GENERAL ASSEMBLY OF NORTH CAROLINA
1989 SESSION
CHAPTER 76
AN ACT TO MAKE OMNIBUS CHANGES RELATING TO SAVINGS AND LOAN ASSOCIATIONS.
The General Assembly of North Carolina enacts:
Section 1. G.S. 54B-4 reads as rewritten:
"(b) As used in this Chapter, unless the context otherwise requires, the term:
(1)
'Administrator' means the Administrator of the Savings and Loan Institutions
Division.
(2) 'Aggregate withdrawal value of withdrawable accounts' means the total value of all withdrawable accounts held by an association.
(3) 'Application' means the completed package of the application to organize a State association, establish a branch office or conversion of structure of a savings and loan association which the Administrator considers in making his recommendation.
(3a) 'Affiliate' means a person or corporation that controls, is controlled by, or is under common control with an association.
(4) 'Associate' when used to indicate a relationship with any person, means (i) any corporation or organization (other than the applicant or a majority-owned subsidiary of the applicant) of which such person is an officer or partner or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of equity securities, (ii) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity, and (iii) any relative or spouse who lives in the same house as that person, or any relative of that person's spouse who lives in the same house as that person, or who is a director or officer of the applicant or any of its parents or subsidiaries.
(5) 'Association' includes a State association or a federal association unless limited by use of the words 'State' or 'federal.'
(6) 'Borrowers' means those who borrow funds from or in any other way become obligated on a loan to an association.
(7) 'Branch office' means an office of an association other than its principal office which renders savings and loan services.
(8) 'Capital stock' means securities which represent ownership of a stock association.
(9) 'Certificate of approval' means a document signed by the Administrator informing the North Carolina Secretary of State that the Commission has approved the certificate of incorporation of a proposed association.
(10) Repealed by Session Laws 1985, c. 659, s. 1, effective July 9, 1985.
(11) 'Certificate of incorporation or charter' means the document which represents the corporate existence of a State association.
(12) 'Certified copy' means a copy of an original document or paper which has been signed by the person or persons who certify such document to be an exact copy of the original.
(13) 'This Chapter' means Chapter 54B of the North Carolina General Statutes.
(14)
'Commission' means the North Carolina Savings and Loan Institutions Commission
of the Department of Commerce.
(15) 'Conflict of interest' means a matter before the board of directors in which one or more of the directors, officers or employees has a direct or indirect financial interest in its outcome.
(16) 'Conformed copies' means photocopies or carbon copies or other mechanical reproductions of an original document or paper.
(17) 'Court of competent jurisdiction' means a court in North Carolina which is qualified to hear the case at hand.
(18) 'Disinterested directors' means those directors who have absolutely no direct or indirect financial interest in the matter before them.
(19) 'Dividends on stock' means the earnings of an association paid out to holders of capital stock in a stock association.
(20) 'Dividends on withdrawable accounts' means the consideration paid by an association to a holder of a withdrawable account for the use of his money.
(21)
'Division' means the Savings and Loan Institutions Division of
the North Carolina Department of Commerce.
(22) 'Entrance fee per withdrawable account' means the amount to be paid by each person, firm or corporation when he or it pledges to a proposed mutual association to deposit funds in a withdrawable account.
(23) 'Examination and investigation' means a supervisory inspection of an association or proposed association which may include inspection of every relevant piece of information including subsidiary or affiliated businesses.
(24) 'Federal association' means a corporation or association organized and operated under the provisions of federal law and regulation to conduct a savings and loan business.
(25) 'Financial institution' means a person, firm or corporation engaged in the business of receiving, soliciting or accepting money or its equivalent on deposit and/or lending money or its equivalent.
(26) Repealed by Session Laws 1985, c. 659, s. 1, effective July 9, 1985.
(27) 'General reserve' means appropriated or restricted funds in the form of cash or investments to be used solely for the purpose of absorbing losses.
(28) 'Guaranty association' means a mutual deposit guaranty association which is a corporation organized under this Chapter or its predecessor and operated under the provisions of Article 12 of this Chapter.
(29) 'Immediate family' means one's spouse, father, mother, children, brothers, sisters, and grandchildren; and the father, mother, brothers, and sisters of one's spouse; and the spouse of one's child, brother or sister.
(30) 'Initial pledges for withdrawable accounts' means those pledges of funds by persons who promise to a proposed mutual association to deposit such amount if and when such proposed association becomes established.
(31) 'Insurance of withdrawable accounts' means insurance on an association's withdrawable accounts when the beneficiary is the holder of such insured account.
(32) 'Liquidity fund' means that portion of the assets of an association which is required to be held in readily marketable form.
(32a) 'Interim association' means an association formed to facilitate the acquisition of one hundred percent (100%) of the voting shares of an existing stock association by a newly-formed association or an existing savings and loan holding company or to facilitate any other transaction the Administrator may approve.
(33) 'Members' means withdrawable account holders and borrowers in a State mutual association.
(34) 'Minimum amount of consideration' means the amount of money a stock association shall be required to have received on the sale of its stock, before it shall commence business.
(35) 'Minimum amount on deposit in withdrawable accounts' means the amount of money which a mutual association must have on hand prior to its commencement of business.
(36) 'Mutual association' means all mutual savings and loan associations owned by members of the association, and organized under the provisions of this Chapter or its predecessor for the primary purpose of promoting thrift and home financing.
(37) 'Net withdrawal value of withdrawable accounts' means the aggregate of the withdrawal value of an association's withdrawable accounts less the amount of any pledged withdrawable account which serves as security for a loan.
