HOUSE BILL No. 6669

 

November 29, 2006, Introduced by Rep. Kolb and referred to the Committee on Banking and Financial Services.

 

     A bill to amend 1999 PA 276, entitled

 

"Banking code of 1999,"

 

by amending the heading of chapter 2 and sections 1201, 1202, and

 

2101 (MCL 487.11201, 487.11202, and 487.12101).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1201. As used in this act:

 

     (a) "Administrative expense" means any of the following:

 

     (i) An expense designated as an administrative expense by this

 

act or the court.

 

     (ii) Court costs and expenses of operation and liquidation of a

 

bank.

 


     (iii) Current wages paid to an employee of a bank whose services

 

are retained by the receiver for services rendered after the date

 

the bank is ordered in receivership.

 

     (iv) An unpaid expense of supervision or conservatorship of a

 

bank.

 

     (v) Unpaid fees or assessments owed to the bureau.

 

     (b) "Administrative procedures act of 1969" means the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328.

 

     (c) "Affiliate" means a corporation, business trust, limited

 

liability company, or similar organization to which any of the

 

following apply:

 

     (i) An organization, directly or indirectly, owns or controls

 

either a majority of its voting shares or more than 50% of the

 

number of shares voted for the election of its directors, trustees,

 

or other persons exercising similar functions at the preceding

 

election, or controls in any manner the election of a majority of

 

its directors, trustees, or other persons exercising similar

 

functions.

 

     (ii) Control of the organization is held, directly or

 

indirectly, through either of the following:

 

     (A) Stock ownership or in any other manner, by the

 

shareholders or members of an organization who own or control a

 

majority of the shares of that organization, a majority ownership

 

interest in the organization, more than 50% of the number of shares

 

voted for the election of directors of that organization at the

 

preceding election, or more than 50% of the ownership vote for

 


election of directors of that organization at the preceding

 

election.

 

     (B) By trustees for the benefit of the shareholders or members

 

of that organization.

 

     (iii) A majority of its directors, trustees, or other persons

 

exercising similar functions constitute a majority of the

 

directors, trustees, or other persons exercising similar functions

 

of any 1 organization.

 

     (iv) The organization owns or controls, directly or indirectly,

 

either a majority of the shares of capital stock or other ownership

 

interest of an organization, or more than 50% of the number of

 

shares voted of the total ownership vote for the election of

 

directors of an organization at the preceding election, or controls

 

in any manner the election of a majority of the directors of an

 

organization, or for the benefit of whose shareholders or members

 

all or substantially all the capital stock or ownership interest of

 

an organization is held by trustees.

 

     (d) "Applicant" means a person making an application under

 

this act.

 

     (e) "Articles" means articles of incorporation, all amendments

 

to articles of incorporation, and agreements of consolidation and

 

merger.

 

     (f) "Association" means a federal savings association

 

organized under section 5 of the home owners' loan act,  chapter

 

64, 48 Stat. 132,  12  U.S.C.  USC 1464, or a savings and loan

 

association, building and loan association, or homestead

 

association that is organized under the laws of a state, the

 


District of Columbia, or a territory or protectorate of the United

 

States, and whose deposits are insured by the federal deposit

 

insurance corporation.

 

     (g) "Bank" means a state banking corporation organized or

 

reorganized under this act or organized under any law of this state

 

enacted before the effective date of this act, including a state

 

banking corporation that voluntarily limits its activities.

 

     (h) "Bank holding company" means a company as defined in the

 

bank holding company act that is not a bank or national banking

 

association and that is a bank holding company approved by the

 

board of governors of the federal reserve system under the bank

 

holding company act or that will become an approved bank holding

 

company before or upon the completion of a consolidation provided

 

in section 3706.

 

     (i) "Banking holding company act" means the federal bank

 

holding company act of 1956, chapter 240, 70 Stat. 133.

 

     (j) "Branch" means, except as otherwise provided in this

 

subdivision, a branch bank, branch office, branch agency,

 

additional office, or a branch place of business at which deposits

 

are received, checks paid, or money lent. The acceptance of

 

deposits in furtherance of a school thrift or savings plan by an

 

officer, employee, or agent of a bank at a school shall not be

 

construed as the establishment or operation of a branch. An

 

electronic funds transfer facility that is made available to 2 or

 

more depository institutions under Michigan law that regulates

 

electronic funds transfer facilities is not a branch. A trust

 

office of a bank is not a branch. A loan production office is not a

 


branch. An additional office of a state agency is not a branch. An

 

international banking facility as defined in 12  C.F.R.  CFR

 

204.8(a)(1), as in effect December 31, 1982, is not a branch. The

 

receipt of deposits by a messenger service or the delivery by a

 

messenger service of items representing deposit account withdrawals

 

or of loan proceeds is not the establishment or operation of a

 

branch, whether or not the messenger service is owned or operated

 

by the bank. Branch does not include an agent acting under section

 

4101(1)(d).

