Sec. J-1. 9-B MRSA c. 107, as enacted by PL 1997, c. 66, §6, is repealed.
Sec. J-2. 9-B MRSA Pt. 12 is enacted to read:
PART 12
SPECIALTY OR LIMITED PURPOSE FINANCIAL INSTITUTIONS
CHAPTER 121
NONDEPOSITORY TRUST COMPANIES
§1211. General purpose and authority
A nondepository trust company is a financial institution organized under the provisions of this Title whose activities are generally limited to trust or fiduciary matters. Unless otherwise indicated in this chapter or to the extent inconsistent with this chapter or with the general purpose of a nondepository trust company, a nondepository trust company has all the powers, duties and obligations of a financial institution under this Title.
§1212. Organization of nondepository trust companies
1. Organization. A nondepository trust company must be organized pursuant to chapter 31.
2. Organizational documents. The organizational documents of a nondepository trust company that are filed with the Secretary of State must contain the following statement: "This corporation, limited liability company, limited partnership or limited liability partnership is subject to the Maine Revised Statutes, Title 9-B, chapter 121 and does not have the power to solicit, receive or accept money or its equivalent on deposit or to lend money except for lending reasonably related to and deriving from its service as fiduciary or its conduct of trust business." This statement in the organizational documents of a nondepository trust company may not be amended.
3. Conversion. A nondepository trust company may convert to any other type of investor-owned financial institution pursuant to chapter 34.
A nondepository trust company shall maintain minimum capital in accordance with chapter 31 and section 412-A and any rules adopted under these provisions, except the superintendent may provide for a different amount for nondepository trust companies by order or rule.
§1214. Business of nondepository trust companies
1. General powers. A nondepository trust company has all of the powers of and is entitled to engage in the business of a financial institution, including, without limitation, powers with respect to fiduciary and trust functions and transactions except that a nondepository trust company does not have the power to solicit, receive or accept money or its equivalent on deposit as a regular business within the meaning of section 131, subsection 5 and does not have the power to lend money except in transactions reasonably related to and deriving from its service as fiduciary or its conduct of trust business.
2. Closely related activities. A nondepository trust company may conduct closely related activities, as defined in section 131, subsection 6-A and provided for in chapter 44, except that the superintendent may exclude those activities closely related to lending and taking deposits.
3. Cash deposits. A nondepository trust company may deposit cash, whether constituting principal or income, in any financial institution whether within or without this State, including any affiliated financial institution, if the account is held either in the name of the trust to which the cash belongs or in the name of the nondepository trust company and is composed entirely of cash belonging to trust accounts, the respective contributions of which are reflected in the books and records of the nondepository trust company.
4. Name. A nondepository trust company may not use as a part of the name or title under which its business is conducted or in designating its business the word or words "bank," "banker" or "banking" or the plural of or any abbreviation of those words. A nondepository trust company shall include as a part of its name the word "trust" unless otherwise approved by the superintendent for good cause shown.
5. Additional offices. Notwithstanding chapters 33 and 37, a nondepository trust company may establish additional offices without the superintendent's approval.
§1215. Holding companies of nondepository trust companies
If the holding company is not deemed to be a financial institution holding company under chapter 101 by virtue of controlling financial institutions other than nondepository trust companies or merchant banks, a holding company of a nondepository trust company is not subject to the provisions of chapter 101, except for section 1013, subsection 1 and the application requirements of section 1015 relevant to section 1013, subsection 1.
If the holding company is not deemed to be a financial institution holding company under chapter 101 by virtue of controlling financial institutions other than nondepository trust companies, the superintendent may examine the holding company to the extent necessary to determine the soundness and viability of the nondepository trust company.
The superintendent may prescribe rules governing the activities of nondepository trust companies and implementing this chapter. These rules must take into account the general business purpose and nondepository nature of nondepository trust companies. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.
CHAPTER 122
MERCHANT BANKS
§1221. General purpose and authority
A merchant bank is a financial institution organized under the provisions of this Title whose activities are generally limited to lending and investing as well as trust or fiduciary matters. Deposit activity is prohibited. Unless otherwise indicated in this chapter, a merchant bank has all the powers, duties and obligations of a financial institution under this Title. As one of the purposes of merchant banks is to provide needed capital or investments to businesses that may be impermissible or imprudent for depository financial institutions, its lending and investment activities are less restricted.
§1222. Organization of merchant banks
1. Organization. A merchant bank must be organized pursuant to chapter 31 and must be managed and governed pursuant to this Title and the applicable provisions of Title 13-A and Title 31, chapters 11, 13 and 15, depending upon the organizational form selected.
2. Organizational documents. The organizational documents of a merchant bank that are filed with the Secretary of State must contain the following statement: "This corporation, limited liability company, limited partnership or limited liability partnership is subject to the Maine Revised Statutes, Title 9-B, chapter 122 and does not have the power to solicit, receive or accept money or its equivalent on deposit." This statement in the organizational documents of a merchant bank may not be amended.
3. Conversion. A merchant bank may convert to any other type of investor-owned financial institution pursuant to chapter 34.
1. Initial capital. The minimum amount of initial capital for a merchant bank is $20,000,000, of which at least $10,000,000 must be common stock or equity interest. The balance may be composed of qualifying subordinated or similar debt.
2. Capital maintenance. A merchant bank shall maintain minimum capital in accordance with section 412-A or any rules adopted under that section. The superintendent may establish different standards for merchant banks than for other financial institutions organized under this Title. The minimum capital standards for a merchant bank may not be less than a level equal to 150% of the tier 1 risk-based capital and 150% of total risk-based capital established from time to time by the Board of Governors of the Federal Reserve System for a well-capitalized bank.
