Sec. I-1. 9-B MRSA §411, as enacted by PL 1975, c. 500, §1, is amended to read:
§411. Applicability of chapter
The provisions of this chapter shall set forth the powers granted to all financial institutions organized pursuant to chapters 31 and 32. Additional powers granted to savings banks, trust companies and savings and loan associations shall be as provided in Parts 5, 6 and 7, respectively. The powers, privileges, duties and restrictions conferred and imposed in the charter or act of incorporation of any trust company, savings bank or savings and loan association organized under the prior laws of this State are abridged, enlarged or modified so that every such charter or act of incorporation conforms to this Title. Notwithstanding anything in a charter or act of incorporation of such an institution, every such institution possesses the powers, rights and privileges and is subject to the duties, restrictions and liabilities conferred and imposed by this Title.
Sec. I-2. 9-B MRSA §412, sub-§§1 and 10, as enacted by PL 1975, c. 500, §1, are amended to read:
1. Exist. To exist perpetually or as provided for in its organizational documents;
10. Corporate league; membership. To join the Federal Reserve System or the Federal Home Loan Bank or any cooperative league or other entity organized for the purpose of protecting and promoting the welfare of financial institutions of the same type and their depositors; and to comply with all conditions of membership therein.
Sec. I-3. 9-B MRSA §412-A, sub-§3 is enacted to read:
3. Notification. Any issuance considered as capital under subsection 1 or under those rules adopted under subsection 1 must be submitted to the superintendent for the superintendent's review at least 10 days prior to issuance and include such documentation as the superintendent considers necessary.
Sec. I-4. 9-B MRSA §413, first ¶, as enacted by PL 1975, c. 500, §1, is amended to read:
In addition to any general borrowing powers specified elsewhere in this Title, a A financial institution may obtain funds in the manner set forth below: borrow money on such terms and conditions as it may determine, issue its notes, bonds and other obligations and secure any of its obligations by mortgage, pledge or other encumbrance of all or any part of its property.
Sec. I-5. 9-B MRSA §413, sub-§1, as amended by PL 1997, c. 22, §11, is repealed.
Sec. I-6. 9-B MRSA §413, sub-§2, as amended by PL 1975, c. 666, §19, is repealed.
Sec. I-7. 9-B MRSA §414, as enacted by PL 1975, c. 500, §1, is repealed.
Sec. I-8. 9-B MRSA §415, as enacted by PL 1975, c. 500, §1, is amended to read:
§415. Participation in public agencies
To the extent authorized by the superintendent pursuant to regulations, a financial institution shall have has the power to participate in a public agency hereafter created under the laws of this State or of the United States, the purpose of which is to afford advantages or safeguards to financial institutions, depositors or shareholders, investors and to comply with all requirements and conditions imposed upon such participants.
Sec. I-9. 9-B MRSA §417, as amended by PL 1983, c. 597, §1, is further amended to read:
§417. Equity interest in Maine financial institutions
A financial institution authorized to do business in this State may acquire control of any other financial institution authorized to do business in this State or of a Maine financial institution holding company with the prior approval of the superintendent. A financial institution authorized to do business in this State may acquire more than 5% of the voting shares equity interest of any other financial institution authorized to do business in this State or of a Maine financial institution holding company with the prior approval of the superintendent.
Notwithstanding the investment limitations in section 554, and subject to any approval required under this section, and subject to any approval required by and any limitations contained in section 1013, a Maine financial institution may acquire control of a financial institution within or outside this State.
Sec. I-10. 9-B MRSA §§419 and 419-A are enacted to read:
1. Investment and equity securities. A financial institution is authorized to purchase, sell, underwrite and hold investment securities and equity securities, consistent with safe and sound banking practices. For purposes of this section, the term "investment securities" includes credit instruments such as commercial paper, banker's acceptances, certificates of deposit, repurchase agreements and overnight federal funds, in addition to marketable obligations in the form of bonds, notes, debentures or other similar instruments that are commonly regarded as investment securities. A financial institution's holding of equity securities is limited to 100% of its total capital unless a higher limit is authorized by the superintendent. The purchase of speculative securities or equities is prohibited, except that a financial institution may make venture capital investments up to 20% of the institution's total capital unless a higher limit is authorized by the superintendent.
