(a) The minimum amount of initial capital for a merchant bank shall be $20 million, of which at least $10 million shall be common stock or an equity interest. The balance may be composed of qualifying subordinated or similar debt as determined under regulations promulgated by the Commissioner. The Commissioner may modify the required minimum amount of initial capital if an applicant files with the Commissioner a written request and application, which application shall include a capital plan and any other documentation required by the Commissioner by regulation or order.
(b) A merchant bank shall maintain minimum capital in at least the same amount as the minimum initial capital required under subsection (a) of this section or in such other amount as the Commissioner may establish by rule or by order, after the filing of a request and application by a merchant bank; provided, the Commissioner shall not establish a minimum capital requirement for a merchant bank that is less than 150% of the tier 1 risk-based capital or 150% of the total risk-based capital established by the Board of Governors of the Federal Reserve System for a well-capitalized bank.
(June 9, 2001, D.C. Law 13-308, § 308, 48 DCR 3244.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For Law 13-308, see notes following § 26-833.01.
(a) A merchant bank may be organized as a corporation, limited liability company, limited partnership, or limited liability partnership.
(b) The articles of incorporation or other organizational documents of a merchant bank shall contain the following statement: "This [corporation/limited liability company/limited partnership/limited liability partnership] is subject to the requirements of the District of Columbia Banking Code and does not have the power to solicit, receive or accept money or its equivalent on deposit." The appropriate business form listed in the bracketed text in the statement shall be included in the statement. The statement shall not otherwise be amended.
(c) A merchant bank may use as a part of its name the word "bank," "banker", "banking", or any abbreviations of those words.
(June 9, 2001, D.C. Law 13-308, § 309, 48 DCR 3244.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For Law 13-308, see notes following § 26-833.01.
(a) The board of directors of a merchant bank, if the merchant bank is a corporation, or its equivalent governing body, if the merchant bank is another type of business entity, shall establish a written policy under which the merchant bank's business activities shall be conducted. The written policy shall include the merchant bank's business plan, operating procedures, investment policies, and lending policies. The written policy shall also address conflicts of interest and shall preclude a merchant bank from making an investment in a small business if the effect is to create the potential of a conflict of interest with a person having an ownership interest in the merchant bank.
(b) The written policy under subsection (a) of this section for business activities shall be reviewed and approved or disapproved by the Commissioner. If the Commissioner finds that the policy does not adequately regulate the business activities of the merchant bank, the Commissioner may require the board of directors, or equivalent governing body, to take corrective action.
(June 9, 2001, D.C. Law 13-308, § 310, 48 DCR 3244.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For Law 13-308, see notes following § 26-833.01.
