NRS: CHAPTER 659 - ORGANIZATION AND LICENSING OF BANKS

[Rev. 6/29/2024 4:53:50 PM--2023]

CHAPTER 659 - ORGANIZATION AND LICENSING OF BANKS

NRS 659.015 Requirements for organization by person, existing corporation or existing limited-liability company.

NRS 659.025 Articles of incorporation or organization: Contents.

NRS 659.035 Delivery of articles of incorporation or organization for filing; delivery of certificate of amendment of articles by existing corporation or limited-liability company for filing; restriction on filing.

NRS 659.045 Examination and certification of proposed bank by Commissioner; payment and deposit of fees and expenses; regulations.

NRS 659.047 Payment of assessment; cooperation with audits and examinations.

NRS 659.055 Appeal from refusal to make certification.

NRS 659.065 Filing of articles of incorporation or organization; filing of certificate of amendment of articles; effect of filing; admissibility of articles as evidence; limitation on validity.

NRS 659.075 Payment of initial stockholders’ or members’ equity; sale of stock or solicitation of contributions to bank in process of organization.

NRS 659.085 Filing of statement regarding directors, managers and officers and proof of federal deposit insurance.

NRS 659.095 Examination of affairs of bank by Commissioner; issuance of certificate authorizing commencement of business.

NRS 659.105 Restriction on transaction of business.

NRS 659.115 Unlawful transaction of banking business without license; penalty.

NRS 659.125 Unlawful use of words “bank,” “banking” or “banker” in name; exceptions; penalty.

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NRS 659.015 Requirements for organization by person, existing corporation or existing limited-liability company.

1. One or more persons who desire to form a bank and engage in the business of establishing, maintaining and operating banks of discount and deposit, savings, time and demand deposits, or in the business of establishing, maintaining and operating offices of loan and deposits, or to operate a bank doing a trust and fiduciary business, must organize as a banking corporation or company in the manner provided in chapters 657 to 671, inclusive, of NRS.

2. An existing corporation, including, but not limited to, a corporation licensed to engage in business pursuant to chapter 677 of NRS, or a limited-liability company that desires to form a bank and engage in the activities described in subsection 1 must:

(a) Dissolve and reorganize as a banking corporation or company in the manner provided in chapters 657 to 671, inclusive, of NRS; or

(b) Amend its articles of incorporation or organization in such a manner that it is organized as a banking corporation or company in the manner provided in chapters 657 to 671, inclusive, of NRS.

(Added to NRS by 1971, 969; A 1995, 474; 1997, 976)

NRS 659.025 Articles of incorporation or organization: Contents. The articles of incorporation or organization must, in addition to the requirements prescribed in chapters 78 and 86 of NRS, set forth the nature of the business of the corporation or limited-liability company.

(Added to NRS by 1971, 969; A 1995, 474; 1997, 976)

1. If the proposed bank is not an existing corporation or limited-liability company, the articles of incorporation or organization for the proposed bank must be delivered to the Secretary of State for filing.

2. If the proposed bank is an existing corporation or limited-liability company, a certificate of amendment of the articles of incorporation or organization must be delivered to the Secretary of State for filing.

3. The Secretary of State shall forthwith transmit to the Commissioner a copy of the articles or certificate of amendment and shall not file the articles or certificate of amendment until authorized to do so by the Commissioner.

(Added to NRS by 1971, 969; A 1983, 1726; 1985, 1223; 1987, 1901; 1995, 475; 1997, 976)

NRS 659.045 Examination and certification of proposed bank by Commissioner; payment and deposit of fees and expenses; regulations.