2. Written investment policy. A financial institution's governing body shall establish a written investment policy, which it shall review and ratify at least annually, that addresses, at a minimum, the following:
A. Investment quality parameters;
B. Investment mix and diversification;
C. Investment maturities; and
D. Delegation of authority to officers and committees responsible for administering the portfolio.
In addition to real estate owned for offices and facilities pursuant to chapter 33, a financial institution may acquire all property, real, personal and mixed, by mortgage foreclosure, purchase or by any other means and may hold the property for investment purposes and may improve, develop, lease, contract, convey and otherwise exercise control over the property.
Sec. I-11. 9-B MRSA §421, sub-§1, as enacted by PL 1975, c. 500, §1, is amended to read:
1. Applicability. The sections of this chapter shall govern deposits or accounts in financial institutions subject to the provisions of this Title and shall govern, when applicable, the deposit powers of specific types of institutions set forth in chapters 52, 62 or 72.
Sec. I-12. 9-B MRSA §421-A is enacted to read:
§421-A. General deposit powers
Unless otherwise prohibited by state law, a financial institution may establish the types and terms, including the minimum and maximum amounts that it may accept and the frequency and computation method of paying interest, of deposits that it solicits and accepts. A financial institution may refuse deposits at its pleasure and a financial institution may pledge or hypothecate any of its assets as security for deposits.
Sec. I-13. 9-B MRSA §422, as amended by PL 1995, c. 628, §22, is further amended to read:
§422. Insurance of deposits or accounts
1. Requirement. A financial institution organized under the laws of this State or a branch of an out-of-state financial institution authorized to do business in this State shall take any action necessary to have its deposits or accounts insured by the Federal Deposit Insurance Corporation or its successors FDIC. For purposes of this section, a branch of an out-of-state financial institution does not include a branch of a foreign bank that is not eligible for insurance of accounts by the Federal Deposit Insurance Corporation or its successors FDIC.
4. Applicable law. A financial institution which that has its deposits or accounts insured pursuant to this section shall comply with all statutes and regulations governing the insurance of deposits or accounts by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation; provided that nothing contained in this FDIC. This section shall may not be construed as repealing, modifying or impairing any powers, duties, rights or responsibilities under the provisions of this Title of the superintendent or of the financial institution so insured.
5. Exception. A financial institution organized pursuant to Part 12 is not required to have its deposits or accounts insured by the FDIC.
Sec. I-14. 9-B MRSA §422-A, sub-§2, as enacted by PL 1981, c. 155, §2, is amended to read:
2. Transition period. Reserves held by a financial institution or credit union to meet the requirements of this section shall must be in the form prescribed by the Federal Reserve Act, Section 19(c), as amended, and any regulations promulgated under it; except that until September 1, 1987, such reserves may also be in the form of:.
A. Deposits held in commercial banks, savings banks and savings and loan associations;
B. Federal funds sold to banks pursuant to section 438;
C. The book value of investments in obligations of the United States; and
D. The book value of investments in obligations, notes and debentures issued by any agency or instrumentality of the United States.
The superintendent shall establish a maximum maturity period for investments in paragraphs C and D between 0 and 5 years as he deems necessary and conditions warrant.
Sec. I-15. 9-B MRSA §423, as amended by PL 1983, c. 34, is repealed.
Sec. I-16. 9-B MRSA §424, as amended by PL 1981, c. 155, §4, is repealed.
Sec. I-17. 9-B MRSA §425, as enacted by PL 1975, c. 500, §1, is repealed.
Sec. I-18. 9-B MRSA §426, sub-§§1 and 4, as enacted by PL 1975, c. 500, §1, are amended to read:
1. Withdrawal notice may be required. A financial institution may at any time, by resolution of its board of directors governing body, require written notice by a savings depositor not to exceed 90 days prior to the repayment of deposits or accounts, or may require similar notice before repaying deposits in excess of $50, or certain classes of savings deposits or accounts.
