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Substitute Senate Bill No. 311

PUBLIC ACT NO. 96-191

AN ACT CONCERNING INTERSTATE BANKING AND MOBILE BANK BRANCHES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 36a-145 of the general statutes, as amended by section 12 of public act 95-155, is repealed and the following is substituted in lieu thereof:

(a) As used in this section: (1) "Branch" [includes] MEANS any office [or place of business] AT A FIXED LOCATION of a Connecticut bank, other than the main office, at which deposits are received, checks paid and money lent and which maintains minimum banking hours from nine o'clock a.m. until three o'clock p.m., Monday through Friday. (2) "Limited branch" means any office AT A FIXED LOCATION of a Connecticut bank at which banking business is conducted other than the main office [or] branch OR MOBILE BRANCH. (3) "MOBILE BRANCH" MEANS ANY OFFICE OF A CONNECTICUT BANK AT WHICH BANKING BUSINESS IS CONDUCTED WHICH IS IN FACT MOVED OR TRANSPORTED TO ONE OR MORE PREDETERMINED LOCATIONS IN ACCORDANCE WITH A PREDETERMINED SCHEDULE.

(b) (1) With the approval of the commissioner, any Connecticut bank may establish a branch in this state. (2) The commissioner shall not approve the establishment of a branch under this subsection unless the commissioner considers whether: (A) Establishment of the branch will result in an over-saturation of depository institutions in the town in which the branch is to be located or in the area surrounding the town; (B) establishment of the branch is consistent with safe and sound banking practices in the town or the surrounding area; (C) the Connecticut bank seeking approval of the branch intends to operate the branch on a long-term basis; and (D) the Connecticut bank maintains, and will continue to maintain, a reasonable ratio of loans made in the state to deposits received from residents of the state. In determining whether to approve the establishment of a branch under this subsection, the commissioner shall not consider the existence of any office established under subsection (d) of section 36a-425 by the Connecticut bank, or by a holding company of which the Connecticut bank is a subsidiary, that is situated at or near the location of the branch. (3) The commissioner shall not approve the establishment of any branch under this subsection unless the commissioner makes the findings required under section 36a-34 AS AMENDED.

(c) (1) With the approval of the commissioner, any Connecticut bank may establish in this state a limited branch that provides limited services or is open for limited time periods. The commissioner shall not approve the establishment of a branch under this subdivision unless the commissioner considers such factors and makes such findings under subdivisions (2) and (3) of subsection (b) of this section as the commissioner deems applicable. The commissioner shall approve such establishment if the commissioner determines that: (A) The interest of the neighborhood where the limited branch is to be located will be served to advantage by the establishment of the proposed branch, (B) the proposed products, services and banking hours are appropriate to meet the convenience and needs of the neighborhood, and (C) in the case of an establishment resulting from the conversion of a branch to a limited branch, alternative banking services are available in the neighborhood so that any reduction in services or hours will not result in unmet banking needs. (2) With the approval of the commissioner, any Connecticut bank may establish in this state a limited branch that provides limited services or is open for limited time periods in order to meet a special need of the neighborhood in which such limited branch is to be located. The commissioner shall not approve the establishment of a branch under this subdivision unless the commissioner considers such factors and makes such findings and determinations under subdivision (1) of this subsection as the commissioner deems necessary. (3) A limited branch OR MOBILE BRANCH shall be conspicuously identified as a branch of the Connecticut bank. The commissioner may condition the approval of such branch with any other requirement that the commissioner deems necessary or appropriate for the protection of depositors or the Connecticut bank.

