HOUSE BILL No. 5907 June 20, 2000, Introduced by Reps. Wojno, Sanborn, Shackleton, Hager, Mortimer, Van Woerkom, Bishop, DeVuyst, Rick Johnson, Daniels, Hale, Thomas, Bob Brown, Patterson, Julian, Ehardt, Bisbee, Law, Clark, Richner, O'Neil, Jansen and Basham and referred to the Committee on Insurance and Financial Services. A bill to amend 1996 PA 354, entitled "Savings bank act," by amending sections 102 and 103 (MCL 487.3102 and 487.3103). THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 102. As used in this act: 2 (a) "Agency office" means a place at which the business of a 3 savings bank is conducted other than by regularly employed per- 4 sonnel of the savings bank, as provided under section 417(6). 5 (b) "Articles" means articles of incorporation, all amend- 6 ments to articles of incorporation, and agreements of consolida- 7 tion and merger. 8 (c) "Approved by the members", for a mutual savings bank, 9 means approved by a majority of all votes cast at a duly held 10 regular meeting or special meeting. 06708'00 MRM 2 1 (d) "Affiliate" means a corporation, business trust, LIMITED 2 LIABILITY COMPANY, association, or an organization to which 1 or 3 more of the following apply: 4 (i) A savings bank, directly or indirectly, owns or controls 5 either a majority of its voting shares or more than 50% of the 6 number of shares voted for the election of its directors, trust- 7 ees, or other persons exercising similar functions at the preced- 8 ing election, or controls in any manner the election of a major- 9 ity of its directors, trustees, or other persons exercising simi- 10 lar functions. 11 (ii) Control of the organization is held, directly or indi- 12 rectly, through stock ownership or in any other manner, by the 13 shareholders of a savings bank who own or control either a major- 14 ity of the shares of that savings bank or more than 50% of the 15 number of shares voted for the election of directors of that sav- 16 ings bank at the preceding election, or by trustees for the bene- 17 fit of the shareholders of that savings bank, or by members of 18 the savings bank if it is a mutual savings bank. 19 (iii) A majority of its directors, trustees, or other per- 20 sons holding similar positions are directors of any 1 savings 21 bank. 22 (iv) Owns or controls, directly or indirectly, either a 23 majority of the shares of capital stock of any 1 savings bank or 24 more than 50% of the number of shares voted for the election of 25 directors of that savings bank at the preceding election, or con- 26 trols in any manner the election of a majority of the directors 27 of that savings bank, or for the benefit of whose shareholders 06708'00 3 1 all or substantially all the capital stock of that savings bank 2 is held by trustees. 3 (e) "Association" means a federal savings association orga- 4 nized under section 5 of the home owners' loan act, chapter 64, 5 48 Stat. 132, 12 U.S.C. 1464, or a savings and loan association, 6 building and loan association, or homestead association, that is 7 organized under the laws of a state or the District of Columbia 8 and whose deposits are insured by the federal deposit insurance 9 corporation. 10 (f) "Bank" means a state banking corporation organized or 11 reorganized under the provisions of the banking code of1969,12Act No. 319 of the Public Acts of 1969, being sections 487.301 to13487.598 of the Michigan Compiled Laws1999, 1999 PA 276, 14 MCL 487.11101 TO 487.15101, or organized underthe provisions of15anyA law of this stateenactedbeforeAugust 20, 196916 MARCH 1, 2000. 17 (g) "Bank holding company" means a stock or mutual company 18 as defined in the bank holding company act of 1956, chapter 240, 19 70 Stat. 133, or a company defined as a savings and loan holding 20 company in the home owners' loan act, chapter 64, 48 Stat. 128, 21 that is not a savings bank, national banking association, or 22 association. 23 (h) "Branch" means a place of business, other than the prin- 24 cipal office of a savings bank, at which the savings bank trans- 25 acts business that may be conducted at its principal office. 26 Branch does not include a subsidiary, service entity, agency 27 office, TRUST OFFICE, loan production office, place where only 06708'00 4 1 records are made, posted, or kept, place of business of a 2 financial institution with which the savings bank has an agency 3 relationship under section 401, or an automated teller machine if 4 it is made available to 2 or more federal or state chartered 5 financial institutions under a state statute which regulates 6 electronic funds transfer facilities. The acceptance of deposits 7 in furtherance of a school thrift or savings plan by an officer, 8 employee, or agent of a savings bank at any school is not the 9 establishment or operation of a branch. The receipt of deposits 10 by a messenger service or the delivery by messenger service of 11 items representing deposit account withdrawals or of loan pro- 12 ceeds is not the establishment or operation of a branch, whether 13 or not the messenger service is owned or operated by the savings 14 bank. 15 (i) "Bureau" means the financial institutions bureau in the 16 department of consumer and industry services. 