The Council of the District of Columbia hereby finds and declares that:
(1) On September 29, 1994, the federal Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 ("federal legislation") became law.
(2) Sections 102 and 103 of the federal legislation permit states to enact early opt in legislation to enable a state to appropriately regulate interstate banking, branching, and bank mergers and acquisitions prior to June 1997 when all provisions of the federal legislation will become fully effective.
(3) It is the intent of the District of Columbia to exercise its statutory option under the federal legislation by opting in to its interstate branching schemata thus permitting the District's Office of Banking and Financial Institutions to regulate, pursuant to the federal legislation, interstate branching, acquisition of branches, bank mergers, and consolidations of existing banking entities within the District of Columbia among other things.
(June 13, 1996, D.C. Law 11-142, § 2, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-851.
Legislative History of Laws
Law 11-142, the "Banking and Branching Act of 1996," was introduced in Council and assigned Bill No. 11-321, which was referred to the Committee on Economic Development. The Bill was adopted on first and second readings on March 5, 1996, and April 2, 1996, respectively. Signed by the Mayor on April 16, 1996, it was assigned Act No. 11-258 and transmitted to both Houses of Congress for its review. D. C. Law 11-142 became effective on June 13, 1996.
For the purposes of this subchapter, the term:
(1) "Acquire" means:
(A) To merge or consolidate;
(B) To have direct or indirect ownership or control of voting shares, if, after the acquisition, the acquiror directly or indirectly owns or controls more than 5% of any class of voting shares of the acquired; or
(C) Any action that would result in direct or indirect control of the acquired, including a direct or indirect ownership of all or of substantially all of the assets of the acquired.
(2) "Acquisition of a branch" means the acquisition of a branch located in a host state without acquiring the bank of such branch.
(3) "Bank" means any insured bank as defined in 12 U.S.C. § 1813(h), or any institution eligible to become an insured bank as defined therein, which accepts demand deposits and makes commercial loans.
(4) "Branch" means any branch bank or branch bank office or other bank facility where deposits are received, checks are paid, or money is lent.
(5) "De novo branch" means a branch of a bank located in a host state which:
(A) Is originally established by a bank as a branch; and
(B) Does not become a branch of a bank as the result of the acquisition of another bank or the acquisition of a branch of another bank.
(6) "Depository institution affiliate" means any depository institution that controls, is controlled by, or is under common control of or with another depository institution.
(7) "District" means the District of Columbia.
(8) "District bank" means a bank whose home state is the District of Columbia and whose primary regulator is the District's Superintendent of Banking and Financial Institutions or the Comptroller of the Currency.
(9) "District state bank" means a bank whose home state is the District and that is chartered under the laws of the District.
(10) "Home state" means:
(A) The state of the main office for a national bank; or
(B) The state of chartering for a state bank.
(11) "Host state" means a state, other than the home state of a bank, in which a bank maintains or seeks to maintain a branch.
(12) "Interstate merger transaction" means:
(A) The merger or consolidation of banks with different home states pursuant to the authority of this subchapter, and the conversion of branches of any bank involved in such a merger or consolidation to branches of the resulting bank; or
(B) The purchase of all, or substantially all, of the assets of a bank whose home state is not the home state of the acquiring bank pursuant to the authority of this subchapter.
(13) "Out-of-state bank" means a bank whose home state is not the District.
(14) "Out-of-state national bank" means a nationally-chartered bank whose home state is not the District of Columbia.
(15) "Out-of-state state bank" means a state chartered bank whose home state is not the District of Columbia.
(16) "Resulting bank" means a bank that has resulted from an interstate merger transaction.
(17) "State" means any state of the United States, the District of Columbia, or any territory of the United States, or any legally incorporated jurisdiction deemed to be a state by the District's Superintendent of Banking and Financial Institutions.
(18) "Superintendent" means the District's Superintendent of Banking and Financial Institutions.
(June 13, 1996, D.C. Law 11-142, § 3, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-852.