(38) 'Net worth' means an association's total assets less total liabilities.
(39) 'Original incorporators' means the organizers of a State association responsible for the business of a proposed association from the filing of the application to the Commission's final decision on such application.
(40) 'Plan of conversion' means a detailed outline of the procedure of the conversion of an association from one to another regulatory authority or from one to another form of ownership.
(41) 'Principal office' means the office which houses the headquarters of an association.
(42) 'Proposed association' means an entity in organizational procedures prior to the Commission's final decision on its charter application.
(43) 'Registered agent' means the person named in the certificate of incorporation upon whom service of legal process shall be deemed binding upon the association.
(44) 'Rules and regulations' means those regulatory procedures and guidelines issued by the Administrator and approved by the Commission.
(44a) 'Savings bank' means an association which has exercised the authority granted in G.S. 54B-26 and adopted a name which includes the words 'savings bank.'
(45) 'Service corporation' means a corporation operating under the provision of Article 8 of this Chapter which engages in activities determined by the Administrator by rules and regulations to be incidental to the conduct of a savings and loan business as provided in this Chapter or activities which further or facilitate the corporate purposes of an association, or which furnishes services to an association or subsidiaries of an association, the voting stock of which is owned directly or indirectly by one or more associations.
(46) 'Specific reserve account' means an account held by an association as a loss reserve for coverage on specific loans and investments.
(47) 'This State' means the State of North Carolina.
(48) 'State association' means a corporation or association organized under this Chapter or its predecessor and operated under the provisions of this Chapter to conduct the savings and loan business; or a corporation organized under the provisions of the predecessors to this Chapter and operated under the provisions of this Chapter; or a corporation organized under the provisions of federal law and so converted as to be operated under the provisions of this Chapter.
(49) 'Stock association' means any corporation or company owned by holders of capital stock and organized under the provisions of this Chapter for the primary purpose of promoting thrift and home financing.
(50) 'Subscriptions' means the promise to purchase capital stock in a stock association and payment of a portion of the selling price.
(51) 'Total assets' means the aggregate amount of assets of any and every kind held by an association.
(52) 'Voluntary dissolution' means the dissolution and liquidation of an association initiated by its ownership.
(53) 'Withdrawable accounts' means accounts in which a customer or member places funds with an association which may be withdrawn by the account holder.
(54)
'Withdrawable application' means the request in writing by a withdrawable
account holder to withdraw part or all of his balance."
Sec. 2. G.S. 54B-9 reads as rewritten:
"§ 54B-9. Application to organize a savings and loan association.
(a) It shall be lawful
for any 10 five or more natural persons (hereinafter referred to
as the 'incorporators'), who are domiciled in this State, to organize and
establish a savings and loan association in order to promote thrift and home
financing, subject to approval as hereinafter provided in this Chapter. The
incorporators shall file with the Administrator a preliminary application to
organize a State association, in the form to be prescribed by the
Administrator, together with the proper nonrefundable application fee.
(b) The application to organize a State association shall be received by the Administrator not less than 60 days prior to the scheduled consideration of the application by the Commission, and it shall contain:
(1) The original of the
certificate of incorporation, which shall be signed by the original
incorporators, or a majority of them, but not less than 10, five, and
shall be properly acknowledged by a person duly authorized by this State to
take proof or acknowledgment of deeds; and two conformed copies;
(2) The names and addresses of the incorporators; and the names and addresses of the initial members of the board of directors;
(3) Statements of the anticipated receipts, expenditures, earnings and financial condition of the association for its first two years of operation, or such longer period as the Administrator may require;
(4) A showing satisfactory to the Commission that:
a. The public convenience and advantage will be served by the establishment of the proposed association;
b. There is a reasonable demand and necessity in the community which will be served by the establishment of the proposed association;
c. The proposed association will have a reasonable probability of sustaining profitable and beneficial operations within a reasonable time in the community in which the proposed association intends to locate;
d. The proposed association, if established, will promote healthy and effective competition in the community in the delivery to the public of savings and loan services;
(5) The proposed bylaws;
(6) Statements, exhibits, maps and other data which may be prescribed or requested by the Administrator, which data shall be sufficiently detailed and comprehensive so as to enable the administrator to pass upon the criteria set forth in this Article.
(c) The application shall
be signed by the original incorporators or a majority of them but not less than
10, five, and shall be properly acknowledged by a person duly
authorized by this State to take proof and acknowledgement of deeds."
Sec. 3. G.S. 54B-12 reads as rewritten:
"§ 54B-12. Criteria to be met before the Administrator may recommend approval of an application.
(a) The Administrator may recommend approval of an application to form a mutual association only when all of the following criteria are met:
(1) The proposed association has an operational expense fund, from which to pay organizational and incorporation expenses, in an amount determined by the Administrator to be sufficient for the safe and proper operation of the association, but in no event less than seventy-five thousand dollars ($75,000). The moneys remaining in such expense fund shall be held by the association for at least one year from its date of licensing. No portion of such fund shall be released to an incorporator or director who contributed to it, nor to any other contributor, nor to any other person and no dividends shall be accrued or paid on such funds without the prior approval of the administrator.
(2) The proposed
association has pledges for withdrawable accounts in an amount determined by
the Administrator to be sufficient for the safe and proper operation of the
association, but in no event less than three hundred fifty thousand dollars
($350,000). four million dollars ($4,000,000).
(3) All entrance fees for withdrawable accounts of the proposed association have been made with legal tender of the United States.