17 (j) "Capital" means the stated par value of issued and out- 18 standing unimpaired common stock and the stated par value of 19 issued and outstanding unimpaired preferred stock. 20 (k) "Commissioner" means the commissioner of the financial 21 institutions bureau. 22 (l) "Compliance review committee" means both of the 23 following: 24 (i) One or more persons assigned by management or appointed 25 by the board of directors or other governing body of a depository 26 institution, or of a subsidiary of a depository institution, or 06708'00 5 1 of a service corporation or other service entity of a depository 2 institution, for the purposes set forth in section 339. 3 (ii) Any other person to the extent the person acts in an 4 investigatory capacity at the direction of a compliance review 5 committee. 6 (m) "Compliance review documents" means documents prepared 7 in connection with a review or evaluation conducted by or for a 8 compliance review committee. 9 (n) "Consolidate", "consolidated", "consolidating", and 10 "consolidation" mean the consolidation or merger of 2 or more 11 depository institutions. 12 (o) "Consolidated savings bank" means a savings bank that 13 results from a consolidation between a savings bank and 1 or more 14 banks, out-of-state banks, national banks, associations, or sav- 15 ings banks. 16 (p) "Consolidated organization" means an organization that 17 results from a consolidation of consolidating organizations. 18 (q) "Consolidating organizations" means any combination of 19 banks, out-of-state banks, national banks, associations, savings 20 banks, or state or federal credit unions that have consolidated 21 or are in the process of consolidation as provided in section 701 22 or 702. 23 (r) "Depository institution" means a bank, out-of-state 24 bank, national bank, association, savings bank, cooperative bank, 25 industrial bank, or credit union organized under the laws of this 26 state, another state, the District of Columbia, the United 27 States, or a territory or protectorate of the United States. 06708'00 6 1 (s) "Director" means a director, trustee, or other person 2 holding a similar position with respect to an organization 3 whether incorporated or unincorporated. Director does not 4 include an advisory director, honorary director, director emeri- 5 tus, or similar person, unless the person is otherwise performing 6 functions similar to those of a director. 7 (T) "DIVIDEND REINVESTMENT PLAN" MEANS A PLAN THAT IS 8 OFFERED SOLELY TO EXISTING SHAREHOLDERS OF THE SAVINGS BANK AND 9 WHICH ALLOWS THE SHAREHOLDERS TO REINVEST DIVIDENDS RECEIVED 10 UNDER SECTION 316 IN STOCK OF THE SAVINGS BANK AND THAT MAY ALLOW 11 ADDITIONAL CASH AMOUNTS TO BE CONTRIBUTED BY THE SHAREHOLDERS 12 PARTICIPATING IN THE REINVESTMENT PLAN. 13 (U)(t)"Federal reserve act" means the federal reserve 14 act, chapter 6, 38 Stat. 251. 15 (V)(u)"Fiduciary" means a trustee, executor, administra- 16 tor, guardian, conservator, agent, receiver, trustee in bankrupt- 17 cy, assignee for creditors, or any holder of a similar position 18 of trust. It also describes the relationship of a director to a 19 savings bank as stipulated in section 323.of this act.20 (W)(v)"Foreign country" means a country other than the 21 United States and includes a colony, dependency, or possession of 22 a country other than the United States. 23 (X)(w)"Impairment" means a condition in which the value 24 of the savings bank's assets is less than the aggregate amount of 25 the savings bank's liabilities to creditors and depositors, less 26 its capital, if the savings bank is a stock savings bank, or a 27 condition in which the value of the savings bank's assets is less 06708'00 7 1 than the aggregate amount of the savings bank's liabilities to 2 creditors and members, if the savings bank is a mutual savings 3 bank. 4 (Y)(x)"Incorporator" means a person who signed the orig- 5 inal articles of incorporation. 6 Sec. 103. As used in this act: 7 (A) "LLC MEMBER" MEANS A PERSON WITH OWNERSHIP INTEREST 8 UNDER THE MICHIGAN LIMITED LIABILITY COMPANY ACT, 1993 PA 23, 9 MCL 450.4101 TO 450.5200. 10 (B)(a)"Loan production office" means an office of the 11 savings bank at which only activities related to money lending 12 are conducted, which is not the principal office or a branch or 13 an agency office or an office of an affiliated depository 14 institution. 15 (C)(b)"Member" means a person holding a savings account 16 of a mutual savings bank. 17 (D)(c)"Messenger service" means a service such as a cou- 18 rier service or an armored car service that picks up from or 19 delivers to customers of 1 or more depository institutions or 1 20 or more affiliates of a depository institution cash, currency, 21 checks, drafts, securities, or other items relating to transac- 22 tions between or involving a depository institution or affiliate 23 of a depository institution and those customers, or that trans- 24 fers cash, currency, checks, drafts, securities, or other items 25 or documents between depository institutions or affiliates of 26 depository institutions. The messenger service may be owned and 06708'00 8 1 operated by 1 or more depository institutions or affiliates or by 2 a third party. 