Chapter 206
2005 -- H 5464
SUBSTITUTE B
Enacted 07/08/05
A N A C T
RELATING
TO FINANCIAL INSTITUTIONS
Introduced
By: Representatives Schadone, and Landroche
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.
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LC00125/SUB
B/2
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