(4) All initial pledges for withdrawable accounts of the proposed association are made by residents of North Carolina.
(5) The name of the proposed association will not mislead the public and is not the same as an existing association or so similar to the name of an existing association as to mislead the public.
(6) The character, general fitness and responsibility of the incorporators and the initial board of directors of the proposed association who shall be residents of North Carolina are such as to command the confidence of the community in which the proposed association intends to locate.
(7) There is a reasonable demand and necessity in the community which will be served by the establishment of the proposed association.
(8) The public convenience and advantage will be served by the establishment of the proposed association.
(9) The proposed association will have a reasonable probability of sustaining profitable and beneficial operations in the community.
(10) The proposed association, if established, will promote healthy and effective competition in the community in the delivery to the public of savings and loan services.
(b) The Administrator may recommend approval of an application to form a stock association only when all of the following criteria are met:
(1) The proposed
association has prepared a plan to solicit subscriptions for capital
stock in an amount determined by the Administrator to be sufficient for the
safe and proper operation of the association, but in no event less than one
million five hundred thousand dollars ($1,500,000). three million
dollars ($3,000,000).
(2) The proposed
association has certified that it shall set aside from the amount of
subscriptions for capital stock required by subdivision (1) of this subsection,
as a permanent capital reserve, an amount of funds determined by the
Administrator to be sufficient for the safe and proper operation of the
association, but in no event less than five hundred thousand dollars
($500,000).
(3) All subscriptions for capital stock of the proposed association have been purchased with legal tender of the United States.
(4) to (7). Repealed by Session Laws 1983, c. 144, s. 5,effective April 6, 1983.
(8) The name of the proposed association will not mislead the public and is not the same as an existing association or so similar to the name of an existing association as to mislead the public; and contains the wording 'corporation,' 'incorporated,' 'limited,' or 'company,' an abbreviation of one of such words or other words sufficient to distinguish stock associations from mutual associations.
(9) The character, general fitness, and trustworthiness of the incorporators, initial board of directors, and initial stockholders of the proposed association are such as to command the confidence of the community in which the proposed association intends to locate.
(10) There is a reasonable demand and necessity in the community which will be served by the establishment of the proposed association.
(11) The public convenience and advantage will be served by the establishment of the proposed association.
(12) The proposed association will have a reasonable probability of sustaining profitable and beneficial operations in the community.
(13) The proposed association, if established, will promote healthy and effective competition in the community in the delivery to the public of savings and loan services.
(c) The minimum amount of pledges for withdrawable accounts or subscriptions for capital stock may be adjusted in the discretion of the Administrator if he determines that a greater requirement is necessary or that a smaller requirement will provide a sufficient capital base. Such a finding and recommendation to the Commission shall be based upon due consideration of (i) the population of the proposed trade area, (ii) the total deposits of the depository financial institutions operating in the proposed trade area, (iii) the economic conditions of and projections for the proposed trade area, (iv) the business experience and reputation of the proposed management, (v) the business experience and reputation of the proposed incorporators and directors, and (vi) the projected deposit growth, capitalization, and profitability of the proposed association."
Sec. 4. G.S. 54B-13 reads as rewritten:
"§ 54B-13.
Savings and Loan Institutions Commission to review findings and
recommendations of Administrator.
(a) If the Administrator does not have the completed application within 120 days of the filing of the preliminary application, the application shall be returned to the applicants.
(b) When the
Administrator has completed his examination and investigation of the facts
relevant to the establishment of the proposed association, he shall present his
findings and recommendations to the Commission at a public hearing. The Savings
and Loan Institutions Commission must approve or reject an
application within 180 days of the submission of the preliminary application.
(c) Not less than 60 45
days prior to the public hearing held for the consideration of the
application to establish a savings and loan association, the incorporators
shall cause to be published a notice in a newspaper of general circulation in
the area to be served by the proposed association. Such notice shall contain:
(1) A statement that the application has been filed with the Administrator;
(2) The name of the community where the principal office of the proposed association intends to locate;
(3) A statement that a public hearing shall be held to consider the application; and
(4) A statement that any interested or affected party may file a written statement either favoring or protesting the creation of the proposed association. Such statement must be filed with the Administrator within 30 days of the date of publication.
(d) The Commission, at the public hearing, shall consider the findings and recommendation of the Administrator and shall hear such oral testimony as he may wish to give or be called upon to give, and shall also receive information and hear testimony from the incorporators of the proposed association and from any and all other interested or affected parties. The Commission shall hear only testimony and receive only information which is relevant to the consideration of the application and the operation of the proposed association."
Sec. 5. G.S. 54B-25 reads as rewritten:
"§ 54B-25. Branch offices closed.
The board of a State association may discontinue the operation of a branch office upon giving at least 30 days' prior written notice to the Administrator, the notice to include the date upon which the branch office shall be closed."
Sec. 6. G.S. 54B-30(3) reads as rewritten:
"(3) At the meeting of the
members or stockholders of such association, such members or stockholders may
by affirmative vote of a majority of votes or shares present, in person or by
proxy, resolve to convert said association to a federal savings and loan
association. A copy of the minutes of the meeting of the members or
stockholders certified by an appropriate officer of the association shall be filed
in the office of the Administrator within 10 days after such meeting. Administrator.
The said certified copy when so filed shall be prima facie evidence of the
holding and the action of the meeting."