4. Interest earned until actual withdrawal. The written notice of withdrawal required pursuant to this section shall does not constitute a withdrawal from such the deposit or account for purposes of section 425 until the amounts noticed shall have been actually withdrawn by the depositor giving such written notice, and interest shall be is earned thereon on these amounts for the period prior to actual withdrawal as provided in section 425.
Sec. I-19. 9-B MRSA §426, sub-§5, as enacted by PL 1975, c. 500, §1, is repealed.
Sec. I-20. 9-B MRSA §431, as enacted by PL 1975, c. 500, §1, is amended to read:
§431. Applicability of chapter
The sections of this chapter shall govern loans made by financial institutions subject to the provisions of this Title and shall be in addition to the lending powers set forth in chapters 53, 63 and 73 for each type of institution.
Sec. I-21. 9-B MRSA §431-A is enacted to read:
1. General loan authority. Unless otherwise prohibited by state law, a financial institution may make, sell, purchase, arrange, participate in, invest in or otherwise deal in loans or extensions of credit, as defined in section 439-A, for any purpose.
2. Written loan policy. A financial institution's governing body shall establish a written loan policy, which must be reviewed and ratified at least annually, that addresses at a minimum, the following:
A. Individual lending officer authority;
B. Loan mix and diversification;
C. Loan quality parameters; and
D. Delegation of authority to officers and committees responsible for administering the portfolio.
Sec. I-22. 9-B MRSA §434, as amended by PL 1987, c. 785, §1, is repealed.
Sec. I-23. 9-B MRSA §437, as enacted by PL 1975, c. 500, §1, is repealed.
Sec. I-24. 9-B MRSA §438, as amended by PL 1979, c. 429, §9, is repealed.
Sec. I-25. 9-B MRSA §439-A, sub-§2, as amended by PL 1991, c. 681, §1, is further amended to read:
2. Limitations. A financial institution subject to this Title or a service corporation established pursuant to section 445 may not make loans or extensions of credit outstanding at one time to a person in excess of 20% of its total capital and surplus. Total loans or other extensions of credit in excess of 10% of total capital and surplus must be approved by a majority of the board of directors governing body or the executive committee of that institution or corporation. Any loan made in violation of this section is subject to the remedies prescribed in section 465-A.
Sec. I-26. 9-B MRSA §439-A, sub-§5, as enacted by PL 1991, c. 34, §8, is amended to read:
5. Rulemaking. The superintendent may adopt rules to administer and carry out this section, including rules to define or further define terms used in this section and to establish limits or requirements other than those specified in this section if the superintendent determines that such action is necessary for the protection of depositors, shareholders investors or the public. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.
Sec. I-27. 9-B MRSA §441, as enacted by PL 1975, c. 500, §1, is amended to read:
§441. Applicability of chapter
The provisions of this chapter shall govern the services and incidental activities offered by financial institutions, except as otherwise provided in Parts 5, 6 and 7.
Sec. I-28. 9-B MRSA §441-A is enacted to read:
Unless otherwise prohibited or limited by this Title or rules adopted by the superintendent, a financial institution has and may exercise all powers necessary or convenient to effect the purposes for which the financial institution is organized or to further the businesses in which the financial institution is lawfully engaged.
Sec. I-29. 9-B MRSA §442, sub-§1, as amended by PL 1985, c. 588, §1, is further amended to read:
1. Authorization; limitation. Savings banks and savings and loan associations Financial institutions may act as trustee under a retirement plan established pursuant to the Act of Congress entitled "Self-employed Individuals Retirement Act of 1962," as amended; an individual retirement arrangement pursuant to the "Employee Retirement Income Security Act of 1974," as amended; a simplified employee pension plan pursuant to the "Revenue Act of 1978," as amended; or any similar qualified retirement plan pursuant to federal law. This section in no way limits the authority granted to trust departments of financial institutions.