3 (E)(d)"Mobile branch" means a branch in which the loca- 4 tion of the physical structure of the branch is moved from time 5 to time. 6 (F)(e)"Mutual savings bank" means a savings bank for 7 which the articles of incorporation do not authorize the issuance 8 of common or preferred stock. 9 (G)(f)"National bank" means a bank chartered by the fed- 10 eral government under the national bank act, chapter 106, 13 11 Stat. 99. 12 (H)(g)"NetprofitsINCOME" means the remainder of all 13 earnings from operations plus actual recoveries on loans and 14 investments and other assets, after deducting from the total all 15 operating expenses, actual losses, accrued dividends on preferred 16 stock, if any, and all taxes. 17 (I)(h)"Out-of-state bank" means a banking corporation or 18 savings bank organized under the laws of another state, the 19 District of Columbia, or a territory of the United States whose 20 principal office is located in a state other than this state, the 21 District of Columbia, a territory or a protectorate of the United 22 States, and whose deposits are insured by the federal deposit 23 insurance corporation. 24 (J)(i)"Person" means an individual, corporation, limited 25 liability company, governmental entity, partnership, limited 26 liability partnership, or other legal entity. 06708'00 9 1 (K)(j)"Publication", "published", and "publish" mean 2 publication in a newspaper printed in the English language and 3 published and circulated in the county where the depository 4 institution is located or, if there is no newspaper published and 5 circulated in the county where the depository institution is 6 located, in any newspaper having general circulation in the 7 county. 8 (l)(k)"Residential real estate" means improved real 9 property that is used or intended to be used as a residence or 10 residences and contains not more than 4 dwelling units. 11 (M)(l)"Savings bank" means a state banking corporation 12 organized or reorganized under this act. 13 (N)(m)"Savings liability" or "deposit liability" means 14 the aggregate amount of accounts of depositors, including inter- 15 est accrued or credited to the accounts, less redemptions and 16 withdrawals. 17 (O)(n)"Service entity" means a stock corporation, mutual 18 company, limited liability company, limited liability partner- 19 ship, or limited partnership in which a savings bank has invested 20 under section 410. Upon written approval of the commissioner, a 21 service entity may be a general partnership. 22 (P)(o)"Shareholder" means the registered owner of any 23 share or shares of capital stock of a savings bank. 24 (Q)(p)"Stock savings bank" means a savings bank for 25 which the articles of incorporation authorize the issuance of 26 capital stock. 06708'00 10 1 (R)(q)"Subsidiary" means astockcorporation, mutual 2 company, limited liability company, limited liability 3 partnership, or limited partnership, the controlling interests of 4 which are more than 50% owned by 1 or more federally insured 5 depository institutions, and in which a savings bank has an 6 ownership interest, membership interest, or other legally 7 enforceable interest which has the indicia of ownership. Upon 8 written approval of the commissioner, and subject to the owner- 9 ship requirements set forth in this subsection, a subsidiary may 10 be a general partnership. 11 (S)(r)"Surplus" means the amount paid for issued and 12 outstanding common and preferred stock in excess of the stated 13 par value, plus any amount of transferred undivided profits, and 14 any additional amounts paid in or contributed to increase total 15 capital. 16 (T)(s)"Total capital" means an amount equal to any capi- 17 tal, plus any surplus, undivided profits, and instruments of 18 indebtedness authorized under section 310. 19 (U) "TRUST OFFICE" MEANS AN OFFICE OF A SAVINGS BANK AT 20 WHICH TRUST SERVICES ARE PERFORMED AND AT WHICH DEPOSITS ARE NOT 21 ACCEPTED, CHECKS ARE NOT PAID, AND MONEY IS NOT LENT. 22 (V)(t)"Undivided profits" means the amount of retained 23 earnings and any additional amounts held in capital reserve 24 accounts of the savings bank. 25 (W) "UNIFORM COMMERCIAL CODE" MEANS THE UNIFORM COMMERCIAL 26 CODE, 1962 PA 174, MCL 440.1101 TO 440.11102. 06708'00 11 1 (X)(u)"Value" means the present worth of all rights to 2 future benefits arising from ownership. 3 (Y)(v)"Withdrawal value of a deposit account" means the 4 amount invested in a deposit account, plus earnings, less lawful 5 deductions. 6 Enacting section 1. This amendatory act does not take 7 effect unless all of the following bills of the 90th Legislature 8 are enacted into law: 9 (a) Senate Bill No. _____ or House Bill No. 5909 (request 10 no. 03942'99 *). 11 (b) Senate Bill No. _____ or House Bill No. 5908 (request 12 no. 06709'00). 06708'00 Final page. MRM