Sec. 7. G.S. 54B-31(3) reads as rewritten:
"(3) At the meeting of the
members or stockholders of such association, such members or stockholders may
by affirmative vote of a majority of votes or shares present, in person or by
proxy, resolve to convert said association to a State association. A copy of the
minutes of the meeting of the members or stockholders, certified by an
appropriate officer of the association, shall be filed with the Administrator within
10 days after the meeting, accompanied by a conversion fee. The certified
copy when so filed shall be prima facie evidence of the holding of and the
action taken at the meeting."
Sec. 8. G.S. 54B-35(4) reads as rewritten:
"(4) At separate meetings
of the members or stockholders of the respective associations, the members or
stockholders may adopt, by an affirmative vote of a majority of the votes or
shares present, in person or by proxy, a resolution to merge into a single
association upon the terms of the merger agreement as shall have been agreed
upon by the directors of the respective associations and as approved by the
Administrator. Upon the adoption of the resolution, a copy of the minutes of
the proceedings of the meetings of the members or stockholders of the
respective associations, certified by the president or vice-president and secretary
or assistant secretary of the merging associations, shall be filed in the
office of the Administrator, within 10 days after such meetings. Administrator.
Within 15 days after the receipt of a certified copy of the minutes of such
meetings the Administrator shall either approve or disapprove the proceedings
for compliance with this section. If the proceedings are approved by him, he
shall issue a certificate of his approval of the merger and send it to each of
the associations. The certificate shall be filed and recorded in the office of
the Secretary of State. When the certificate is so filed, the merger agreement
shall take effect according to its terms and shall be binding upon all the
members or stockholders of the associations merging, and it shall be
deemed to be the act of merger of such constituent savings and loan
associations under the laws of this State, and the certificate or certified
copy thereof shall be evidence of the agreement and act of merger of the
savings and loan associations and the observance and performance of all acts
and conditions necessary to have been observed and performed precedent to such
merger. Within 60 days after its receipt from the Secretary of State, the
certified copy of the certificate shall be filed with the register of deeds of
the county or counties in which the respective associations so merged have
recorded their original certificates of incorporation. Failure to so file shall
only subject the association to a penalty of one hundred dollars ($100.00) to
be collected by the Secretary of State. The only fees that shall be collected
in connection with the merger of the associations shall be filing and recording
fees. If the Administrator disapproves the proceedings, he shall mark the
certified copies of the meetings in his office as disapproved and notify the
associations to that effect. Such disapproval may be appealed by the
association to the Commission."
Sec. 9. G.S. 54B-43 reads as rewritten:
"§ 54B-43. Stock dividends.
No dividend on stock shall be paid unless the association has the prior written approval of the Administrator."
Sec. 10. G.S. 54B-210 reads as rewritten:
"§ 54B-210. Components of liquidity fund.
(a) Every State
association shall at all times have on hand and unpledged, cash, investments
in obligations of the United States government, or the government of the State
of North Carolina, or stock in the Federal Home Loan Bank, or deposits in any
mutual deposit guaranty association organized or operated pursuant to Article
12 of this Chapter, or investments in the accounts of other associations, or
bonds issued by the Federal Home Loan Bank, or Government National Mortgage
Association pass-through certificates, or Federal Home Loan Mortgage
Corporation pass-through certificates, or funds on deposit in a federal reserve
bank or in other bank or banks as may have been approved by a majority of the
entire board of directors, in an amount set by the Commission equal to at least
four percent (4%) of the net withdrawal value of the association's withdrawable
account, or two hundred fifty thousand dollars ($250,000), whichever is
greater, as the liquidity fund and held to assure the liquidity of such
association. Such investments and funds on deposit shall be readily marketable
and shall not exceed a term of five years. establish and maintain a
regulatory capital account in an amount and in such funds and investments that
comply with the requirements of its federal insurer of withdrawable accounts.
(b) In addition to
those investments set forth in subsection (a), a State association's liquidity
fund may also include debt securities which are hedged, subject to options, or
redeemable, in the manner allowed to members of the Federal Home Loan Bank
Board, by the board's regulations, as amended from time to time; provided that,
limitations upon State associations as to amounts of investments, investments
in, or hedged by, a single source, or other limitations upon the investment
authority of State associations, shall be as provided by rules promulgated by
the Administrator, and not as provided by rules and regulations of the Federal
Home Loan Bank Board. The failure of a State association to maintain the
required level and type of regulatory capital may be grounds for supervisory
action by the Administrator.
(c) The Administrator may adopt rules to implement this section."
Sec. 11. G.S. 54B-216 reads as rewritten:
"§ 54B-216. General reserve.
(a) Every State
association shall establish and maintain a general reserve for the
sole purpose of covering losses. The general reserve shall be established and
maintained separately from any valuation allowances and specific
loss reserves established and maintained at the election of the association
or pursuant to rules and regulations prescribed by the Commission. in
compliance with the requirements of its federal insurer of withdrawable
accounts.
(b) The general
reserve shall be maintained at a level set by the Commission based on assets.
In setting the level for the general reserve, the Commission shall evaluate the
risk attributable to various types of assets and shall establish percentages
for each type of asset based on its level of risk. The failure of a
State association to maintain the required level of general valuation
allowances or specific loss reserves may be grounds for supervisory action by
the Administrator.
(c) In the case of
newly chartered stock associations, the permanent capital reserve required by
G.S. 54B-12(b)(2) shall be deemed a constituent part of and not supplementary
to the general reserve required by this section. Therefore, a minimum of five
hundred thousand dollars ($500,000) shall be the required level of the general
reserve of a stock association until a greater level is required pursuant to
this section and rules and regulations promulgated thereto. The
Administrator may adopt rules to implement this section.