Sec. I-30. 9-B MRSA §443, first ¶, as enacted by PL 1975, c. 500, §1, is amended to read:
In addition to all customer services financial in nature or incidental to, reasonably related to or convenient and useful to the powers granted in its articles of incorporation organizational documents, a financial institution authorized to do business in this State may offer the services set forth below to its customers, depositors or members.
Sec. I-31. 9-B MRSA §443, sub-§§1 to 6, as enacted by PL 1975, c. 500, §1, are repealed.
Sec. I-32. 9-B MRSA §443, sub-§§8 to 10, as enacted by PL 1987, c. 405, §1, are repealed.
Sec. I-33. 9-B MRSA §444, as enacted by PL 1975, c. 500, §1, is repealed.
Sec. I-34. 9-B MRSA §446, as amended by PL 1997, c. 22, §§17 and 18, is repealed.
Sec. I-35. 9-B MRSA §446-A is enacted to read:
§446-A. Closely related activities
A financial institution authorized to do business in this State may engage, directly or indirectly, in closely related activities as defined in section 131, subsection 6-A. The financial institution may engage in those activities directly, or indirectly through a subsidiary, unless the superintendent determines that an activity must be conducted through a subsidiary with appropriate corporate firewalls and safeguards, as determined by the superintendent, that limit the financial institution's exposure by emphasizing the subsidiary's independent legal structure.
1. Application required. A financial institution shall make application to the superintendent in accordance with section 252 for authority to engage in a closely related activity, except that an application is not necessary if all of the following conditions are satisfied:
A. Before and immediately after the proposed transaction, the acquiring financial institution is well capitalized as determined by the superintendent;
B. At the time of the transaction, the acquiring financial institution is well managed, which means that in connection with the financial institution's most recent examination:
(1) The financial institution received a composite rating of one or 2 pursuant to the uniform financial institution rating system adopted by the Bureau of Banking; and
(2) The financial institution received at least a satisfactory rating for management;
C. The book value of the total assets to be acquired does not exceed 15% of the consolidated total risk-weighted assets of the acquiring institution;
D. The consideration to be paid for the securities or assets to be acquired does not exceed 15% of the consolidated capital of the acquiring institution;
E. During the 12-month period prior to the proposed transaction, the acquiring institution has not been under an enforcement action nor is there an enforcement action pending;
F. The acquiring institution provides written notification to the superintendent not later than 10 business days after consummating the transaction; and
G. The activity is authorized pursuant to this Title or by rule or order of the superintendent.
2. Joint ownership. A subsidiary corporation formed pursuant to this section may be owned jointly with one or more persons, if the superintendent approves the joint ownership.
3. Investment limits. The amount of investment in any one subsidiary corporation may not exceed 20% of the financial institution's total capital. The aggregate investment in all subsidiary corporations may not exceed 50% of the financial institution's total capital. The superintendent may approve higher limits upon request.
Sec. I-36. 9-B MRSA §451, as enacted by PL 1975, c. 500, §1, is amended to read:
§451. Applicability of chapter
The provisions of this chapter shall apply to financial institutions organized under Parts 5, 6, 7 and 9, chapters 31 and 32 and shall establish minimum recordkeeping record-keeping requirements for such these financial institutions.
Sec. I-37. 9-B MRSA §452, as enacted by PL 1975, c. 500, §1, is amended to read:
§452. Maintenance of records; accounting and assets
1. Safekeeping of assets and records. Every financial institution shall make provisions to secure the safekeeping of the financial institution's assets and its books, accounts and records; and to shall keep them separate and apart from the assets or property of others. An A financial institution may use the services of a correspondent bank as a depository for securities owned or held as collateral, of a computer service organization for accounting, or the practice of nominee registration of title of securities, other entities when reasonably appropriate to accomplish the duties imposed by this section.
2. Books and accounting. The clerk or treasurer of every financial institution, or such other officer as may be designated in the bylaws or by a duly recorded vote of its directors, shall cause the books and accounts of the financial institution to be kept in such manner and form as will most accurately and promptly reflect its condition and earnings accordance with generally accepted accounting principles unless the superintendent otherwise prescribes. The superintendent may prescribe the manner and form of keeping such books and accounts, which need not be uniform.