 

     (k) "Bureau" means the  financial institutions bureau of the

 

department of consumer and industry services  office of financial

 

and insurance services of the department of labor and economic

 

growth.

 

     (l) "Capital" or "capital stock" means the stated par value of

 

issued and outstanding unimpaired common stock and the stated par

 

value of issued and outstanding unimpaired preferred stock. For

 

purposes of sections 4202, 4301, 4307, and 4308, "capital" and

 

"capital stock" shall also include outstanding capital notes,

 

debentures, and any other instrument of indebtedness issued under

 

section 3801.

 

     (m) "Cease and desist order which has become final" or "order

 

which has become final" means a cease and desist order or an order

 

issued by the commissioner with the consent of the institution or

 

the director or officer or other person concerned, or with respect

 

to which no petition for review of the action of the commissioner

 

has been filed and perfected in a circuit court as specified in

 

section 2310(2), or with respect to which the action of the court

 


in which the petition is filed is not subject to further review by

 

the courts of the state.

 

     (n) "Commissioner" means the commissioner of the  financial

 

institutions bureau  office of financial and insurance services.

 

     (o) "Consolidate", "consolidated", "consolidating", and

 

"consolidation" include, respectively, consolidate or merge,

 

consolidated or merged, consolidating or merging, and consolidation

 

or merger.

 

     (p) "Consolidated bank" means a bank that results from a

 

consolidation between a bank and 1 or more banks, out-of-state

 

banks, national banks, associations, or savings banks.

 

     (q) "Consolidated organization" means an out-of-state bank,

 

national bank, association, or savings bank organized under the

 

laws of another state or the United States that results from a

 

consolidation of 1 or more banks, with 1 or more out-of-state

 

banks, national banks, associations, or savings banks.

 

     (r) "Consolidating organizations" means any combination of

 

banks, out-of-state banks, national banks, associations, or savings

 

banks that have consolidated or are in the process of consolidation

 

as provided in section 3701 or 3702.

 

     (s) "Depository institution" means a bank, out-of-state bank,

 

national bank, foreign bank branch, association, savings bank, or

 

credit union organized under the laws of this state, another state,

 

the District of Columbia, the United States, or a territory or

 

protectorate of the United States.

 

     (t) "Dissolution" means the process by which a solvent bank

 

voluntarily ends its corporate existence by liquidating its assets

 


and winding up its affairs.

 

     (u) "Dividend reinvestment plan" means a plan that is offered

 

solely to existing shareholders of the bank and which allows the

 

shareholders to reinvest dividends received under section 3806 in

 

stock of the bank and that may allow additional cash amounts to be

 

contributed by the shareholders participating in the reinvestment

 

plan.

 

     (v) "Federal agency" means a foreign bank agency established

 

and operating under the international banking act of 1978.

 

     (w) "Federal branch" means a foreign bank branch established

 

and operating under the international banking act of 1978.

 

     (x) "Federal deposit insurance act" means the federal deposit

 

insurance act, chapter 967, 64 Stat. 873.

 

     (y) "Federal home loan bank act" means the federal home loan

 

bank act, chapter 522, 47 Stat. 725.

 

     (z) "Federal reserve act" means the federal reserve act,

 

chapter 6, 38 Stat. 251.

 

     Sec. 1202. As used in this act:

 

     (a) "Financial institution" means an organization licensed,

 

chartered, or regulated by the  financial institutions  bureau

 

under the laws of this state.

 

     (b) "Foreign bank" means an entity organized and recognized as

 

a bank under the laws of a foreign country that lawfully engages in

 

the business of banking and is not directly or indirectly owned or

 

controlled by United States citizens or by a corporation organized

 

under the laws of the United States. Foreign bank includes foreign

 

commercial banks, foreign merchant banks, and other foreign

 


institutions that engage in banking activities usual in connection

 

with the business of banking in the countries in which the foreign

 

institutions are organized.

 

     (c) "Foreign bank agency" means an office or place of business

 

of a foreign bank, established under this act, the international

 

banking act of 1978, or the laws of another state, that does not

 

exercise trust powers and at which deposits of citizens or

 

residents of the United States are not accepted.

 

     (d) "Foreign bank branch" means a place of business of a

 

foreign bank, located in any state, the District of Columbia, or a

 

territory, or protectorate of the United States, that is not a

 

foreign bank agency, bank, or out-of-state bank, at which deposits

 

are received and that is established and operating as a branch of a

 

foreign bank under this act, the international banking act of 1978,

 

or the laws of another state.

 

     (e) "Foreign country" means a country other than the United

 

States and includes a colony, dependency, or possession of a

 

country other than the United States.

 

     (f) "Incorporator" means a signer of the original articles of

 

incorporation.