(d) Notwithstanding
the provision of this section, any State association which has insurance of withdrawable
accounts with the Federal Savings and Loan Insurance Corporation and which
meets the statutory reserve requirement of the Federal Savings and Loan
Insurance Corporation need not comply with the general reserve requirement of
this section.
(e) The failure
of a State association to maintain the required level of general reserve set by
the Commission or the statutory reserve requirement of the Federal Savings and
Loan Insurance Corporation may be grounds for supervisory action by the
Administrator.
(f) The
Commission shall adopt rules and regulations for the implementation of this
section."
Sec. 12. G.S. 54B-261 is amended by adding a new subsection to read:
"(a2) Notwithstanding any other provision of law, a mutual association may reorganize its ownership to provide for ownership by a savings and loan holding company upon adoption of a plan of reorganization by a favorable vote of not less than two-thirds of the members of the board of directors of the association and approval of the plan of reorganization by a majority of the voting members of the association. The plan of reorganization shall provide that (i) the resulting ownership shall be vested in a North Carolina corporation, (ii) the resulting ownership of one or more subsidiary associations shall be evidenced by stock shares, (iii) the substantial portion of the assets and all of the insured deposits and part or all of the other liabilities shall be transferred to one or more subsidiary associations, (iv) the reorganization shall not be subject to State or federal income taxation, and (v) the plan of reorganization is fair and equitable to all members of the association. The Administrator shall promulgate rules regarding the formation of the subsidiary associations and the holding company, including the rights of members, levels of investment in the holding company subsidiaries, and stock sales."
Sec. 13. G.S. 7A-112(a) reads as rewritten:
"(a) The clerk of the superior court may in his discretion invest moneys secured by virtue or color of his office or as receiver in any of the following securities:
(1) Obligations of the United States or obligations fully guaranteed both as to principal and interest by the United States;
(2) Obligations of the State of North Carolina;
(3) Obligations of North Carolina cities or counties approved by the Local Government Commission; and
(4) Shares of any building
and loan association organized under the laws of this State, or of any federal
savings and loan association having its principal office in this State, and
certificates of deposit for time deposits or savings accounts in any bank or
trust company authorized to do business in North Carolina, to the extent in
each instance that such shares or deposits are insured by the State or federal
government or any agency thereof or by any mutual deposit guaranty association
authorized by the Administrator of the Savings and Loan Institutions Division
of North Carolina to do business in North Carolina pursuant to Article 7A of
Chapter 54 of the General Statutes. If the clerk desires to deposit in a bank,
saving and loan, or trust company funds entrusted to him by virtue or color of
his office, beyond the extent that such deposits are insured by the State or
federal government or an agency thereof or by any mutual deposit guaranty
association authorized by the Administrator of the Savings and Loan Institutions
Division of North Carolina to do business in North Carolina pursuant to
Article 7A of Chapter 54 of the General Statutes, the clerk shall require such
depository to furnish a corporate surety bond or bonds of the United States
government or of the State of North Carolina, or of counties and municipalities
of North Carolina whose bonds have been approved by the Local Government
Commission."
Sec. 14. G.S. 54-48 reads as rewritten:
"§ 54-48. Reserve associations.
Associations to be known as 'reserve land and loan
associations' may be chartered and licensed as provided in this Article, when
they are organized and the stock therein is held by local land and loan
associations, and shall have such powers, rights, and privileges as are
accorded to other domestic associations, and they may conform to such laws,
rules, and regulations as may be prescribed by the laws of the United States,
or of this State, to enable them to receive moneys, bonds, or securities to be
used in loans and to secure the same. Such reserve associations shall be under
the supervision of the Administrator of the Savings and Loan Institutions
Division as are building and loan associations."
Sec. 15. G.S. 54B-48.2(2) reads as rewritten:
"(2) 'Administrator' means
the Administrator of the Savings and Loan Institutions Division."
Sec. 16. G.S. 54B-52 reads as rewritten:
"§ 54B-52.
Administrator of Savings and Loan Institutions Division.
The Administrator of the Savings and Loan Institutions
Division of the State is hereby empowered and directed to perform all the
duties and exercise all the powers as to savings and loan associations
organized or operated under this Chapter, unless herein otherwise
provided."
Sec. 17. G.S. 54B-53 reads as rewritten:
"§ 54B-53.
Savings and Loan Institutions Commission.
(a) The Savings and
Loan Institutions Commission, which has heretofore been created,
shall continue to exist and the seven members of the Savings and Loan Institutions
Commission who have heretofore been appointed by the Governor shall
continue to serve their full terms and their successors shall be appointed by
the Governor as required by this section. The Governor shall on July 1, 1981,
appoint three persons to the Commission for four-year terms. On July 1, 1983,
he shall appoint two persons to the Commission for three-year terms, and two
persons for four-year terms. All appointments to the Commission thereafter
shall be for four-year terms. Any vacancy on the Commission shall be filled by
the Governor for the unexpired term. A newly appointed commissioner shall
assume office at the first regular or special meeting subsequent to his
appointment.
(b) The members of the Commission shall elect one of their number to serve as chairman of the Commission for such term as set forth in rules adopted by the Commission. A vice-chairman and other officers may be elected as specified by the Commission.
(c) The term of a commissioner shall be four years, or until his successor is appointed and qualified.
(d) At least two members of the Commission shall be persons who are currently serving as managing officers of State associations. Four members of the Commission shall be appointed as representatives of the borrowing public and shall not be employees of or directors of any financial institution or have an interest in any financial institution other than as a result of being a depositor or borrower.