Legislative History of Laws
For legislative history of D.C. Law 11-142, see Historical and Statutory Notes following § 26-731.
(a) With the approval of the Superintendent, a District state bank may establish and maintain a de novo branch or acquire a branch in a state other than the District.
(b) A District state bank ("applicant") desiring to branch into a state other than the District under this section shall file an application on a form provided by the Superintendent and pay a branching fee of $500 to the Superintendent. If, within 30 days after receipt of the application, the Superintendent determines that the applicant possesses sufficient resources to branch into a state other than the District, the Superintendent shall approve the application.
(c) In reviewing the application, the Superintendent shall consider the views of the state bank supervisor of the host state where the branch is proposed to be located.
(d) If the Superintendent fails to approve or disapprove an application within 30 days of receipt, the application shall be deemed approved. The Superintendent may extend this 30-day review period for an additional 30 days upon a showing of good cause.
(e) A District state bank that branches into a state other than the District may exercise, at that branch, all rights and powers permitted to banks chartered by that state unless the Superintendent determines that the exercise of such rights or powers would threaten the safety and soundness of the District bank.
(June 13, 1996, D.C. Law 11-142, § 4, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-853.
Temporary Amendments of Section
Section 2(a) of D.C. Law 11-257 amended (a) to read as follows.
"(a) No person shall engage in business as a mortgage lender or mortgage broker, or both, or hold himself or herself out to the public to be a mortgage lender or mortgage broker for 150 days after the effective date of this chapter, unless such person has first obtained a license under this chapter."
Section 4(b) of D.C. Law 11-257 provides that the act shall expire after 225 days of its having taken effect.
Legislative History of Laws
For legislative history of D.C. Law 11-142, see Historical and Statutory Notes following § 26-731.
Law 11-257, the "Mortgage Lender and Broker Act of 1996 Time Extension Temporary Amendment Act of 1996," was introduced in Council and assigned Bill No. 11-922, which was retained by CounciL. The Bill was adopted on first and second readings on November 7, 1996, and December 3, 1996, respectively. It was assigned Act No. 11-507 and transmitted to both Houses of Congress for its review. D.C. Law 11-257 became effective on April 9, 1997.
Miscellaneous Notes
Fees credited to the Office of Banking and Financial Institutions Enterprise Fund: Section 1804(3) of D.C. Law 12-60 provided that all fees received pursuant to § 26-853(b) [1981 Ed.] shall be credited to the Office of Banking and Financial Institutions Enterprise Fund.
(a) An out-of-state bank ("applicant") that does not maintain a branch within the District may establish and maintain a de novo branch or may acquire a branch within the District provided the applicant meets the following requirements:
(1) Submits to the Superintendent a copy of the application it files with its home state supervisor or with the appropriate federal agency in order to establish such branch within the District;
(2) Pays a branching fee to be determined by the Superintendent; and
(3)(A) In the case of a de novo branch to be established prior to June 1, 1997, the laws of the home state of the applicant permit District banks to establish and maintain de novo branches in that state under terms similar to those set forth in this subchapter; or
(B) In the case of a branch to be established through acquisition of a branch prior to June 1, 1997, the laws of the home state of the applicant permit District banks to establish and maintain branches in that state through the acquisition of branches under terms similar to those set forth in this subchapter.
(b) An out-of-state state bank that establishes and maintains a branch in the District may exercise, at such branch, all rights and powers permitted to be exercised by District state banks unless the out-of-state state bank's home state determines that the exercise of such rights or powers would threaten the safety and soundness of the out-of-state state bank.
(June 13, 1996, D.C. Law 11-142, § 5, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-854.
Temporary Amendments of Section
Section 2(b) of D.C. Law 11-247 amends (b) to read as follows:
"(b) The Superintendent shall approve or deny each application for a license within 60 days after the date from when the application and bond are filed and the fees are paid. The Superintendent may issue a provisional license to an applicant who has filed the application and bond and paid all required fees if the Superintendent determines that he is unable to complete the application review process within 60 days."
