A. Every financial institution subject to this Title shall make semiannually, and at such other times as the superintendent may direct, a report of condition to the superintendent. Such The report shall must exhibit in detail and under appropriate headings the assets, liabilities and capital of the institution as of such date as the superintendent may specify. Each such report shall must contain a declaration that the report is true and correct signed by an officer designated by the board of directors to make such declaration and to so act on the board's behalf. The financial institution shall retain a copy of the report that is filed with the bureau, including the original signature or signatures attesting that the report is true and correct and shall make it available upon examination of the financial institution. The report required hereunder shall must be transmitted to the superintendent within 10 days after a request therefor for the report.

Sec. 6. 9-B MRSA §241, sub-§9, ¶A, as enacted by PL 1995, c. 628, §18, is amended to read:

A. A person, if duly authorized under the laws of this State, another state or the United States to conduct the business of banking, may use as a part of the name or title under which it conducts business in this State the terms "saving," "savings," "savings bank," "bank," "banker," "trust," "trust company," "banking" or "trust and banking company." The superintendent may require the filing of supporting documentation relating to this paragraph in the form and manner and containing such information as the superintendent may prescribe.

Sec. 7. 9-B MRSA §241, sub-§12 is enacted to read:

12.__Electronic banking.__A financial institution or credit union organized under the provisions of federal law, law of another state or law of a foreign country that does not meet the definition of authorized to do business in this State, pursuant to section 131, may engage in the business of banking through electronic or similar means in this State and is subject to the provisions of Parts 1 and 2 to the same extent Parts 1 and 2 apply to a financial institution authorized to do business in this State.

Sec. 8. 9-B MRSA §339-A, sub-§2, as amended by PL 1997, c. 398, Pt. E, §11, is repealed.

Sec. 9. 9-B MRSA §428, as repealed and replaced by PL 1977, c. 707, §2, is amended to read:

§428. Inactive deposits or accounts

All moneys in unclaimed accounts in each financial institution authorized to do business in this State shall must be disposed of according to Title 33, chapter 27 41.

Sec. 10. 9-B MRSA §446-A, sub-§1, as amended by PL 1999, c. 218, §21, is further amended to read:

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 financial institution is well capitalized as determined by the superintendent;

B. At the time of the transaction, the 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 financial 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 financial institution;

E. During the 12-month period prior to the proposed transaction, the financial institution has not been under an enforcement action nor is there an enforcement action pending;

F. The financial institution provides written notification to the superintendent not later than 10 business days after at least 30 days prior to consummating the transaction; and

G. The activity is authorized pursuant to this Title or by rule or order of the superintendent.

Notwithstanding paragraphs A and G, the superintendent, after review of the written notification under paragraph F, may require an application if the superintendent determines that the activity raises significant supervisory concerns or raises significant legal or policy issues.

Sec. 11. 9-B MRSA §466, sub-§4, as amended by PL 1975, c. 666, §23-A, is further amended to read:

4. Unauthorized business. No A person shall may not engage in the business of financial institutions banking unless he the person is properly authorized, nor may a person represent that he that person is acting as such a financial institution, nor use an artificial or corporate name which that purports to be or suggests that it the person is such a financial institution unless the financial institution is properly authorized to do business in this State and except as provided in section 241, subsection 12. Financial institutions organized under the laws of the United States shall not be subject to this provision.

Sec. 12. 9-B MRSA §814, sub-§1, as amended by PL 1999, c. 218, §25, is further amended to read:

1. Field of membership. "Field of membership" of a credit union means those persons, including nonnatural persons, having a common bond of occupation or association; multiple groups of such persons, each group having a common bond of occupation or association within that group; residence or employment within a well-defined neighborhood, community or rural district; employment by a common employer or by employers located within a well-defined industrial park or community; membership in a bona fide fraternal, religious, cooperative, labor, rural, educational or similar organization; and members of the immediate families of such persons.

A. When determining whether a credit union's proposed field of membership meets the requirements of this section, the superintendent shall consider all guidelines established by the National Credit Union Administration that address the issues of common bond, overlapping fields of membership, expansions or conversions of field of membership and the documentation required for amending a field of membership.