(e) Meetings of the Commission shall be held regularly as provided in rules adopted by the Commission but no less than once each calendar quarter. Special meetings shall be held at any time upon the call of the chairman, or upon the call of any three commissioners. The Administrator shall call meetings when consideration by the Commission is required by law for contemplated action of the Administrator. Members of the Commission shall be reimbursed as prescribed by law for expenses incurred in the performance of their duties under this section.
(f) The
relationship between the Secretary of Commerce and the Savings and Loan Institutions
Commission shall be as defined for a Type II transfer under Article Chapter
143A of the General Statutes.
(g) The Savings and
Loan Institutions Commission is hereby vested with full power and
authority to review, approve, disapprove, or modify any action taken by the
Administrator in the exercise of all powers, duties and functions vested in or
exercised by the Administrator under the savings and loan laws of this
State."
Sec. 18. G.S. 54B-54 reads as rewritten:
"§ 54B-54.
Deputy administrator of Savings and Loan Institutions Division.
(a) There shall be a
deputy administrator of the Savings and Loan Institutions Division
who, in the event of the absence, death, resignation, disability or
disqualification of the Administrator, or in case the office of Administrator
shall for any reason become vacant, shall have and exercise all the powers and
duties vested by law in the Administrator.
(b) The deputy administrator is authorized and empowered at any and all times to perform such duties and exercise such powers of the Administrator as the Administrator may direct."
Sec. 19. G.S. 54B-55(b) reads as rewritten:
"(b) Without limiting the generality of the foregoing paragraph, rules, instructions, and regulations may be promulgated with respect to:
(1) Reserve requirements;
(2) Stock ownership and dividends;
(3) Stock transfers;
(4) Incorporators, stockholders, directors, officers and employees of an association;
(5) Bylaws;
(6) The Savings and
Loan Institutions Commission;
(7) The structure of the office of the Administrator;
(8) The operation of associations;
(9) Withdrawable accounts, bonus plans, and contracts for savings programs;
(10) Loans and loan expenses;
(11) Investments;
(12) Forms and definitions;
(13) Types of financial records to be maintained by associations;
(14) Retention periods of various financial records;
(15) Internal control procedures of associations;
(16) Conduct and management of associations;
(17) Chartering and branching;
(18) Liquidations;
(19) Mergers;
(20) Conversions;
(21) Reports which may be required by the Administrator;
(22) Conflicts of interest;
(23) Collection of State savings and loan taxes;
(24) Service corporations; and
(25) Savings and loan holding companies."
Sec. 20. G.S. 54B-62 reads as rewritten:
"§ 54B-62.
Relationship of savings and loan associations with the Savings and Loan Institutions
Division.
(a) Except as provided by subsection (b) of this section, a savings and loan association or any director, officer, employee, or representative thereof shall not grant or give to the Administrator or to any employee of the Administrator's office, or to their spouses, any loan or gratuity, directly or indirectly.
(b) Neither the
Administrator nor any person on the staff of the Savings and Loan Institutions
Division shall:
(1) Hold an office or position in any State association or exercise any right to vote on any State association matter by reason of being a member of the association;
(2) Be interested, directly or indirectly in any savings and loan association organized under the laws of this State; or
(3) Undertake any indebtedness, as a borrower directly or indirectly or endorser, surety or guarantor, or sell or otherwise dispose of any loan or investment to any savings and loan association organized under the laws of this State.
(c) Notwithstanding subsection (b) of this section, the Administrator or any other person employed in or by his office may be a withdrawable account holder and receive earnings on such account.
(d) If the Administrator or other person has any prohibited right or interest in a savings and loan association, either directly or indirectly, at the time of his appointment or employment, he shall dispose of it within 60 days after the date of his appointment, or employment. If the Administrator or other such person is indebted as borrower directly or indirectly, or is an endorser, surety or guarantor on a note, at the time of his appointment or employment, he may continue in such capacity until such loan is paid off."
Sec. 21. G.S. 54B-63(d) reads as rewritten:
"(d) Nothing in this
section shall prevent the exchange of information relating to associations and
the business thereof with the representatives of the agencies of this State,
other states, or of the United States, or with reserve or insuring agencies for
associations. The private business and affairs of an individual or company
shall not be disclosed by any person employed by the Savings and Loan Institutions
Division, any member of the Commission, or by any person with whom
information is exchanged under the authority of this subsection."
Sec. 22. G.S. 54B-66(b) reads as rewritten:
"(b) In addition to any of the other penalties or remedies provided by this Article, the following shall be deemed to be misdemeanors and shall be punishable as provided in Chapter 14 of the North Carolina General Statutes:
(1) The willful or knowing
violation of the provisions of this Article by any employee of the Savings and
Loan Institutions Division.
(2) The willful or knowing violation of a cease and desist order which has become final in that no further administrative or judicial appeal is available."
Sec. 23. G.S. 54B-246(a) reads as rewritten:
"(a) In addition to any
and all other powers, duties and functions vested in the Secretary of Commerce
under the provisions of this Article, and for the protection of member
institutions and the general public, the Secretary of Commerce shall have
general control and supervision over all mutual deposit guaranty associations
doing business in this State. Mutual deposit guaranty associations shall be
subject to the control and supervision of the Secretary of Commerce as to their
conduct, organization, management, business practices, reserve requirements and
their financial and fiscal matters. The grant of general control and
supervision over mutual deposit guaranty associations to the Secretary of
Commerce by this Article shall in no way be deemed to affect the existing
powers, duties and responsibilities of the Credit Union Commission, the
Commissioner of Banks, the State Banking Commission or the North Carolina
Savings and Loan Institutions Commission except for the removal
herein of general control and supervision over mutual deposit guaranty
associations from the Administrator of the Savings and Loan Institutions
Division to the Secretary of Commerce."