(d) WITH THE APPROVAL OF THE COMMISSIONER FOR EACH PREDETERMINED LOCATION, ANY CONNECTICUT BANK MAY ESTABLISH IN THIS STATE A MOBILE BRANCH THAT PROVIDES FULL OR LIMITED SERVICES OR IS OPEN FOR FULL OR LIMITED TIME PERIODS. THE COMMISSIONER SHALL NOT APPROVE THE ESTABLISHMENT OF A MOBILE BRANCH UNDER THIS SUBSECTION UNLESS THE COMMISSIONER MAKES THE CONSIDERATIONS, FINDINGS AND DETERMINATIONS REQUIRED UNDER SUBDIVISION (1) OF SUBSECTION (c) OF THIS SECTION, PROVIDED THAT IN THE CASE OF A MOBILE BRANCH ESTABLISHED IN ORDER TO MEET A SPECIAL NEED OF THE NEIGHBORHOOD IN WHICH SUCH MOBILE BRANCH IS TO BE LOCATED, THE COMMISSIONER SHALL NOT APPROVE SUCH ESTABLISHMENT UNLESS THE COMMISSIONER MAKES THE CONSIDERATIONS AND DETERMINATIONS REQUIRED UNDER SUBDIVISION (2) OF SUBSECTION (c) OF THIS SECTION.

[(d)] (e) Nothing in this section shall prohibit a Connecticut bank from establishing or operating a branch, [or] limited branch OR MOBILE BRANCH in the same or approximately the same location as another depository institution, or continuing to operate as a branch [or] limited branch OR MOBILE BRANCH in this state in the same or approximately the same location, the business of any other depository institution which has been acquired by the Connecticut bank.

[(e)] (f) (1) A Connecticut bank which proposes to close any branch or limited branch shall submit to the commissioner a notice of the proposed closing not later than the first day of the ninety-day period ending on the date proposed for that closing. The notice shall include a detailed statement of the reasons for the decision to close the branch or limited branch and the statistical and other information in support of such reasons. (2) The Connecticut bank shall provide notice of the proposed closing to its customers by: (A) Posting a notice in a conspicuous manner on the premises of the branch or limited branch proposed to be closed during a period not less than the thirty-day period ending on the date proposed for that closing, and (B) Including a notice in at least one of any regular account statements mailed to customers of the branch or limited branch proposed to be closed or in a separate mailing, by not later than the beginning of the ninety-day period ending on the date proposed for that closing. (3) A CONNECTICUT BANK WHICH PROPOSES TO CLOSE ANY MOBILE BRANCH SHALL COMPLY WITH SUCH NOTICE AND OTHER REQUIREMENTS AS THE COMMISSIONER MAY PRESCRIBE.

[(f)] (g) With the approval of the commissioner, any Connecticut bank may relocate within this state any branch or limited branch in accordance with such notice and other requirements as the commissioner may prescribe. As used in this subsection, "relocate" means to move within the same immediate neighborhood without substantially affecting the nature of the business or customers served.

[(g)] (h) With the approval of the commissioner, a Connecticut bank may sell a branch [or] limited branch OR MOBILE BRANCH to any bank, Connecticut credit union or federal credit union. The selling Connecticut bank must have been in existence and continuously operating for at least five years unless the commissioner waives this requirement. The commissioner shall not approve such sale if such acquiring bank or credit union, including all insured depository institutions which are affiliates of the bank or credit union, upon consummation of the sale, would control thirty per cent or more of the total amount of deposits of insured depository institutions in this state, unless the commissioner permits a greater percentage of such deposits.

[(h)] (i) With the approval of the commissioner, a Connecticut bank may establish a branch [or] limited branch OR MOBILE BRANCH outside of this state in accordance with applicable law. The commissioner shall not grant such approval, unless: (1) The commissioner finds, in accordance with regulations adopted pursuant to chapter 54, that the Connecticut bank has a record of compliance with the requirements of the Community Reinvestment Act of 1977, 12 USC 2901 et seq., as from time to time amended, sections 36a-30 to 36a-33, inclusive, AS AMENDED to the extent applicable, and applicable consumer protection laws; (2) the Connecticut bank is adequately capitalized and the commissioner determines that it will continue to be adequately capitalized; and (3) the Connecticut bank is adequately managed and the commissioner determines that it will continue to be adequately managed. The commissioner may examine and supervise the out-of-state branches of any such Connecticut bank and may enter into agreements with other state or federal banking regulators or similar regulators in a foreign country concerning such examinations or supervision.