1. Upon receipt of a copy of the articles of incorporation or organization or the certificate of amendment of the articles of incorporation or organization of the proposed bank, the Commissioner shall at once examine all of the facts connected with the formation of the proposed banking corporation or company, including its location and proposed stockholders or members. If it appears that the bank, if formed, will be lawfully entitled to commence the business of banking, the Commissioner shall so certify to the Secretary of State, unless upon examination and investigation the Commissioner finds that:

(a) The proposed bank is formed for any other than legitimate banking business;

(b) The character, general fitness and responsibility of the persons proposed as stockholders, directors, officers, members or managers of the bank are not such as to command the confidence of the community in which the bank is proposed to be located;

(c) The probable volume of business and reasonable public demand in such community is not sufficient to assure and maintain the solvency of the new bank and of the bank or banks existing in the community at that time;

(d) The name of the proposed banking corporation or company does not comply with the provisions of NRS 657.200.

2. The Commissioner shall not make the certification to the Secretary of State until the Commissioner has ascertained that the establishment of the bank will meet the needs and promote the convenience of the community to be served by the bank.

3. A nonrefundable fee of not more than $6,000 for the application and survey must be submitted to the Commissioner upon filing the articles or certificate of amendment with the Secretary of State. The proposed banking corporation or company shall also pay such additional expenses incurred in the process of investigation as the Commissioner deems necessary. All money received by the Commissioner pursuant to this section must be placed in the Investigative Account created by NRS 232.545.

4. The Commissioner shall adopt regulations establishing the amount of the application fee required pursuant to this section.

(Added to NRS by 1971, 970; A 1983, 1316, 1726; 1987, 1902; 1991, 1806; 1995, 475; 1997, 977; 2005, 1843)

NRS 659.047 Payment of assessment; cooperation with audits and examinations. Each bank shall pay the assessment levied pursuant to NRS 658.055 and cooperate fully with the audits and examinations performed pursuant thereto.

(Added to NRS by 1987, 826)

NRS 659.055 Appeal from refusal to make certification. Any person aggrieved by any decision of the Commissioner made under NRS 659.045 may appeal to the State Board of Finance if a review of the decision is desired. The appeal must be made within 15 days after the Commissioner makes the decision. If an appeal is taken, the State Board of Finance shall conduct a full hearing.

(Added to NRS by 1971, 970; A 1977, 95; 1983, 1727; 1985, 738; 1987, 1902)

NRS 659.065 Filing of articles of incorporation or organization; filing of certificate of amendment of articles; effect of filing; admissibility of articles as evidence; limitation on validity.

1. Upon receipt of the certification from the Commissioner, the Secretary of State shall, if the articles of incorporation or organization are, or the certificate of amendment of the articles of incorporation or organization is, in accordance with law, file the articles or the certificate of amendment and cause the articles or certificate of amendment to be recorded in the Office of the Secretary of State. The Secretary of State shall, upon the payment of the organization fees, certify under his or her official seal a copy of the original or amended articles. The certified copy of the original or amended articles must be filed in the Office of the Commissioner.

2. Upon completion of the requirements of subsection 1, the banking corporation or company is legally constituted under the name stated in the articles.

3. The articles, or a copy thereof, certified by the Secretary of State or the Commissioner, under their respective seals, are admissible as evidence in all courts and places, and are, in all judicial proceedings, prima facie evidence of the complete organization and incorporation of the banking corporation purporting to have been established by the articles.

4. The articles of a bank become void if the bank fails to complete its organization and open for business to the public within 6 months after the date of the filing of its articles or a certificate of amendment of its articles by the Secretary of State. The Commissioner may extend this limitation for good cause.

(Added to NRS by 1971, 970; A 1983, 1727; 1987, 1902; 1995, 475; 1997, 977)

NRS 659.075 Payment of initial stockholders’ or members’ equity; sale of stock or solicitation of contributions to bank in process of organization.

1. Subject to subsection 2, the initial stockholders’ or members’ equity of a bank must be fully paid in, in cash, before it is authorized by the Commissioner to commence business. The full payment in cash must be certified to the Commissioner under oath by the president or manager of the bank.

2. Except for any commission or fee not otherwise prohibited by this subsection, the stock sold by or contributions to any bank in the process of organization must be accounted for to the bank in the full amount paid. No commission or fee may be paid to any person, association or corporation for selling the stock of or soliciting contributions to any bank in the process of organization. The Commissioner shall refuse such a bank the authority to commence business if commissions or fees have been paid, or have been contracted to be paid by the bank, or by anyone in its behalf, to any person, association or corporation for securing subscriptions for, or selling stock in, or procuring contributions to, the bank.

