HB 1705-1_ Filed 01/31/2001, 13:16
Adopted 1/31/2001


Text Box

Adopted Rejected


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COMMITTEE REPORT


                                                        YES:

11

                                                        NO:
0

MR. SPEAKER:

    Your Committee on       Financial Institutions     , to which was referred       House Bill 1705     , has had the same under consideration and begs leave to report the same back to the House with the recommendation that said bill be amended as follows:

SOURCE: Page 4, line 42; (01)CR170501.4. -->     Page 4, after line 42, begin a new paragraph and insert:
SOURCE: IC 28-1-2-23; (01)CR170501.6. -->     "SECTION 6. IC 28-1-2-23 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 23. (a) A corporation or an individual acting directly, indirectly, or through or in concert with one (1) or more other corporations or individuals may not acquire control of any bank, trust company, stock savings bank, bank holding company, corporate fiduciary, or industrial loan and investment company unless the department has received an application for change in control by which the department is given one hundred twenty (120) days prior written notice of the proposed change in control and within that time the department has issued a notice approving the proposed change in control. The application shall contain the name and address of the corporation, individual, or individuals, who propose to acquire control.
    (b) The period for approval under subsection (a) may be extended:
        (1) in the discretion of the director for an additional thirty (30)

days; and
        (2) not to exceed two (2) additional times for not more than forty-five (45) days each time if:
            (A) the department determines that the corporation, individual, or individuals, who propose to acquire control have not submitted substantial evidence of the qualifications described in subsection (c);
            (B) the department determines that any material information submitted is substantially inaccurate; or
            (C) the department has been unable to complete the investigation of the corporation, individual, or individuals, who propose to acquire control because of any delay caused by or the inadequate cooperation of the corporation, individual, or individuals.
    (c) The department shall issue a notice approving the application only after it has become satisfied that both of the following apply:
        (1) The corporation, individual, or individuals who propose to acquire control are qualified by competence, experience, character, and financial responsibility to control and operate the bank, trust company, stock savings bank, bank holding company, a corporate fiduciary, or industrial loan and investment company in a legal and proper manner.
        (2) The interests of the stockholders, depositors, and creditors of the bank, trust company, stock savings bank, bank holding company, a corporate fiduciary, or industrial loan and investment company and the interests of the public generally will not be jeopardized by the proposed change in control.
    (d) As used in this section, "bank holding company" means any company (as defined in IC 28-2-15-5 before July 1, 1992, and as defined in IC 28-2-16-5 beginning July 1, 1992) that controls one (1) or more state chartered banks.
    (e) As used in this section, "control" means the power directly or indirectly to:
        (1) direct the management or policies of a bank, a trust company, a bank holding company, a corporate fiduciary, or an industrial loan and investment company; or
        (2) vote at least twenty-five percent (25%) of any class of voting securities of a bank, a trust company, a bank holding company, a

corporate fiduciary, or an industrial loan and investment company.
    (f) The president or other chief executive officer of a financial institution shall report to the director of the department any transfer or sale of shares of stock of the financial institution that results in direct or indirect ownership by a stockholder or an affiliated group of stockholders of at least ten percent (10%) of the outstanding stock of the financial institution. The report required by this section must be made not later than ten (10) days after the transfer of the shares of stock on the books of the financial institution.".