[(i) (1) No out-of-state bank, unless authorized under the provisions of this title, shall maintain any office within the state to solicit deposits or otherwise engage in banking activities. (2) Subdivision (1) of this subsection shall not prohibit a foreign bank from establishing or maintaining a federal branch or state branch provided such foreign bank elects this state as its home state under the International Banking Act of 1978, 12 USC Section 3101 et seq., as from time to time amended, or a federal agency, state agency or representative office.]

Sec. 2. Section 36a-411 of the general statutes, as amended by section 26 of public act 95-155, is repealed and the following is substituted in lieu thereof:

Any out-of-state holding company may, with the approval of the commissioner, [establish or] acquire and retain direct or indirect ownership or control of ten per cent or more of the voting stock of any bank, provided such bank has been in existence and continuously operating for at least five years, unless the commissioner waives this requirement, or Connecticut holding company, provided the subsidiary banks of such holding company have been in existence and continuously operating for at least five years, unless the commissioner waives this requirement [,] OR ESTABLISH A BANK. THE COMMISSIONER MAY APPROVE SUCH ACQUISITION OR ESTABLISHMENT ONLY if the laws of the home state of such out-of-state holding company authorize, under conditions no more restrictive than those imposed by the laws of this state, as determined by the commissioner, a Connecticut holding company to establish or acquire and retain direct or indirect ownership or control of ten per cent or more of the voting stock of out-of-state banks or out-of-state holding companies whose home state is such state. The acquisition or establishment shall not take place if such out-of-state holding company, including all insured depository institutions which are affiliates of the out-of-state holding company, upon consummation of the acquisition or establishment, would control thirty per cent or more of the total amount of deposits of insured depository institutions in this state, unless the commissioner permits a greater percentage of such deposits. Before approving any such establishment or acquisition, the commissioner shall consider whether such establishment or acquisition can reasonably be expected to produce benefits to the public and whether such benefits clearly outweigh possible adverse effects, including, but not limited to, an undue concentration of resources and decreased or unfair competition. The commissioner shall not approve such acquisition or establishment unless the commissioner considers whether: (1) The investment and lending policies of the bank to be acquired, or the proposed investment and lending policies of the bank to be established, are consistent with safe and sound banking practices and will benefit the economy of this state; (2) the services or proposed services of the bank to be acquired or established are consistent with safe and sound banking practices and will benefit the economy of this state; (3) the acquisition or establishment will not substantially lessen competition in the banking industry of this state; and (4) in the case of such establishment or an acquisition and retention of ownership or control of twenty-five per cent or more of such voting stock, the out-of-state holding company (A) has sufficient capital to ensure, and agrees to ensure, that the bank to be acquired or established will comply with applicable minimum capital requirements, and (B) has sufficient managerial resources to operate the bank to be acquired or established in a safe and sound manner. The commissioner shall not approve such acquisition or establishment unless the commissioner makes the findings required by section 36a-34 AS AMENDED. Any such establishment or acquisition by an out-of-state holding company shall be effected in accordance with the laws of this state applicable to such activities when conducted by Connecticut holding companies.

Sec. 3. Section 36a-412 of the general statutes, as amended by section 27 of public act 95-155, is repealed and the following is substituted in lieu thereof:

(a)(1) Any out-of-state bank, whether or not owned or controlled by an out-of-state holding company, may, with the approval of the commissioner, merge or consolidate with or acquire a branch or significant part of the assets or ten per cent or more of the stock of a bank provided such bank has been in existence and continuously operating for at least five years, unless the commissioner waives this requirement, where the institution resulting from any such merger or consolidation is an out-of-state bank, provided the laws of the home state of such out-of-state bank authorize, under conditions no more restrictive than those imposed by the laws of this state as determined by the commissioner, a bank to merge or consolidate with or purchase a branch or significant part of the assets or ten per cent or more of the stock of an out-of-state bank whose home state is such state. Such merger, consolidation or acquisition shall not take place if the out-of-state bank, including all insured depository institutions which are affiliates of the out-of-state bank, upon consummation of the merger, consolidation or acquisition, would control thirty per cent or more of the total amount of deposits of insured depository institutions in this state, unless the commissioner permits a greater percentage of such deposits. Any such merger, consolidation or acquisition of assets or stock shall be effected in accordance with and subject to the filing requirements and any limitations imposed by the laws of this state with respect to mergers, consolidations and acquisitions between banks. Any such out-of-state bank that engages in business in this state shall comply with the requirements of section 33-396 or 33-505. Before approving any such merger, consolidation or acquisition, the commissioner shall make such considerations, determinations and findings as required by the laws of this state with respect to mergers, consolidations and acquisitions between banks and, in addition, shall consider whether such merger, consolidation or acquisition can reasonably be expected to produce benefits to the public and whether such benefits clearly outweigh possible adverse effects, including, but not limited to, an undue concentration of resources and decreased or unfair competition. The commissioner shall not approve such merger, consolidation or acquisition unless the commissioner considers whether: (A) The investment and lending policies of the out-of-state bank, in the case of a merger or acquisition of assets, or the proposed investment and lending policies of the bank, in the case of an acquisition of stock, or of the institution that will result from a consolidation, are consistent with safe and sound banking practices and will benefit the economy of this state; (B) the services of the bank or branch to be acquired, or of the institution that will result from a merger, or the proposed services of the institution that will result from a consolidation, are consistent with safe and sound banking practices and will benefit the economy of this state; (C) the merger, consolidation or acquisition will not substantially lessen competition in the banking industry of this state; (D) in the case of a merger or consolidation or the acquisition of twenty-five per cent or more of such stock, the out-of-state bank (i) has sufficient capital to ensure, and agrees to ensure, that the bank to be acquired or the institution that will result from the merger or consolidation will comply with applicable minimum capital requirements, and (ii) has sufficient managerial resources to operate the bank to be acquired or the institution that will result from the merger or consolidation in a safe and sound manner; and (E) the out-of-state bank is in compliance with applicable minimum capital requirements. The commissioner shall not approve such merger, consolidation or acquisition unless the commissioner makes the findings required by section 36a-34 AS AMENDED. ANY OUT-OF-STATE BANK THAT MERGES OR CONSOLIDATES WITH OR ACQUIRES A BRANCH PURSUANT TO THIS SUBDIVISION MAY ESTABLISH ADDITIONAL BRANCHES IN THIS STATE IN ACCORDANCE WITH SECTION 36a-145, AS AMENDED BY SECTION 1 OF THIS ACT. (2) Any out-of-state bank, other than a foreign bank, may, with the