3. Assets.
A. No asset shall be entered on the books of a financial institution at a figure in excess of its actual cost to the institution; nor shall the book value of any such asset be thereafter increased, except upon the written authorization of the superintendent or as may be provided below.
B. The directors may in their discretion authorize the carrying of any item of assets of the institution at a value less than its cost to the institution, may authorize such provision for depreciation of physical assets as in their judgment may be required, and may provide for systematic amortization of premiums of bonds or other obligations acquired at a cost other than the par value thereof, or the directors may provide for accretion in accordance with generally accepted accounting principles for financial institutions.
4. Fair value. The superintendent may require any of the assets of a financial institution to be charged down to such sum as in his the superintendent's judgment represents its fair value.
Sec. I-38. 9-B MRSA §453, sub-§1, as enacted by PL 1975, c. 500, §1, is amended to read:
1. Selection of auditor. The board of directors governing body of a financial institution subject to the provisions of this Title shall employ an independent public accountant or accountants at least annually.
Sec. I-39. 9-B MRSA §454, as enacted by PL 1975, c. 500, §1, is amended to read:
§454. Destruction of deposit records
When a Any statement of account has been rendered by a financial institution to a depositor accompanied by vouchers, if any, which are the basis for debit entries in such account, or the depositor's or any account book or passbook that has been written up by the financial institution showing to show the condition of the depositor's account and delivered to such depositor with like accompaniment of accompanied by vouchers, if any, such account, after the period of 6 years from the date of its rendition, in the event no objection thereto has been made theretofore by the depositor, shall be that are the basis for debit entries to the account are deemed finally adjusted and settled and its correctness are conclusively presumed and such depositor shall thereafter be barred from questioning the correctness of such account for any cause to be correct after a period of 6 years from rendition if the depositor has not questioned the correctness of the account. Nothing herein shall The depositor is thereafter barred from questioning the account. This section may not be construed to relieve the depositor from the duty now imposed by law of exercising due diligence in the examination of such account and vouchers, if any, when rendered by the financial institution and of immediate notification to the financial institution upon discovery of any error therein in such account, nor from the legal consequences of neglect of such duty, nor to prevent the application of Title 11 to cases governed thereby by Title 11. Financial Accordingly, financial institutions shall accordingly are not be required to preserve or keep their records or files relating thereto to these accounts and vouchers for a longer period than 6 years.
Sec. I-40. 9-B MRSA §468 is enacted to read:
§468. Restrictions on transactions with affiliates
1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
A. "Covered transaction" means, with respect to an affiliate of a financial institution:
(1) A loan or extension of credit to the affiliate;
(2) A purchase of or an investment in securities issued by the affiliate;
(3) A purchase of assets, including assets subject to agreement to repurchase, from the affiliate unless exempted by rule or order of the superintendent;
(4) The acceptance of securities issued by the affiliate as collateral security for a loan or extension of credit to any person; or
(5) The issuance of a guarantee, acceptance or letter of credit, including an endorsement or standby letter of credit, on behalf of an affiliate.
B. "Transaction with an affiliate" means any transaction by a financial institution or its subsidiary with any person if any of the proceeds of the transaction are used for the benefit of, or transferred to, an affiliate.
2. Authorization. A financial institution and its subsidiaries may engage in a transaction with an affiliate subject to the following conditions:
A. The terms and circumstances, including credit standards, are substantially the same, or at least as favorable to the institution or its subsidiary, as those prevailing at the time for comparable transactions with or involving other nonaffiliated companies; or
B. In the absence of comparable transactions, the terms and circumstances, including credit standards, would in good faith be offered to, or would apply to, nonaffiliated companies.
