, 1995, the articles of
incorporation or
the
agreement of association, of the financial institution shall be amended by
filing an amendment
with
the Secretary of State so as to change the name of the entity to one containing
words other
than
those identified with a financial institution and to otherwise conform its
articles of
incorporation
or agreement of association with the requirements of a business corporation
organized
under the Rhode Island Business Corporation Act, Chapter 1.1 of Title 7.
19-10.1-2.
Notice of conversion. – Whenever a vote is taken pursuant to section
19-10.1-
1 by
a financial institution with capital stock to convert such financial
institution into a
corporation
organized under the Rhode Island Business Corporation Act, it shall be the duty
of
the
board of directors or trustees thereof to cause notice of this fact to be
certified, under the seal
of
the financial institution by its president, cashier, or treasurer, to the
director of the Department
of
Business Regulation or the director's designee. If the director or the
director's designee
approves
of the act of conversion of the financial institution pursuant to section
19-10.1-1, he or
she
shall certify the decision and issue an approval upon the certificate setting
forth the vote of
the
financial institution. The financial institution shall then publish a notice:
(1) setting forth the
vote
and the director's approval; (2) advising that the financial institution will
no longer be
subject
to the jurisdiction of the Rhode Island Department of Business Regulation sixty
(60) days
after
commencement of the publication of such notice and; (3) notifying depositors
and all other
interested
parties having claims relating to the financial institution's former status as
a regulated
banking
entity to present those claims against the financial institution for payment.
Such notice
shall
be published in twelve (12) point bold faced type once each week for four (4)
successive
weeks
in the legal notices section of a newspaper of general circulation in which the
financial
institution
is located.
19-10.1-3.
Delivery of unclaimed funds and property to general treasurer. –
Whenever
any financial institution with capital stock coverts to and becomes a general
business
corporation
pursuant to section 19-10.1-1 while holding upon deposit or for safekeeping any
funds
or other property of any description pursuant to its powers under section
19-3-1, such
property
shall, prior to the conversion to a general business corporation, be delivered
to the
General
Treasurer of this state as unclaimed property.
SECTION 2. This act
shall take effect upon passage.
=======
LC01909/SUB A/4
=======