Sec. 24. G.S. 105-228.24A reads as rewritten:
"§ 105-228.24A. Income tax credit for supervisory fees.
Every savings and loan association is allowed a credit
against the income tax imposed on it under Article 4 of this Chapter for a
taxable year equal to the amount of supervisory fees, paid by the association
during the taxable year, that were assessed by the Administrator of the Savings
and Loan Institutions Division of the Department of Commerce for
the State fiscal year beginning on or during that taxable year. This credit may
not exceed the amount of income tax payable by the association for the taxable
year for which the credit is claimed, reduced by the sum of all income tax
credits allowed against the tax, except tax payments made by or on behalf of
the association. The supervisory fees shall not be an allowable deduction in
determining taxable income for any association claiming the credit allowed
under this section."
Sec. 25. G.S. 143B-431 reads as rewritten:
"§ 143B-431. Department of Commerce; functions.
The functions of the Department of Commerce, except as otherwise expressly provided by Article 1 of this Chapter or by the Constitution of North Carolina, shall include:
(1) All of the executive functions of the State in relation to economic development including by way of enumeration and not of limitation, the expansion and recruitment of environmentally sound industry, labor force development, the promotion and growth of the travel and tourism industries, the development of our State's ports, energy resource management and energy policy development;
(2) All functions, powers, duties and obligations heretofore vested in any agency enumerated in Article 15 of Chapter 143A, to wit:
a. The State Board of Alcoholic Control,
b. The North Carolina Utilities Commission,
c. The Employment Security Commission,
d. The North Carolina Industrial Commission,
e. State Banking Commission and the Commissioner of Banks,
f. Savings and Loan Association Division,
g. The State
Savings and Loan Institutions Commission,
h. Credit Union Commission,
i. The North Carolina Milk Commission,
j. The North Carolina Mutual Burial Association Commission,
k. The North Carolina Rural Electrification Authority,
l. The North Carolina State Ports Authority,
all of which enumerated agencies are hereby expressly transferred by a Type II transfer, as defined by G.S. 143A-6, to this recreated and reconstituted Department of Commerce; and,
(3) All other functions, powers, duties and obligations as are conferred by this Chapter, delegated or assigned by the Governor and conferred by the Constitution and laws of this State. Any agency transferred to the Department of Commerce by a Type II transfer, as defined by G.S. 143A-6, shall have the authority to employ, direct and supervise professional and technical personnel, and such agencies shall not be accountable to the Secretary of Commerce in their exercise of quasi-judicial powers authorized by statute, notwithstanding any other provisions of this Chapter, provided that the authority of the North Carolina State Ports Authority to employ, direct and supervise personnel shall be as provided in Part 10 of this Article.
The Department of Commerce is authorized to establish and provide for the operation of North Carolina nonprofit corporations to achieve the purpose of aiding the development of small businesses and to achieve the purposes of the United States Small Business Administration's 504 Certified Development Company Program."
Sec. 26. G.S. 143B-433 reads as rewritten:
"§ 143B-433. Department of Commerce - organization.
The Department of Commerce shall be organized to include:
(1) The North Carolina Alcoholic Beverage Control Commission,
(2) The North Carolina Utilities Commission,
(3) The Employment Security Commission,
(4) The North Carolina Industrial Commission,
(5) State Banking Commission,
(6) Savings and Loan Association Division,
(7) The State Savings and
Loan Institutions Commission,
(8) Credit Union Commission,
(9) The North Carolina Milk Commission,
(10) The North Carolina Mutual Burial Association Commission,
(11) North Carolina Cemetery Commission,
(12) The North Carolina Rural Electrification Authority,
(13) Repealed by Session Laws 1985, c. 757, s. 179(d), effective July 15, 1985.
(14) North Carolina Science and Technology Research Center,
(15) The North Carolina State Ports Authority,
(16) North Carolina National Park, Parkway and Forests Development Council,
(17) Economic Development Board,
(18) Labor Force Development Council,
(19) Energy Policy Council,
(20) Energy Division,
(21) Navigation and Pilotage Commissions established by Chapter 76 of the General Statutes,
(22) The North Carolina Technological Development Authority, and such divisions as may be established pursuant to Article 1 of this Chapter."
Sec. 27. G.S. 147-69 reads as rewritten:
"§ 147-69. Deposits of State funds in banks and savings and loan associations regulated.
Banks and savings and loan associations having State deposits
shall furnish to the Auditor of the State, upon his request, a statement of the
moneys which have been received and paid by them on account of the treasury.
The Treasurer shall keep in his office a full account of all moneys deposited
in and drawn from all banks and savings and loan associations in which he may
deposit or cause to be deposited any of the public funds, and such accounts
shall be open to the inspection of the Auditor. The Treasurer shall sign all
checks, and no depository bank or savings and loan association shall be
authorized to pay checks not bearing his official signature. The Treasurer is
authorized to use a facsimile signature machine or device in affixing his
signature to warrants, checks or any other instrument he is required by
law to sign. The Commissioner of Banks and the bank examiners, and the
Administrator of the Savings and Loan Institutions Division, and
savings and loan examiners, when so required by the State Treasurer, shall keep
the State Treasurer fully informed at all times as to the condition of all such
depository banks and savings and loan associations, so as to fully protect the
State from loss. The State Treasurer shall, before making deposits in any bank
or savings and loan association, require ample security from the bank or
savings and loan association for such deposit."