(Added to NRS by 1971, 971; A 1983, 1727; 1987, 1903; 1991, 616; 1995, 476; 1997, 978)

NRS 659.085 Filing of statement regarding directors, managers and officers and proof of federal deposit insurance. Before the banking corporation or company begins business, it shall file with the Commissioner:

1. A statement, under oath by the president or a manager, containing the names of all the directors, managers and officers, with the date of their election or appointment, terms of office, residences and post office address of each, the amount of stock of which each is the owner in good faith and the amount of money paid in on account of the stock, or the contribution made. Nothing may be received in payment of stock or contribution except money.

2. Proof that the bank is a member of the Federal Deposit Insurance Corporation.

(Added to NRS by 1971, 971; A 1983, 1728; 1987, 1903; 1995, 476; 1997, 978)

NRS 659.095 Examination of affairs of bank by Commissioner; issuance of certificate authorizing commencement of business.

1. Upon filing of the statement and proof by the banking corporation or company as required by NRS 659.085, the Commissioner shall examine its affairs, ascertain especially the amount of the initial stockholders’ or members’ equity, the name and place of residence of each director, the amount of stock of which each is the owner in good faith or the amount of his or her contribution, and whether the banking corporation or company has complied with all the provisions of law required to entitle it to engage in business.

2. If upon the examination the Commissioner finds that the banking corporation or company is lawfully entitled to commence business, the Commissioner shall give to it a certificate signed by the Commissioner that it has complied with all the provisions of law required before commencing business and that it is authorized to commence business.

(Added to NRS by 1971, 971; A 1983, 1728; 1987, 1904; 1995, 477; 1997, 979)

NRS 659.105 Restriction on transaction of business. No banking corporation or company may transact any business except such as is incidental and necessarily preliminary to its organization until it has been authorized to do so by the Commissioner.

(Added to NRS by 1971, 972; A 1983, 1728; 1987, 1904; 1995, 477)

NRS 659.115 Unlawful transaction of banking business without license; penalty.

1. No person, except a bank maintaining an office in this State and doing business under the laws of the United States, may solicit or accept deposits in this State or otherwise engage in the banking business in this State without first obtaining from the Commissioner, as provided in this section, a license authorizing it, as a banking corporation or company, to use the name and transact the business of a bank. The transacting of any banking business without such authority is a gross misdemeanor.

2. For the purposes of this section “solicits deposits” has the meaning ascribed to it in NRS 80.016.

(Added to NRS by 1971, 972; A 1983, 1728; 1987, 1904; 1989, 626; 1991, 372, 1317; 1995, 477)

NRS 659.125 Unlawful use of words “bank,” “banking” or “banker” in name; exceptions; penalty.

1. A business entity may not be organized under the laws of this State with the words “bank” or “banking” as part of its name except corporations or limited-liability companies subject to regulation pursuant to chapters 657 to 668, inclusive, 673 or 677 of NRS, or corporations under the regulation of the Commissioner of Insurance. A corporate or company name must not be amended to include the words “bank” or “banking” unless the corporation or company is under such regulation.

2. Except as otherwise provided in subsection 3, a natural person, association, firm or corporation domiciled within this State, except a national bank or a banking corporation subject to regulation pursuant to chapters 657 to 668, inclusive, 673 or 677 of NRS, or under the regulation of the Commissioner of Insurance, may not advertise or put forth any sign as bank, banking or banker or use the word “bank,” “banking” or “banker” as part of its name and title.

3. A thrift company subject to the provisions of chapter 677 of NRS may use the words “savings bank” as part of its name if its deposits are federally insured.

4. Any person who violates any of the provisions of this section shall be fined not more than $500 for each offense.

(Added to NRS by 1971, 972; A 1983, 1729; 1985, 315, 738; 1987, 1627; 1989, 1101; 1995, 477; 2017, 1958)