 

     (g) "Institution" means a bank, state agency, or state foreign

 

bank branch operating or organized or reorganized under this act or

 

operating or organized under any law of this state enacted before

 

August 20, 1969.

 

     (h) "International banking act of 1978" means the

 

international banking act of 1978, Public Law 95-369, 92 Stat. 607.

 

     (i) "Investment security" means a marketable obligation in the

 


form of a bond, note, or debenture, commonly regarded as an

 

investment security and that is salable under ordinary

 

circumstances with reasonable promptness at a fair value.

 

     (j) "Loan and extension of credit" or "loan or extension of

 

credit" includes all direct or indirect advances of funds to a

 

person made on the basis of any obligation of that person to repay

 

the funds or repayable from specific property pledged by or on

 

behalf of the person. To the extent specified by the commissioner,

 

loan and extension of credit or loan or extension of credit

 

includes any liability of a bank to advance funds to or on behalf

 

of a person under a contractual commitment. The term does not

 

include investment securities held by a bank under section 4301.

 

     (k) "Loan production office" means an office of a depository

 

institution or institutions at which activities related to the

 

lending of money are conducted, deposits are not received, and

 

checks are not paid, and which office is not the principal office,

 

a branch, or an agency of an affiliated depository financial

 

institution.

 

     (l) "Member" means a person with ownership interest under the

 

Michigan limited liability company act, 1993 PA 23, MCL 450.4101 to

 

450.5200.

 

     (m) "Messenger service" means a service such as a courier

 

service or an armored car service that picks up from or delivers to

 

customers of 1 or more depository institutions or 1 or more

 

affiliates of a depository institution cash, currency, checks,

 

drafts, securities, or other items relating to transactions between

 

or involving a depository institution or affiliate of a depository

 


institution and those customers, or that transfers cash, currency,

 

checks, drafts, securities, or other items or documents between

 

depository institutions or affiliates of depository institutions.

 

The service may be owned and operated by 1 or more depository

 

institutions or affiliates or by a third party.

 

     (n) "Mobile branch" means a branch, the physical structure of

 

which is moved from time to time.

 

     (o) "National bank" means a national banking association

 

chartered by the federal government under the national bank act.

 

     (p) "National bank act" means the national bank act, chapter

 

106, 13 Stat. 99.

 

     (q) "Out-of-state bank" means a banking corporation organized

 

under the laws of another state, the District of Columbia, or a

 

territory or a protectorate of the United States whose principal

 

office is located in a state other than this state, in the District

 

of Columbia, or in a territory or a protectorate of the United

 

States, and whose deposits are insured by the federal deposit

 

insurance corporation.

 

     (r) "Person" means an individual, partnership, corporation,

 

limited liability company, governmental entity, or any other legal

 

entity.

 

     (s) "Professional investor" means an accredited investor under

 

15  U.S.C.  USC 77b.

 

     (t) "Publication", "publish", or "published" means to appear

 

in a newspaper of general circulation in the community or

 

communities where the principal office or offices of the depository

 

institution or institutions are located.

 


                              CHAPTER 2

 

   FINANCIAL INSTITUTIONS BUREAU  OFFICE OF FINANCIAL AND INSURANCE

 

                               SERVICES

 

     Sec. 2101. (1)  A financial institutions bureau is created

 

within the department of consumer and industry services, and the

 

bureau shall have  The bureau has jurisdiction over and shall

 

administer the laws relating to financial institutions transacting

 

business in this state.

 

     (2) The head of the  financial institutions  bureau is the

 

commissioner.  who shall be  The commissioner is appointed by the

 

governor, with the advice and consent of the senate,  to serve  and

 

serves at the pleasure of the governor.

 

     (3) Before assuming the duties of office, the commissioner

 

shall take and subscribe the constitutional oath of office and file

 

it with the secretary of state.

 

     (4) The commissioner shall approve a seal for the use of the

 

bureau  . A  and file a description and impression of the seal  

 

shall be filed  with the secretary of state.

 

     (5) The commissioner is prohibited for a period of 6 months

 

from the date he or she leaves office from accepting employment

 

with a state chartered depository financial institution regulated

 

by the bureau.

 

     (6) The commissioner shall annually submit a report to the

 

standing committees of the senate and house of representatives

 

concerned with financial institutions that includes the following

 

information:

 

     (a) The name and location of each depository institution

 


branch located in this state and the services offered at that

 

branch and whether that depository institution is a profit or

 

nonprofit institution.

 

     (b) A description of each geographical area in this state in

 

which the commissioner believes that the banking needs of residents

 

are not fully met.

 

     (c) Sources of public and private development money, and

 

recommendations to the legislature, to encourage depository

 

institutions to provide additional branches or services in the

 

geographical areas described in subdivision (b), including, but not

 

limited to, creation of new state grant programs.