3. Covered transactions. In addition to the requirements of subsection 2, a financial institution and its subsidiaries may engage in a covered transaction with an affiliate subject to the following limitations:
A. In the case of an individual affiliate, the aggregate amount of covered transactions may not exceed 10% of the financial institution's total capital;
B. In the case of all affiliates, the aggregate amount of covered transactions may not exceed 20% of the financial institution's total capital;
C. A financial institution and its subsidiaries may not purchase a low-quality asset from an affiliate;
D. Any covered transactions and any other transactions between a financial institution and its affiliates permitted by the superintendent pursuant to subsection 6 must be on terms and conditions that are consistent with safe and sound banking practices; and
E. Each loan or extension of credit to, or guarantee, acceptance or letter of credit issued on behalf of, an affiliate by a financial institution or its subsidiary must be fully secured at the time of the transaction by eligible collateral.
4. Prohibited transactions. The following transactions are prohibited.
A. A financial institution or its subsidiary may not purchase as fiduciary any securities or other assets from any affiliate unless this purchase is permitted under the instrument creating the fiduciary relationship, the purchase is pursuant to court order or the purchase is pursuant to law of the jurisdiction governing the fiduciary relationship.
B. A financial institution or its subsidiary, whether acting as principal or fiduciary, may not knowingly purchase or otherwise acquire, during the existence of any underwriting or selling syndicate, any security if a principal underwriter of that security is an affiliate of the financial institution, unless the purchase or acquisition of this security has been approved, before this security is initially offered for sale to the public, by a majority of the governing body of the financial institution who are not officers or employees of the financial institution or any affiliate of the financial institution.
5. Violations. Any transaction made in violation of this section is subject to the remedies prescribed in section 465-A.
6. Rulemaking. The superintendent may, by rule or order, define or further define terms used in this section and establish limits, requirements or exceptions to this section other than those specified in this section, if the superintendent determines such action is necessary for the protection of depositors or the public and is consistent with the purposes of this section. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.
Sec. I-41. 9-B MRSA c. 47 is enacted to read:
CHAPTER 47
TRUST ACTIVITIES OF FINANCIAL INSTITUTIONS
A financial institution may act as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates or in any other fiduciary capacity. Assets held in any fiduciary capacity must be segregated from the general assets of the financial institution and the financial institution shall keep a separate set of books and records showing in proper detail all transactions engaged in under this section. The trust activities of financial institutions are governed by this chapter and the Probate Code.
A financial institution shall provide the superintendent 60 days' notice prior to conducting trust activities. The superintendent may prescribe the form and content of the notice, including, but not limited to, business plans, financial projections and management. Notice is not required if trust activities are limited to retirement plans established pursuant to the federal Self-employed Individuals Tax Retirement Act of 1962, Public Law 87-792, 76 Stat. 809, the Employee Retirement Income Security Act of 1974, 29 United States Code, Sections 1001-1461 (1997) or other acts if the retirement funds are invested exclusively in the deposit accounts of the financial institution.
1. Separation of trust assets. Except as otherwise provided, all securities, money and property received by any financial institution to be held in trust or in any other fiduciary capacity must be kept separate and apart from the other assets of the financial institution.
2. Separation of trust account investments. The investments of each account must be kept separate from those of all other accounts, except that:
A. They may be placed in the custody of any other financial institution or trust company, whether within or without this State, and may, while so held, be commingled with other securities of other such accounts, if records are kept that show the share of each account in the commingled securities;
B. They may be commingled with similar securities of other accounts, if records are kept to show the share of each account in the commingled securities. The ownership of and other interests in the securities credited to such account may be transferred by entries on the books of the financial institution without physical delivery of any securities;
C. Assets held by a trustee, executor, administrator, guardian or other fiduciary may be invested in a common trust fund established under Title 18-A, section 7-501;
D. Securities, the principal and interest of which the United States or any department, agency or instrumentality of the United States has agreed to pay or has guaranteed the payment of, may be deposited with the Federal Reserve Bank in the district in which this State is located, to be credited to one or more fiduciary or safekeeping accounts on the books of that Federal Reserve Bank in the name of the financial institution and to which accounts other similar securities may be credited. A financial institution that deposits securities with a Federal Reserve Bank is subject to rules with respect to the making and maintenance of these deposits the superintendent may from time to time adopt;
E. Any cash, whether principal or income, or both, may be deposited in the financial institution in an account, either time or demand, specifically stating the trust to which the cash belongs; and
F. Any cash, whether principal or income, or both, may be deposited in the financial institution in an aggregate deposit, either time or demand, including balances from other trusts, if the books of the trust department show the specific interest of each trust in this aggregate deposit.