B. The superintendent shall provide notice to interested parties of a bylaw amendment sought by a credit union that proposes a change in field of membership.

C.__For purposes of this section, "nonnatural person" means a corporation, partnership, joint venture, trust, estate, unincorporated association, fraternal organization or voluntary association that is:

(1)__Specifically listed in a credit union's bylaws as a member;

(2)__With respect to a community-chartered credit union, located within the geographic limits of the credit union's field of membership; or

(3)__Composed principally of individual persons within the credit union's field of membership and the credit union's field of membership includes organizations of such persons.

Sec. 13. 9-B MRSA §814, sub-§2, as enacted by PL 1975, c. 500, §1, is repealed.

Sec. 14. 9-B MRSA §827, sub-§2, as repealed and replaced by PL 1983, c. 51, §2, is amended to read:

2. Receipt of payments from government agencies and other credit unions. A credit union may act as fiscal agent for and receive payments on shares and deposits from the Federal Government, this State or any agency or political subdivision or another federally insured credit union.

Sec. 15. 9-B MRSA §844, sub-§2, as amended by PL 1979, c. 429, §12, is further amended to read:

2. Verification of share, deposit and loan accounts.

A. At least once in every 3 2 years, or more often if required by National Credit Union Administration law, rules or regulations, the supervisory committee shall verify or cause to be verified, 100% of the share and, deposit and loan accounts of members of the credit union and a report of the verification shall must be made to the superintendent within 30 days of the completion of the verification kept on file and available to be reviewed at the time of the next examination or upon request by the superintendent.

(1)__If the verification is performed by the supervisory committee, a controlled verification of 100% of the members' share, deposit and loan accounts must be made.

(2)__If the verification is performed by a certified public accountant, the auditor may choose the verification method set forth in subsection 1 or a sampling method sufficient in both number and scope on which to base conclusions concerning the validity of such records.

B. If the superintendent deems determines such verification inadequate, he the superintendent may cause the bureau to verify such accounts; and the bureau shall must have full access to every aspect of the credit union's activities and to all books, papers, vouchers, resources and all other records and property belonging to said credit union, whether in its immediate possession or otherwise, for the purpose of facilitating such verification.

C. Expenses incurred by the superintendent in any such verification shall must be paid by the credit union, to be credited and used as provided in section 214.

Sec. 16. 9-B MRSA §862, sub-§4, as enacted by PL 1983, c. 51, §11, is repealed.

Sec. 17. 9-B MRSA §872, sub-§1, ¶¶A and B, as enacted by PL 1975, c. 500, §1, are amended to read:

A. Any 2 or more credit unions authorized to do business in this State A credit union organized under provisions of the laws of this State, another state or federal laws may merge or consolidate into a credit union organized under the laws of the State with the approval of the superintendent obtained pursuant to section 252, and in accordance with such procedures as the superintendent may require.

B. If any credit union involved in the proposed merger is a federal credit union, such merger is subject to all applicable laws, rules and regulations of the United States. A credit union involved in the proposed merger that is organized under provisions of law of another state is subject to all applicable laws, rules and regulations of that state.

Sec. 18. 9-B MRSA §876, as repealed and replaced by PL 1975, c. 666, §30, is amended to read:

§876. Acquisitions

A credit union organized under the laws of this State may acquire all or substantially all the assets of, or assume the liabilities of, any other credit union organized under provisions

of the laws of this State, another state or federal laws or any financial institution authorized to do business in this State; provided that such purchase or sale pursuant to this section shall be executed in accordance with the requirements of section 355 and shall be subject to the provisions of sections 357 and 358.

Sec. 19. 9-B MRSA §1011, sub-§4, as amended by PL 1991, c. 386, §26, is further amended to read:

4. Control. A company controls another company, referred to in this chapter as a "subsidiary," if it owns 25% or more of the voting shares equity interest of the subsidiary or if under the federal Bank Holding Company Act of 1956, as amended, under the federal Home Owners' Loan Act, Section 1467A, as amended, or under the Federal Deposit Insurance Act, as amended, or regulations or policy statements issued thereunder, that company is presumed to control the subsidiary or a determination has been made by the superintendent that the company exercises a controlling influence over the management and policies of the subsidiary.

