TITLE 19
Financial institutions

CHAPTER 19-10.1
Conversion of Financial Institution to General Business Corporation

SECTION 19-10.1-1


§ 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 § 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 1.2 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 § 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 § 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 § 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 1.2 of Title 7.

History of Section.
(P.L. 2005, ch. 206, § 1; P.L. 2005, ch. 335, § 1; P.L. 2006, ch. 216, § 3.)