3. Record of trust account. A record of all matters relating to each trust account must be kept separately in the trust department and must indicate the particulars respecting each account as the superintendent directs.
4. Exclusion from other financial institution liabilities. The trust assets held by any financial institution are not subject to any other liabilities of the financial institution.
A surety is not necessary on the bond of the financial institution in its capacity as trustee, executor, administrator, conservator, guardian, assignee or receiver, or in any other capacity, unless the court or officer approving the bond requires it.
The superintendent may adopt rules governing the trust activities of financial institutions. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.
§476. Transfer of fiduciary relationships to and from affiliated financial institutions
A financial institution may transfer its fiduciary relationships to another affiliate if the affiliate to which the fiduciary relationships are being transferred is authorized to conduct trust activities in the manner described in this section.
1. Petition. The following provisions govern the petition process.
A. The transferee affiliate may apply by petition to the Superior Court or Probate Court in and for the county in which its principal office is located requesting that it be substituted for its affiliate specified in the petition in every existing fiduciary capacity designated in the petition and, in the case of the first petition, in every fiduciary capacity that may take effect after the date on which that petition is filed.
B. Each transferor affiliate shall join in the petition. Notice of the filing of the petition must be given to the superintendent prior to the filing.
C. The petition must indicate the county in which the principal office of each transferor affiliate joining in the petition is located and must designate each fiduciary relationship existing at the date of the petition with respect to which the transferee affiliate, referred to in this section as the "petitioner," requests substitution. The petition additionally must set forth, with regard to each existing fiduciary relationship designated in the petition, the name and address last known to the petitioner of each person entitled to receive notice of hearing on the petition, as follows:
(1) In a case in which the transferor affiliate specified in the petition is acting with one or more cofiduciaries in respect to the fiduciary relationship, each cofiduciary;
(2) In a case in which the instrument creating the fiduciary relationship so provides, each person who, alone or together with others, may revoke, terminate or amend the instrument or remove the corporate fiduciary;
(3) In the case of any trust not described in subparagraph (2), each beneficiary entitled or permitted, on the date the petition is filed, to receive income from the trust pursuant to the terms of the trust and each person who would be presumptively entitled to any portion of the principal of the trust if all income interests in the trust terminated on the date the petition was filed;
(4) In the case of the estate of any decedent, each person who would have a claim to succession to any property of the decedent under the testacy status upon which the fiduciary has been authorized to proceed;
(5) In the case of any conservatorship, each person whose assets are the subject of the conservatorship and each guardian of the person, if any guardian has been appointed and is a person other than a transferor affiliate;
(6) In the case of any person described in subparagraphs (1) to (5) that is a charitable institution or a charitable trust located within the State, the Attorney General; and
(7) In all cases, the superintendent.
D. The court may appoint one or more guardians ad litem to represent the interests of a person:
(1) Entitled to receive notice pursuant to paragraph C, who is a minor or who is known by the petitioner or any transferor affiliate to be subject to any other disability, including confinement in a penal institution, and for whom no guardian, other than a transferor affiliate, has been appointed;
(2) Of whose estate a transferor affiliate is conservator and for whom no guardian, other than a transferor affiliate, has been appointed; and
(3) Whose identity or whereabouts is unknown.
Title 18-A, section 1-403 governs in determining the propriety of any such appointments.
2. Notice. When any petition described in subsection 1 has been filed, the court in which the petition has been filed shall enter an order fixing a date and time for hearing on the petition, which may not be earlier than 35 days after the filing of the petition, and approving the form of notice to be given by the petitioner as provided in this section. At least 25 days prior to the hearing date, the petitioner shall cause a copy of the notice to be mailed by first class mail to each person identified in the petition as being entitled to receive notice under this section, at that person's last known address as set forth in the petition. In addition, the petitioner shall cause a copy of the notice to be published at least once a week for 3 successive weeks preceding the hearing date, the first publication to be at least 25 days prior to the hearing date. This publication must be in a newspaper of general circulation in each county in which the principal office of the affiliated bank specified in the petition is located.