approval of the commissioner, and in accordance with the provisions of this subdivision, establish a de novo branch in this state, provided the laws of the home state of such out-of-state bank authorize, under conditions no more restrictive than those imposed by the laws of this state, as determined by the commissioner, a bank to establish a de novo branch in the home state of such out-of-state bank. Any such establishment shall be effected in accordance with and subject to the filing requirements and any limitations imposed by section 36a-145 AS AMENDED BY SECTION 1 OF THIS ACT. Any such out-of-state bank that engages in business in this state shall comply with the requirements of section 33-505 or 33-396. Before approving any such establishment, the commissioner shall make such considerations, determinations and findings as required by section 36a-145 AS AMENDED BY SECTION 1 OF THIS ACT and, in addition, shall consider whether such establishment can reasonably be expected to produce benefits to the public and whether such benefits clearly outweigh possible adverse effects, including, but not limited to, an undue concentration of resources and decreased or unfair competition. The commissioner shall not approve such establishment unless the commissioner considers whether: (A) The investment and lending policies of the out-of-state bank are consistent with safe and sound banking practices and will benefit the economy of this state; (B) the proposed services of the branch are consistent with safe and sound banking practices and will benefit the economy of this state; (C) the establishment will not substantially lessen competition in this state; (D) the out-of-state bank is adequately managed and will continue to be adequately managed upon establishment of such branch; and (E) the out-of-state bank is in compliance with applicable minimum capital requirements. The commissioner shall not approve such establishment unless the commissioner makes the findings required by section 36a-34 AS AMENDED. An out-of-state bank which has established a de novo branch in this state in accordance with this subdivision may establish additional branches in this state in accordance with section 36a-145 AS AMENDED BY SECTION 1 OF THIS ACT. (3) (A) AS USED IN THIS SUBDIVISION, "APPLICANT" MEANS, IN THE CASE OF AN ACQUISITION OF A BRANCH, THE ACQUIRING OUT-OF-STATE BANK, AND IN THE CASE OF A MERGER OR CONSOLIDATION, EACH OUT-OF-STATE BANK THAT IS A PARTY TO THE MERGER OR CONSOLIDATION. (B) ANY OUT-OF-STATE BANK, REGARDLESS OF WHETHER IT HAS A BRANCH IN THIS STATE, MAY MERGE OR CONSOLIDATE WITH OR ACQUIRE A BRANCH IN THIS STATE OF AN OUT-OF-STATE BANK THAT HAS A BRANCH IN THIS STATE. ON OR BEFORE JUNE 1, 1997, NO SUCH MERGER, CONSOLIDATION OR ACQUISITION SHALL TAKE PLACE WITHOUT THE APPROVAL OF THE COMMISSIONER. THE COMMISSIONER SHALL NOT APPROVE SUCH MERGER, CONSOLIDATION OR ACQUISITION UNLESS THE COMMISSIONER CONSIDERS WHETHER: (i) SUCH MERGER, CONSOLIDATION OR ACQUISITION CAN REASONABLY BE EXPECTED TO PRODUCE BENEFITS TO THE PUBLIC AND WHETHER SUCH BENEFITS CLEARLY OUTWEIGH POSSIBLE ADVERSE EFFECTS INCLUDING, BUT NOT LIMITED TO, AN UNDUE CONCENTRATION OF RESOURCES, DECREASED OR UNFAIR COMPETITION, BRANCH CLOSINGS AND LOSS OF JOBS IN THIS STATE; (ii) THE PROPOSED INVESTMENT AND LENDING POLICIES AND SERVICES OF THE APPLICANT, IN THE CASE OF AN ACQUISITION OF A BRANCH, OR THE RESULTING OUT-OF-STATE BANK, IN THE CASE OF A MERGER OR CONSOLIDATION, WILL BENEFIT THE ECONOMY OF THIS STATE; AND (iii) THE APPLICANT HAS A RECORD OF COMPLIANCE WITH THE REQUIREMENTS OF THE COMMUNITY REINVESTMENT ACT OF 1977, 12 USC 2901, ET SEQ., AS FROM TIME TO TIME AMENDED, SECTIONS 36a-30 TO 36a-33, INCLUSIVE, AS AMENDED, TO THE EXTENT APPLICABLE, AND APPLICABLE CONSUMER PROTECTION LAWS. THE COMMISSIONER SHALL NOT APPROVE SUCH MERGER, CONSOLIDATION OR ACQUISITION UNLESS THE COMMISSIONER FINDS THAT THE APPLICANT, IN THE CASE OF AN ACQUISITION OF A BRANCH, OR THE RESULTING OUT-OF-STATE BANK, IN THE CASE OF A MERGER OR CONSOLIDATION, WILL PROVIDE ADEQUATE SERVICES TO MEET THE BANKING NEEDS OF ALL COMMUNITY RESIDENTS, INCLUDING LOW-INCOME RESIDENTS AND MODERATE-INCOME RESIDENTS, TO THE EXTENT PERMITTED BY ITS CHARTER, IN ACCORDANCE WITH A PLAN