Sec. 28. G.S. 147-69.1(c)(5) reads as rewritten:
"(5)
a. Savings certificates issued
by any savings and loan association organized under the laws of the State of
North Carolina or by any federal savings and loan association having its
principal office in North Carolina; provided that any principal amount of such
certificate in excess of the amount insured by the federal government or any
agency thereof, or by a mutual deposit guaranty association authorized by the
Administrator of the Savings and Loan Institutions Division of
the Department of Commerce of the State of North Carolina, be fully
collateralized;
b. Certificates of deposit issued by banks organized under the laws of the State of North Carolina, or by any national bank having its principal office in North Carolina; provided that any principal amount of such certificate in excess of the amount insured by the federal government or any agency thereof, be fully collateralized;
c. With respect to savings certificates and certificates of deposit, the rate of return or investment yield may not be less than that available in the market on United States government or agency obligations of comparable maturity;
d. Shares of
or deposits in any savings and loan association organized under the laws of the
State of North Carolina, or any federal savings and loan association having its
principal office in North Carolina; provided that any moneys invested in such
shares or deposits in excess of the amount insured by the federal government or
any agency thereof, or by a mutual deposit guaranty association authorized by
the Administrator of the Savings and Loan Institutions Division
of the Department of Commerce of the State of North Carolina, be fully secured
by surety bonds, or be fully collateralized.
e. Prime quality commercial paper bearing the highest rating of at least one nationally recognized rating service and not bearing a rating below the highest by any nationally recognized rating service which rates the particular obligation.
f. Bills of exchange or time drafts drawn on and accepted by a commercial bank and eligible for use as collateral by member banks in borrowing from a federal reserve bank, provided that the accepting bank or its holding company is either (i) incorporated in the State of North Carolina or (ii) has outstanding publicly held obligations bearing the highest rating of at least one nationally recognized rating service and not bearing a rating below the highest by any nationally recognized rating service which rates the particular obligations.
g. Asset-backed securities (whether considered debt or equity) provided they bear the highest rating of at least one nationally recognized rating service and do not bear a rating below the highest rating by any nationally recognized rating service which rates the particular securities.
h. Corporate bonds and notes provided they bear the highest rating of at least one nationally recognized rating service and do not bear a rating below the highest by any nationally recognized rating service which rates the particular obligation."
Sec. 29. G.S. 150B-1(d) reads as rewritten:
"(d) The following are specifically exempted from the provisions of this Chapter: the Administrative Rules Review Commission, the Employment Security Commission, the Industrial Commission, the Occupational Safety and Health Review Board in all actions that do not involve agricultural employers, and the Utilities Commission.
The North Carolina National Guard is exempt from the provisions of this Chapter in exercising its court-martial jurisdiction.
The Department of Human Resources is exempt from this Chapter in exercising its authority over the Camp Butner reservation granted in Article 6 of Chapter 122C of the General Statutes.
The Department of Correction is exempt from the provisions of this Chapter, except for Article 5 of this Chapter and G.S. 150B-13 which shall apply.
Articles 2 and 3 of this Chapter shall not apply to the Department of Revenue. Except as provided in Chapter 136 of the General Statutes, Articles 2 and 3 of this Chapter do not apply to the Department of Transportation.
Article 4 of this Chapter, governing judicial review of final
administrative decisions, shall apply to The University of North Carolina and
its constituent or affiliated boards, agencies, and institutions, but The
University of North Carolina and its constituent or affiliated boards,
agencies, and institutions are specifically exempted from the remaining
provisions of this Chapter. Article 4 of this Chapter shall not apply to
the State Banking Commission, the Commissioner of Banks, the Savings and
Loan Institutions Division of the Department of Commerce, and the
Credit Union Division of the Department of Commerce.
Article 3 of this Chapter shall not apply to agencies governed by the provisions of Article 3A of this Chapter, as set out in G.S. 150B-38(a).
Articles 3 and 3A of this Chapter shall not apply to the Governor's Waste Management Board in administering the provisions of G.S. 104E-6.2.
Article 2 of this Chapter shall not apply to the North Carolina Low-Level Radioactive Waste Management Authority in administering the provisions of G.S. 104G-10 and G.S. 104G-11. Articles 3 and 3A of this Chapter shall not apply to the North Carolina Low-Level Radioactive Waste Management Authority in administering the provisions of G.S. 104G-9, 104G-10, and 104G-11."
Sec. 30. G.S. 150B-38(a) reads as rewritten:
"(a) The provisions of this Article shall apply to the following agencies:
(1) Occupational licensing agencies;
(2) The State Banking
Commission, the Commissioner of Banks, the Savings and Loan Institutions
Division of the Department of Commerce, and the Credit Union Division of
the Department of Commerce; and
(3) The Department of Insurance and the Commissioner of Insurance."
Sec. 31. G.S. 159-30(c)(5) reads as rewritten:
"(5) Savings certificates
issued by any savings and loan association organized under the laws of the
State of North Carolina or by any federal savings and loan association having
its principal office in North Carolina; provided that any principal amount of
such certificate in excess of the amount insured by the federal government or
any agency thereof, or by a mutual deposit guaranty association authorized by
the Administrator of the Savings and Loan Institutions Division
of the Department of Commerce of the State of North Carolina, be fully
collateralized."
Sec. 32. This act is effective upon ratification.
In the General Assembly read three times and ratified this the 26th day of April, 1989.