3. Contents of notice. The notice mailed and published with respect to each petition must state the time and place of the hearing, the name of the subsidiary trust company that has filed the petition, the name of each transferor affiliate that has joined in the petition, that the petition requests that the petitioner be substituted for each of its transferor affiliates specified in the petition in every existing fiduciary capacity designated in the petition and, if appropriate, in every fiduciary capacity that may take effect after the petition has been filed and that any person to whom the notice is addressed may file an objection in accordance with subsection 4. All costs incurred in connection with the printing, mailing and publishing of the notice must be borne by the petitioner.
4. Objections. A person entitled to receive notice under this section may object to the substitution of the petitioner as fiduciary. Any such person wishing to object must file a written objection to the substitution, setting forth the reasons for the objection, with the court in which the petition has been filed and serve a copy upon the attorney for the petitioner at least 3 days before the date of hearing and must appear at the hearing in person or by an attorney.
5. Order. On the date fixed for the hearing on the petition, upon making a determination that notice has been properly given as required by this section, the court shall enter an order substituting the petitioner for each of its specified affiliated banks in every designated existing fiduciary capacity and, in the case of the first petition by the petitioner, in every fiduciary capacity that takes effect after the filing of the petition, except fiduciary capacities in any existing relationship with respect to which an objection has been filed in accordance with subsection 4. In the case of a fiduciary relationship when more than one person is entitled under this section to object to substitution of the petitioner, the properly made objection by fewer than all of the persons must be considered by the court, which shall in its sole discretion determine whether the substitution will be ordered. In the case of a fiduciary relationship in respect of which an objection has been properly made by any person who is entitled pursuant to this section to object to the substitution, the court may in its discretion determine that the resignation of the transferor affiliate will be accepted in respect of the fiduciary relationship. If the court determines that the resignation will be accepted, it shall enter an order substituting a different financial institution or nondepository trust company that has given its written consent to such a substitution prior to the entry of the order. In construing the language of any instrument that is the subject of a proceeding pursuant to this section, this section may not be considered to abrogate or affect the terms of the instrument creating the fiduciary relationship. Upon entry of the court's order, the petitioner, without further act, is substituted in every such fiduciary capacity.
6. Substitution. In respect of each fiduciary capacity, existing and future, as to which substitution has been ordered pursuant to this section, each designation of an affiliated bank as fiduciary in any capacity contained in any contract, will, order of any court or other document or instrument is deemed a designation of the petitioner substituted for the transferor affiliate pursuant to this section.
A. Any grant in any such contract, will, order or other document or instrument of any rights, powers, duties or authorities, whether or not discretionary, is deemed conferred upon the petitioner deemed designated as the fiduciary pursuant to this section.
B. Following the entry of an order pursuant to this section, the petitioner, with respect to each fiduciary relationship affected by the order that is an estate of a deceased person, guardianship or conservatorship, shall notify in writing the register of probate for the county in which the affected affiliated bank was appointed to the affected fiduciary relationship of the substitution of the petitioner for the affected affiliated bank in this fiduciary capacity. The notification must contain the name of the affected estate, guardianship or conservatorship, the date on which the order was entered and the name of the court that entered it and must state that the order was entered pursuant to this section.
7. Assets. Upon substitution pursuant to this section, each transferor affiliate shall deliver to the petitioner all assets held by the transferor affiliate as fiduciary, except assets held in capacities with respect to which there has been no substitution pursuant to this section and, upon substitution, the assets become the property of the petitioner without the necessity of any instrument of transfer or conveyance. Notwithstanding any provision in this Title, after a substitution of existing fiduciary capacities pursuant to this section, a transferor affiliate remains jointly liable with the petitioner that has been substituted for it in respect of each of the existing fiduciary relationships as to which the substitution has been ordered, but the transferor affiliate is entitled to a right of indemnification against the petitioner for all amounts paid by the transferee affiliate as a result of the joint liability.
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