SUBMITTED BY THE APPLICANT TO THE COMMISSIONER IN SUCH FORM AND CONTAINING SUCH INFORMATION AS THE COMMISSIONER REQUIRES. UPON RECEIVING THE PLAN, THE COMMISSIONER SHALL MAKE THE PLAN AVAILABLE FOR PUBLIC INSPECTION AND COMMENT AT THE DEPARTMENT OF BANKING AND SHALL CAUSE NOTICE OF ITS SUBMISSION AND AVAILABILITY FOR INSPECTION AND COMMENT TO BE PUBLISHED IN THE DEPARTMENT'S WEEKLY BULLETIN. WITH THE CONCURRENCE OF THE COMMISSIONER, THE APPLICANT SHALL PUBLISH, IN THE FORM OF A LEGAL ADVERTISEMENT IN A NEWSPAPER HAVING A SUBSTANTIAL CIRCULATION IN THE AREA, NOTICE OF SUCH PLAN'S SUBMISSION AND AVAILABILITY FOR PUBLIC INSPECTION AND COMMENT. THE NOTICE SHALL STATE THAT THE INSPECTION AND COMMENT PERIOD WILL LAST FOR A PERIOD OF THIRTY BUSINESS DAYS FROM THE DATE OF PUBLICATION. THE COMMISSIONER SHALL NOT MAKE SUCH FINDING UNTIL THE EXPIRATION OF SUCH THIRTY-DAY PERIOD. IN MAKING SUCH FINDING, THE COMMISSIONER SHALL, UNLESS CLEARLY INAPPLICABLE, CONSIDER, AMONG OTHER FACTORS, WHETHER THE PLAN IDENTIFIES SPECIFIC UNMET CREDIT AND CONSUMER BANKING NEEDS IN THE LOCAL COMMUNITY AND SPECIFIES HOW SUCH NEEDS WILL BE SATISFIED, PROVIDES FOR SUFFICIENT DISTRIBUTION OF BANKING SERVICES AMONG BRANCHES OR SATELLITE DEVICES, OR BOTH, LOCATED IN LOW-INCOME NEIGHBORHOODS, CONTAINS ADEQUATE ASSURANCES THAT BANKING SERVICES WILL BE OFFERED ON A NONDISCRIMINATORY BASIS AND DEMONSTRATES A COMMITMENT TO EXTEND CREDIT FOR HOUSING, SMALL BUSINESS AND CONSUMER PURPOSES IN LOW-INCOME NEIGHBORHOODS. ANY SUCH MERGER, CONSOLIDATION OR ACQUISITION WHICH RECEIVED ALL REQUIRED FEDERAL BANK REGULATORY APPROVALS ON OR BEFORE FEBRUARY 7, 1996, SHALL NOT BE SUBJECT TO THE APPROVAL AND FILING REQUIREMENTS OF THIS SUBDIVISION. [(3)] (4) (A) Except as provided in this section, any branch in this state of an out-of-state bank, other than a federally-chartered out-of-state bank, may exercise all the powers possessed by a Connecticut bank and the laws of this state shall apply to such branch to the same extent as such laws apply to a branch of a Connecticut bank, and such out-of-state bank may not conduct any activity at such branch that is not permissible for a Connecticut bank. The following laws shall not apply to such branch: Sections 36a-65, AS AMENDED 36a-98, 36a-261, AS AMENDED 36a-262, 36a-285 unless, at the time of the acquisition, the acquired bank exercised the authority granted by such section, 36a-738 and 36a-739. (B) The laws of this state shall apply to any branch in this state of a federally-chartered out-of-state bank to the same extent as such laws would apply if the branch were a federal bank. The following laws shall apply to any branch in this state of a federally-chartered out-of-state bank to the same extent as such laws apply to a branch of a Connecticut bank: (i) Community reinvestment laws including sections 36a-30 to 36a-33, inclusive, AS AMENDED (ii) consumer protection laws including sections 36a-290 to 36a-304, inclusive, AS AMENDED 36a-306, 36a-307, 36a-315 to 36a-323, inclusive, 36a-645 to 36a-647, inclusive, 36a-690, 36a-695 to 36a-700, inclusive, AS AMENDED 36a-705 to 36a-707, inclusive, 36a-715 to 36a-718, inclusive, 36a-725, 36a-726, 36a-755 to 36a-759, inclusive, 36a-770 to 36a-788, inclusive, and 36a-800 to 36a-810, inclusive, (iii) fair lending laws including sections 36a-16, AS AMENDED 36a-737, AS AMENDED 36a-740 and 36a-741, and (iv) branching laws including sections 36a-23 and 36a-145 AS AMENDED BY SECTION 1 OF THIS ACT. [(4)] (5) Any out-of-state bank that merges or consolidates with or acquires the assets of a bank or establishes in this state a de novo branch shall be subject to the supervision and examination of the commissioner pursuant to regulations adopted by the commissioner in accordance with chapter 54 and shall make reports to the commissioner as required by the laws of this state. The commissioner may examine and supervise the Connecticut branches of any such out-of-state bank and may enter into agreements with other state or federal banking regulators or similar regulators in a foreign country concerning such examinations or supervision. The provisions of this section apply to the acquisition of the assets of any bank from the receiver of such bank by any out-of-state bank.

