[Rev. 11/22/2013 10:19:44 AM--2013]
[NAC-662 Revised Date: 10-06]
CHAPTER 662 - BANKS: POWERS AND MISCELLANEOUS PROVISIONS
662.001 Definitions.
662.002 “Commissioner” defined.
662.003 “Depository institution affiliate” defined.
662.004 Limits on amount of loans: “Capital” interpreted.
662.006 Limits on amount of loans: “Surplus” interpreted.
662.008 Limits on amount of loans: “Total outstanding loans” interpreted.
662.010 Long-term capital notes or debentures: Approval before issuance.
662.020 Long-term capital notes or debentures: Application for approval.
662.030 Long-term capital notes or debentures: Consideration of application.
662.040 Long-term capital notes or debentures: Obligation to depositors, other creditors.
662.050 Long-term capital notes or debentures: Maximum amount of issuance.
662.060 Long-term capital notes or debentures: Period of maturity.
662.070 Long-term capital notes or debentures: Conversion to stock.
662.080 Long-term capital notes or debentures: Computation of requirements for capital and limits on amount of loans.
662.090 Long-term capital notes or debentures: Acquisition by bank.
662.100 Deposit with affiliate of money held as fiduciary or agent: Collateral security.
662.110 Borrowing money from depository institution affiliates.
662.120 Appointment of foreign organization to act as fiduciary: Fees for appointment and service of process.
NAC 662.001 Definitions. (NRS 658.105) As used in this chapter, unless the context otherwise requires, the words and terms defined in NAC 662.002 and 662.003 have the meanings ascribed to them in those sections.
(Added to NAC by Comm’r of Financial Institutions by R008-99, eff. 11-12-99)
NAC 662.002 “Commissioner” defined. (NRS 658.105) “Commissioner” means the Commissioner of Financial Institutions.
(Added to NAC by Comm’r of Financial Institutions, eff. 5-15-92; A by R008-99, 11-12-99)
NAC 662.003 “Depository institution affiliate” defined. (NRS 658.105) “Depository institution affiliate” means a depository institution that directly or indirectly, through one or more intermediaries, is controlled by or is under common control with another depository institution.
(Added to NAC by Comm’r of Financial Institutions by R008-99, eff. 11-12-99)
NAC 662.004 Limits on amount of loans: “Capital” interpreted. (NRS 658.105, 662.145, 662.155) The Commissioner will interpret “capital,” as used in NRS 662.145 and 662.155, to include the amount of common stock that is outstanding, the amount of surplus that is unimpaired and the amount of perpetual preferred stock that is outstanding and unimpaired.
(Added to NAC by Comm’r of Financial Institutions, eff. 5-15-92)
NAC 662.006 Limits on amount of loans: “Surplus” interpreted. (NRS 658.105, 662.145, 662.155) The Commissioner will interpret “surplus,” as used in NRS 662.145 and 662.155, to include:
1. Surplus, as that word is defined in NRS 657.075.
2. Undivided profits.
3. Reserves for contingencies and other capital reserves, excluding accrued dividends on perpetual and limited life preferred stock.
4. Allowances for the net losses of loans and leases.
5. Long-term capital notes or debentures, which are subject to the limitations of NAC 662.080.
(Added to NAC by Comm’r of Financial Institutions, eff. 5-15-92)
NAC 662.008 Limits on amount of loans: “Total outstanding loans” interpreted. (NRS 658.105, 662.145, 662.155) For the purpose of determining “total outstanding loans,” as used in NRS 662.145:
1. If a loan is secured by a cash deposit, which is under the direct control of the bank making the loan, the amount of the loan does not include the amount of the cash deposit.
2. Any loans subject to the requirements of subsection 1 of NRS 662.145 and subsection 1 of NRS 662.155 must be combined if:
(a) The proceeds of the loan directly benefit another borrower with loans that are outstanding at the same bank; or
(b) A common enterprise exists between the borrowers.
3. For the purposes of this section:
(a) A “common enterprise” exists if the source of repayment for a loan is the same for each borrower or a loan is made to borrowers related through common control.