SOURCE: Page 5, line 13; (01)CR170501.5. -->     Page 5, between lines 13 and 14, begin a new paragraph and insert:
SOURCE: IC 28-1-20-4; (01)CR170501.7. -->     "SECTION 7. IC 28-1-20-4 , AS AMENDED BY P.L.215-1999, SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 4. (a) Except as provided in subsections (c), (d), (g), and (k) it is unlawful for any person, firm, limited liability company, or corporation (other than a bank or trust company or corporate fiduciary organized or reorganized under IC 28 or statutes in effect at the time of organization or reorganization or under the laws of the United States):
        (1) to use the word "trust" or the word "bank" as a part of the name or title of the person, firm, or corporation; or
        (2) to advertise or represent the person, firm, limited liability company, or corporation to the public:
            (A) as a bank or trust company or a corporate fiduciary; or
            (B) as affording the services or performing the duties which by law only a bank or trust company or a corporate fiduciary is entitled to afford and perform.
    (b) A financial institution organized under the laws of any state or the United States that establishes a branch office under this title is authorized to do business at that branch using a name other than the name of its home office.
    (c) Notwithstanding the prohibitions of this section, an out-of-state financial institution with the word "bank" in its legal name may use the word "bank" if the financial institution is insured by the Federal Deposit Insurance Corporation or its successor.
    (d) Notwithstanding subsection (a), a building and loan association organized under IC 28-4 (before its repeal) may include in its name or title:
        (1) the words "savings bank"; or
        (2) the word "bank" if the name or title also includes either the words "savings bank" or letters "SB".
A building and loan association that includes "savings bank" in its title under this section does not by that action become a savings bank for purposes of IC 28-6.1.
    (e) The name or title of a savings bank governed by IC 28-6.1 must include the words "savings bank" or the letters "SB".
    (f) A savings association may include in its name the words "building and loan association".
    (g) Notwithstanding subsection (a), a bank holding company (as defined in 12 U.S.C. 1841) may use the word "bank" or "banks" as a part of its name. However, this subsection does not permit a bank holding company to advertise or represent itself to the public as affording the services or performing the duties that by law a bank or trust company only is entitled to afford and perform.
    (h) The department is authorized to investigate the business affairs of any person, firm, limited liability company, or corporation that uses "bank" or "trust" in its title or holds itself out as a bank, corporate fiduciary, or trust company for the purpose of determining whether the person, firm, limited liability company, or corporation is violating any of the provisions of this article, and, for that purpose, the department and its agents shall have access to any and all of the books, records, papers, and effects of the person, firm, limited liability company, or corporation. In making its examination, the department may examine any person and the partners, officers, members, or agents of the firm, limited liability company, or corporation under oath, subpoena witnesses, and require the production of the books, records, papers, and effects considered necessary. On application of the department, the circuit or superior court of the county in which the person, firm, limited liability company, or corporation maintains a place of business shall, by proper proceedings, enforce the attendance and testimony of witnesses and the production and examination of books, papers, records, and effects.
    (i) The department is authorized to exercise the powers under IC 28-11-4 against a person, firm, limited liability company, or corporation that improperly holds itself out as a financial institution.
    (j) A person, firm, limited liability company, or corporation who

violates this section is subject to a penalty of two hundred dollars ($200) per day for each and every day during which the violation continues. The penalty imposed shall be recovered in the name of the state on relation of the department and, when recovered, shall be paid into the financial institutions fund established by IC 28-11-2-9.
    (k) The word "bank" may not be included in the name of a corporate fiduciary.".

SOURCE: Page 11, line 1; (01)CR170501.11. -->     Page 11, between lines 1 and 2, begin a new paragraph and insert:
SOURCE: IC 28-5-3-2; (01)CR170501.16. -->     "SECTION 16. IC 28-5-3-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 2. When, in case of any loan made by any industrial loan and investment company organized under the laws of this state, the borrower or any other person furnishing security on behalf of the borrower, shall, as an inducement to such industrial loan and investment company to make the loan, represent to it, in writing, that he or she is eighteen (18) years of age or older or otherwise make any false statement or representation to any such industrial loan and investment company, and such company is deceived, and the loan is made in reliance upon such representation, neither the person so representating, representing nor any one in his or her behalf nor any person otherwise legally liable to pay such loan, shall afterwards be allowed, as against such industrial loan and investment company, to take advantage of the fact that the person making the representation was under eighteen (18) years of age, but each person shall be estopped by such representation.".
SOURCE: Page 23, line 28; (01)CR170501.23. -->     Page 23, line 28, delete "12 U.S.C. 24A" and insert " 12 U.S.C. 24a".
    Page 24, line 20, delete "protect the financial institution from undue".
    Page 24, line 21, delete "risk or to".

    Page 24, line 39, delete "12 U.S.C. 24A(d)" and insert " 12 U.S.C. 24a(d)".
    Renumber all SECTIONS consecutively.
    (Reference is to HB 1705 as introduced.)

and when so amended that said bill do pass.

__________________________________

Representative Bodiker


CR170501/DI 94    2001