Sec. 20. 9-B MRSA §1015, sub-§1, ¶D, as amended by PL 1997, c. 398, Pt. K, §10, is further amended to read:

D. Authority for a Maine financial institution holding company to engage in a closely related activity or any other activity or to acquire or establish a subsidiary to engage in a closely related activity or any other activity; or

Sec. 21. 9-B MRSA §1015, sub-§1, ¶E, as repealed and replaced by PL 1997, c. 683, Pt. A, §2, is amended to read:

E. Authority for any financial institution holding company, foreign bank or foreign bank holding company controlling a Maine financial institution to engage in a closely related activity in Maine, the State or acquisition to acquire or establishment of establish a subsidiary in Maine the State to engage in a closely related activity.

Sec. 22. 9-B MRSA §1239 is enacted to read:

§1239.__Holding companies of uninsured banks

If a holding company is not a financial institution holding company under chapter 101 by virtue of controlling a financial institution other than a merchant bank, a nondepository trust company or an uninsured bank, the superintendent may grant the holding company a waiver from the provisions of chapter 101; except that, the superintendent may not waive the requirements of

section 1013, subsection 1 and the application requirements of section 1015 relevant to section 1013, subsection 1.

If a holding company is not a financial institution holding company under chapter 101 by virtue of controlling financial institutions other than a merchant bank, nondepository trust company or uninsured bank, the superintendent may examine the holding company, including its subsidiaries and affiliates, to the extent necessary to determine the soundness and viability of the uninsured bank.

SUMMARY

This bill makes several technical changes to the Banking Code.

1. It amends the confidential financial records law to specifically permit a financial institution to respond to a request from the Department of Labor.

2. It amends the current formula for assessments paid by nondepository trust companies, establishing a base rate that is consistent with assessments paid by depository institutions and the ability for the superintendent to change the rate or further define fiduciary assets under management through rulemaking.

3. It establishes an assessment to be paid by an uninsured bank or merchant bank to be consistent with the assessment paid by other state-chartered depository or nondepository institutions.

4. It removes the requirement that original signatures attesting to the condition and income reports be filed with the Department of Professional and Financial Regulation, Bureau of Banking.

5. It clarifies state law with respect to filing notice for use of restrictive terms such as "savings bank" or "trust and banking company."

6. It enacts a provision to recognize that financial institutions and credit unions now utilize the Internet to deliver products and services.

7. It repeals a provision that requires a financial institution to have a branch in the State in order to operate a satellite facility or an automated teller machine.

8. It corrects a reference to the abandoned property law.

9. It changes the notice requirement necessary for a financial institution to engage in a closely related activity or to have a subsidiary engage in a closely related activity from not later than 10 business days after consummating the transaction to at least 30 days prior to consummating the transaction. The bill also gives the Superintendent of the Bureau of Banking the flexibility to require a full application in certain unique circumstances.

10. It clarifies banking law with respect to "unauthorized business."

11. It realigns law relating to credit union field of membership to include nonnatural persons in a field of membership. Current law utilizes the term "limited members" in lieu of the term "nonnatural persons," which is used in the Federal Credit Union Act and implementing regulations. Also current state law places restrictions and limitations for limited members that are not imposed under federal law. This bill establishes parity in this area.

12. It provides parity between state and federally chartered credit unions by clarifying state law as follows. It permits state chartered credit unions to accept deposits and shares of other federally insured credit unions. It alters the process and timing for verification of accounts. It removes outdated limitations on the sale of credit union assets.

13. It clarifies credit union merger and acquisition statutes to more closely parallel federal credit union law.

14. It clarifies the definition of "control" under bank holding company laws.

15. It makes technical changes to the application requirements for a financial institution holding company to engage in closely related activities.

16. It treats companies that own uninsured banks in the same fashion as companies that own merchant banks and nondepository trust companies with respect to the application of the Maine bank holding company laws.