(b) A bank may merge or consolidate with an out-of-state bank where the resulting institution is a bank, or acquire a branch or a significant part of the assets or ten per cent or more of the stock of an out-of-state bank, in accordance with applicable law. Any such merger, consolidation or acquisition of assets or stock shall be effected in accordance with and subject to the limitations imposed by the laws of this state with respect to mergers, consolidations and acquisitions between banks. Any such bank may continue to operate as a branch the business of such bank with which it has merged or consolidated or the assets of which it has acquired to the extent of the powers otherwise possessed by such bank. The commissioner may examine and supervise the out-of-state branches of any such Connecticut bank, and may enter into agreements with other state or federal banking regulators or similar regulators in a foreign country concerning such examinations or supervision.

(c) Any acquisition by a Connecticut bank of ten per cent or more of the stock of another bank or an out-of-state bank pursuant to the authority of subsection (b) of this section is not subject to any provisions of this title limiting the ownership of stock in such institutions.

Sec. 4. Section 36a-425 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Except as otherwise provided in this title, no foreign banking corporation shall transact in this state the business authorized by its certificate of incorporation or by the laws of the state under which it was organized, unless empowered to do so by any provision of the general statutes or any special act of this state; provided, without excluding other activities which may not constitute transacting business in this state, no such foreign banking corporation shall be deemed to be doing or transacting business in this state for purposes of this section by reason of its acting as an investment adviser to the State Treasurer or by reason of its making loans whether secured or unsecured. For purposes of this section, "foreign banking corporation" means a banking corporation which is organized under the laws of or has its principal office in any state other than Connecticut or any foreign country. Notwithstanding the provisions of this subsection, a foreign banking corporation which transacts business in this state for the purposes of section 33-396 or 33-505 shall comply with the requirements of such sections.

(b) Except as otherwise provided in this title, no foreign banking corporation, holding company, subsidiary of a holding company, or subsidiary or affiliate of a banking corporation may establish [and] OR maintain an office in this state if such office will be used to enable such corporation, holding company or subsidiary or affiliate to engage in banking business in Connecticut. If the commissioner determines that an office is being used to enable the corporation, holding company or subsidiary or affiliate to engage in banking business in Connecticut, the commissioner shall order that such office be closed or take action against such entities in accordance with section 36a-50. The establishment [and] OR maintenance of an office in this state which will not enable a foreign banking corporation, holding company, subsidiary of a holding company, or subsidiary or affiliate of a banking corporation to engage in banking business in Connecticut does not violate the provisions of subsection (a) of this section. For the purpose of this subsection, the term "banking business" shall include, but shall not be limited to, receiving deposits, paying checks, lending money and any activity which is determined by the commissioner to be so closely related to banking as to be a proper incident thereto.