Section 4(b) of D.C. Law 11-247 provides that the act shall expire after 225 days of its having taken effect.
Legislative History of Laws
For legislative history of D.C. Law 11-142, see Historical and Statutory Notes following § 26-731.
For legislative history of D.C. Law 11-247, see Historical and Statutory Notes following § 26-733.
(a) The Superintendent may conduct examinations of any branch of an out-of-state state bank established or maintained within the District pursuant to § 26-734 to ensure that such branch is operating in a safe and sound manner and to ensure that such branch is in compliance with the laws of the District.
(b) The Superintendent may require periodic reports from any out-of-state bank that establishes or maintains a branch in the District pursuant to § 26-734, including reports regarding any agency agreements entered into between a branch and a depository institution affiliate as authorized and established by § 26-739, provided that the reports:
(1) Are similar to reports required from District banks by the Superintendent; and
(2) Are not preempted by federal law.
(c) The Superintendent may enter into cooperative agreements with any other state bank regulators for any legal purpose, including agreements for sharing of examination fees and other regulatory fees, in order to prevent duplication of regulatory functions and for the convenience and needs of the public.
(d) An out-of-state bank that has established and maintained a branch in the District may establish and maintain additional branches in the District to the same extent as a District state bank or to the extent otherwise permitted by federal law.
(June 13, 1996, D.C. Law 11-142, § 6, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-855.
Legislative History of Laws
For legislative history of D.C. Law 11-142, see Historical and Statutory Notes following § 26-731.
(a) With the permission of the Superintendent, a District state bank may maintain and operate a branch in a state other than the District pursuant to an interstate merger transaction with an out-of-state bank in which the District state bank is the resulting bank.
(b) A District state bank ("applicant") desiring to establish and maintain a branch in another state under this section shall file an application on a form provided by the Superintendent and pay a merger fee to be determined by the Superintendent. If, within 30 days of receipt of the application, the Superintendent determines that the applicant possesses sufficient financial resources, sufficient managerial and professional experience, and that the proposed merger is in the public interest, the Superintendent shall approve the application for an interstate merger transaction and for the operation of branches in a state other than the District by the District state bank.
(c) In reviewing the application, the Superintendent shall consider the views of the state bank supervisor of the host state where the interstate merger transaction is to be consummated.
(d) If the Superintendent fails to approve or disapprove an application within 30 days of receipt, the application shall be deemed approved. The Superintendent may extend this 30-day review period for an additional 30 days upon a showing of good cause.
(e) A District state bank that establishes and maintains a branch in a state other than the District pursuant to an interstate merger transaction may exercise, at such branch, all rights and powers permitted to banks chartered by that state unless the Superintendent determines that the exercise of such rights or powers would threaten the safety and soundness of the District state bank.
(June 13, 1996, D.C. Law 11-142, § 7, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-856.
Legislative History of Laws
For legislative history of D.C. Law 11-142, see Historical and Statutory Notes following § 26-731.
Miscellaneous Notes
Fees credited to the Office of Banking and Financial Institutions Enterprise Fund: Section 1804(3) of D.C. Law 12-60 provided that all fees received pursuant to § 26-856(b) [1981 Ed.] shall be credited to the Office of Banking and Financial Institutions Enterprise Fund.
(a) A District bank may engage with an out-of-state bank ("applicant") in an interstate merger transaction where the resulting bank is not a District state bank. The resulting bank from such an interstate merger transaction may maintain and operate the branches in the District of the merged District bank, provided the applicant meets the following requirements:
(1) Submits to the Superintendent a copy of the application it files with its home state regulator or with the federal banking agency in order to consummate such merger within the District;
(2) Pays a merger fee to be determined by the Superintendent. This fee may be waived by the Superintendent if the Superintendent determines that the fee paid by the applicant in its home state is sufficient;
(3) Prior to consummation of such merger, obtains a certificate of authority to transact business in the District in accordance with § 29-101.99. The applicant shall be entitled to do so notwithstanding the exclusion of the business of banking under the terms of § 29-101.99(a); and
(4) In the case of an interstate merger transaction to be consummated prior to June 1, 1997, the laws of the home state of the applicant permit District banks to consummate interstate merger transactions in the home state under terms similar to those set forth in this subchapter.