§1224. Business of merchant banks; power; limitations
1. Business of merchant banks. Except as provided in this chapter, a merchant bank has all the powers of and is entitled to engage in the business of a financial institution, including, without limitation, powers with respect to investments, loans, fiduciary and trust functions and transactions.
2. Deposit activities. A merchant bank may not solicit, receive or accept money or its equivalent on deposit as a regular business within the meaning of section 131, subsection 5 or engage in deposit-like activities as determined by the superintendent. A merchant bank may deposit cash, whether constituting principal or income, in any financial institution, whether within or without this State, if the account is held either in the name of the trust to which the cash belongs or in the name of the merchant bank and is composed entirely of cash belonging to trust accounts, the respective contributions of which are reflected in the books and records of the merchant bank.
3. Treasurer's checks. A merchant bank may issue drafts drawn on itself in the form of treasurer's or cashier's checks.
4. Name. Notwithstanding section 241, subsection 9, a merchant bank may use as a part of its name the word or words "bank," "banker" or "banking" or the plural of or any abbreviations of those words.
5. Offices. At least 30 days prior to the establishment of any office or branch office for the transaction of its business, a merchant bank shall notify the superintendent.
6. Provisions inapplicable. The following provisions of this Title are inapplicable to merchant banks: sections 223, 316-A, 439-A, 445, 446-A and 465-A and chapters 33, 37 and 42.
§1225. Insider loans and investments
The terms of any loans by a merchant bank to or investments by a merchant bank in any of the following must be disclosed to the governing body of the merchant bank:
1. Percentage of common stock. A person who owns 25% of more of the merchant bank's common stock or similar equity capital;
2. Member of governing body. A member of the governing body of the merchant bank;
3. Policy-making officer or manager. A policy-making officer or manager of the merchant bank; or
4. Percentage of voting shares owned by certain person or entity. A company 25% of the voting shares or other similar voting equity of which is owned by a person or entity listed in subsections 1 to 3.
§1226. Holding companies of merchant banks
If the holding company is not deemed to be a financial institution holding company under chapter 101 by virtue of controlling financial institutions other than a merchant bank or a nondepository trust company, a holding company of a merchant bank is not subject to the provisions of chapter 101, except for section 1013, subsection 1 and the application requirements of section 1015 relevant to section 1013, subsection 1.
If the holding company is not deemed to be a financial institution holding company under chapter 101 by virtue of controlling financial institutions other than a merchant bank, the superintendent may examine the holding company to the extent necessary to determine the soundness and viability of the merchant bank.
The superintendent may prescribe rules governing the activities of merchant banks and implementing this chapter. These rules must take into account the objective of merchant banks to provide needed capital to businesses and the nondepository nature of merchant banks. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.
CHAPTER 123
UNINSURED BANKS
§1231. General authority and purpose
A financial institution that does not accept retail deposits and for which insurance of deposits by the FDIC is not required may be organized pursuant to chapter 31. Unless otherwise indicated in this chapter, an uninsured bank has all the powers, rights, duties and obligations as a financial institution under this Title. An uninsured bank is not a nondepository trust company or a merchant bank.
§1232. Organization of uninsured banks
1. Organization. An uninsured bank must be organized pursuant to chapter 31.
2. Organizational documents. The organizational documents of an uninsured bank that are filed with the Secretary of State must contain the following statement: "This corporation, limited liability company, limited partnership or limited liability partnership is subject to the Maine Revised Statutes, Title 9-B, chapter 123 and does not have the power to solicit, receive or accept retail deposits." This statement in the organizational documents of an uninsured bank may not be amended.
3. Conversion. An uninsured bank may convert to any other type of investor-owned financial institution pursuant to chapter 34.
An uninsured bank shall maintain capital in accordance with section 412-A or rules adopted under section 412-A, except that the superintendent may establish different capital requirements for uninsured banks than those required for insured financial institutions.
§1234. Cash reserves on deposits and accounts
An uninsured bank shall maintain reserves in accordance with section 422-A. The superintendent may establish by rule or order additional reserve requirements for uninsured banks.
An uninsured bank's lending limit is governed by section 439-A or rules adopted under section 439-A, except that loans or extensions of credit to a person are limited to 15% of total capital.
An uninsured bank may not engage in retail deposit activities. The superintendent shall define deposit activities that do not constitute retail deposit activities by rule, taking account of the size or nature of depositors and deposit accounts.
§1237. Disclosure of uninsured status
1. Sign that deposits not insured. An uninsured bank shall display conspicuously at each window or place where deposits are usually accepted a sign stating that deposits are not insured by the FDIC.
2. Statement that deposits not insured. An uninsured bank shall either include in boldface conspicuous type on each signature card, passbook and instrument evidencing a deposit the following statement: "This deposit is not insured by the FDIC" or require each depositor to execute a statement that acknowledges that the initial deposit and all future deposits at the bank are not insured by the FDIC. The bank shall retain this acknowledgment as long as the depositor maintains any deposit with the bank.
3. Statement on deposit-related advertising that deposits not insured. An uninsured bank shall include on all its deposit-related advertising a statement that deposits are not insured by the FDIC.
The superintendent may prescribe rules governing the activities of uninsured banks and implementing this chapter. These rules must take into account the uninsured status of these banks. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.
| Revisor of Statutes Homepage | Subject Index | Search | Laws of Maine | Maine Legislature |