(c) The provisions of subsection (b) of this section shall not apply to: (1) An office of a bank; (2) an office ESTABLISHED OR maintained for the purpose of managing or controlling a bank; (3) an office of a subsidiary of a bank, which subsidiary is limited to carrying on one or more of the functions which such bank may carry on directly in the exercise of its express or implied powers; (4) an office of a holding company or subsidiary of a holding company or banking corporation which required and which had received all requisite state and federal authorization and was open for business prior to June 1, 1984, provided such office may not engage in any activities other than those for which it had authorization and in which it was actually engaged on June 1, 1984; (5) an office established OR MAINTAINED pursuant to subsection (d) of this section; [or] (6) AN OFFICE OF A FOREIGN BANK THAT IS A FEDERAL BRANCH, PROVIDED SUCH FOREIGN BANK ELECTS THIS STATE AS ITS HOME STATE UNDER THE INTERNATIONAL BANKING ACT OF 1978, 12 USC SECTION 3101 ET SEQ., AS FROM TIME TO TIME AMENDED, OR AN OFFICE OF A FOREIGN BANK THAT IS A FEDERAL AGENCY; OR (7) an office of a subsidiary of a foreign bank that has elected this state as its home state under the International Banking Act of 1978, 12 USC 3101 et seq., as from time to time amended, and has a federal branch or a state branch in this state, which subsidiary is limited to carrying on one or more of the functions which such branch of such foreign bank may carry on directly.

(d) Any holding company may establish [and] OR maintain, either directly or through any subsidiary of such holding company that is not a banking corporation, and any banking corporation that is not a subsidiary of a holding company may establish [and] OR maintain, through any of its subsidiaries that are not banking corporations, one or more offices for the purpose of engaging in banking business other than to provide deposit services in this state subject to the approval of the commissioner. No office established OR MAINTAINED under this subsection may be converted into an office that engages in banking business which includes providing deposit services. For purposes of this subsection, "deposit services" includes but is not limited to, deposits, withdrawals, advances, payments and transfers of funds to or from a deposit account. Any applicant for permission to establish an office pursuant to this subsection shall pay to the commissioner a fee, in an amount fixed by the commissioner, to defray the costs of processing such applications.

(e) (1) Any person who ESTABLISHES OR maintains an office or transacts business in this state in violation of this section shall be subject to the penalties imposed by subsections (c) and (e) of section 33-412. (2) The provisions of subsections (a) and (d) of section 33-412 shall not be applicable to any foreign banking corporation by reason of its maintenance of an office or its transaction of business in this state in violation of this section before May 31, 1991, provided nothing in this subdivision shall be construed to affect any action pending on May 31, 1991.

(f) Any person may bring an action in any court of competent jurisdiction to enjoin any person from violating the provisions of this section.

Sec. 5. Subsection (b) of section 36a-428c of the general statutes is repealed and the following is substituted in lieu thereof:

(b) Such foreign bank shall hold in this state currency, or such assets as the commissioner shall by regulation permit, in an amount which shall bear such relationship as the commissioner shall by regulation prescribe to liabilities of such foreign bank. As used in this subsection, "liabilities" means liabilities appearing in the books, accounts or records of a foreign bank's state agencies [or] AND state branches in this state as liabilities of such agencies [or] AND branches, including acceptances and such other liabilities as the commissioner shall determine but excluding amounts due and other liabilities to other offices, agencies or branches of, and affiliates of such foreign bank. For purposes of this subsection, the commissioner (1) shall value marketable securities at principal amount or market value, whichever is lower, (2) may determine the value of any non-marketable bond, note, debenture, draft, bill of exchange, other evidence of indebtedness, or of any other asset or obligation held by or owed to the foreign bank or its agency, agencies, branch or branches within this state, and (3) in determining the ratio of assets to liabilities, may exclude in whole or in part any particular asset. If, by reason of the existence or potential occurrence of unusual and extraordinary circumstances, the commissioner deems it necessary or desirable for the maintenance of a sound financial condition, the protection of depositors, creditors and the public interest, and to maintain public confidence in the business of any state agency or state branch of a foreign bank in this state, the commissioner may, subject to such terms and conditions as the commissioner may prescribe, require such foreign bank to deposit the assets required to be held in this state pursuant to this subsection with such banks as the commissioner may designate.

Sec. 6. This act shall take effect from its passage.

Approved June 3, 1996. Effective June 3, 1996.

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