(b) An out-of-state state bank that engages in an interstate merger transaction with a District bank and is the resulting bank may exercise at its branches in the District all rights and powers to be exercised by District state banks, unless the out-of-state state bank's home state determines that the exercise of such rights or powers would threaten the safety and soundness of the out-of-state state bank.
(June 13, 1996, D.C. Law 11-142, § 8, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-857.
Legislative History of Laws
For legislative history of D.C. Law 11-142, see Historical and Statutory Notes following § 26-731.
Miscellaneous Notes
Fees credited to the Office of Banking and Financial Institutions Enterprise Fund: Section 1804(3) of D.C. Law 12-60 provided that all fees received pursuant to § 26-857(a)(2) [1981 Ed.] shall be credited to the Office of Banking and Financial Institutions Enterprise Fund.
(a) The Superintendent may conduct examinations of any branch of an out-of-state state bank established within the District pursuant to an interstate merger transaction to ensure that such branch is operating in a safe and sound manner and to ensure that such branch is in compliance with the laws of the District.
(b) The Superintendent may require periodic reports from any branch of an out-of-state bank established within the District pursuant to an interstate merger transaction, including reports regarding any agency agreements entered into between a branch and a depository institution affiliate authorized and established pursuant to § 26-739, provided that the reports:
(1) Are similar to reports required from District banks by the Superintendent; and
(2) Are not preempted by federal law.
(c) The Superintendent may enter into cooperative agreements with any other state bank regulators for any legal purpose, including agreements for sharing of examination fees and other regulatory fees, in order to prevent duplication of regulatory functions and for the convenience and needs of the public.
(d) An out-of-state bank that has acquired a branch in the District pursuant to an interstate merger transaction may establish and maintain additional branches in the District to the same extent as a District state bank or to the extent otherwise permitted by federal law.
(June 13, 1996, D.C. Law 11-142, § 9, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-858.
Legislative History of Laws
For legislative history of D.C. Law 11-142, see Historical and Statutory Notes following § 26-731.
A District state bank that is a subsidiary of a bank holding company may agree to receive deposits, renew time deposits, close loans, service loans, receive payments on loans and other obligations, and perform such other services as the Superintendent may determine are appropriate, as an agent for a depository institution affiliate.
(June 13, 1996, D.C. Law 11-142, § 10, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-859.
Legislative History of Laws
For legislative history of D.C. Law 11-142, see Historical and Statutory Notes following § 26-731.
If the Superintendent determines that any law of the District has been violated in the operation of a branch in the District of an out-of-state state bank, or that such branch is being operated in an unsafe or unsound manner pursuant to this subchapter, the Superintendent shall have the authority to undertake such enforcement actions as it would be permitted to take if the branch were a District state bank.
(June 13, 1996, D.C. Law 11-142, § 11, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-860.
Legislative History of Laws
For legislative history of D.C. Law 11-142, see Historical and Statutory Notes following § 26-731.
(a) The Superintendent, pursuant to subchapter I of Chapter 5 of Title 2, shall issue rules to implement the provisions of this subchapter.
(b) The proposed rules shall be submitted to the Council for a 45-day period of review, excluding Saturdays, Sundays, legal holidays, and days of Council recess. If the Council does not approve or disapprove the proposed rules, in whole or in part, by resolution within this 45-day review period, the proposed rules shall be deemed approved.
(June 13, 1996, D.C. Law 11-142, § 12, 43 DCR 2159.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 26-861.
Legislative History of Laws
For legislative history of D.C. Law 11-142, see Historical and Statutory Notes following § 26-731.