(b) “Common control” exists if:
(1) One or more persons directly or indirectly own, control or have power to vote 25 percent or more of a class of voting securities of another person;
(2) One or more persons act in concert to control, in any manner, the election of a majority of the directors, trustees or other persons exercising similar functions of another person; or
(3) Any other circumstances exist which indicate that one or more persons acting in concert directly or indirectly exercises a controlling influence over the management of policies of another person.
(Added to NAC by Comm’r of Financial Institutions, eff. 5-15-92)
NAC 662.010 Long-term capital notes or debentures: Approval before issuance. (NRS 658.105, 662.115) A bank may issue long-term capital notes or debentures only after having first received the written approval of the Administrator of Financial Institutions. The Administrator will approve or deny such an issuance after considering whether it constitutes a sound banking practice and would be in the best interests of the depositors, creditors, and stockholders of the bank and the public in its relations with the bank.
[Banking Div., Long-Term Capital Notes or Debentures Rule No. 1 subsec. 1, eff. 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)
NAC 662.020 Long-term capital notes or debentures: Application for approval. (NRS 658.105, 662.115)
1. A bank which desires to obtain approval for the issuance of long-term capital notes or debentures must submit an application to the Administrator of Financial Institutions.
2. The application must include:
(a) A statement explaining the need for and the proposed use of the money which the bank intends to borrow; and
(b) Three copies of the proposed long-term capital note or debenture.
[Banking Div., Long-Term Capital Notes or Debentures Rule No. 1 subsec. 2, eff. 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)
NAC 662.030 Long-term capital notes or debentures: Consideration of application. (NRS 658.105, 662.115) The Administrator of Financial Institutions will not consider a bank’s application for or approve the issuance of its long-term capital notes or debentures unless:
1. The bylaws or articles of incorporation of the bank grant authority to its board of directors to issue the capital notes or debentures; or
2. The holders of two-thirds of the bank’s capital stock have approved such an issuance at a stockholders’ meeting. Before such a meeting, the bank shall mail or deliver to each stockholder a notice containing a statement that the proposal will be submitted at the meeting and a copy of the proposed debenture or agreement.
[Banking Div., Long-term Capital Notes or Debentures Rule No. 1 subsec. 3, eff. 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)
NAC 662.040 Long-term capital notes or debentures: Obligation to depositors, other creditors. (NRS 658.105, 662.115)
1. The indebtedness of the bank evidenced by any long-term capital notes or debentures, including the principal and premium, if any, and interest on them, is subordinate in right of payment to the bank’s obligations to its depositors, its obligations under banker’s acceptances and letters of credit, its obligations to any Federal Reserve Bank and any similar obligations to its other creditors, whether outstanding at the time the notes or debentures are issued or thereafter incurred.
2. In any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or any liquidation or winding up of or relating to the bank, whether voluntary or involuntary, all such obligations must be paid in full before any payment is made on account of the principal of, or premium, if any, or interest on, the capital notes or debentures.
3. A provision containing the substance of subsections 1 and 2 must be incorporated in every long-term capital note, debenture, or agreement for purchase or sale of such capital notes or debentures.
[Banking Div., Long-Term Capital Notes or Debentures Rule No. 1 subsec. 4, eff. 12-14-78]
NAC 662.050 Long-term capital notes or debentures: Maximum amount of issuance. (NRS 658.105, 662.115) A bank shall not issue long-term capital notes or debentures in an amount exceeding 100 percent of its paid in capital stock plus 50 percent of its unimpaired surplus.
[Banking Div., Long-Term Capital Notes or Debentures Rule No. 1 subsec. 5, eff. 12-14-78]
NAC 662.060 Long-term capital notes or debentures: Period of maturity. (NRS 658.105, 662.115) The Administrator of Financial Institutions will prescribe periods of maturity not exceeding 25 years for any issue of such long-term capital notes or debentures, and the issuing bank shall establish a schedule of prepayments or an appropriate sinking fund for the amortization of the indebtedness.
[Banking Div., Long-Term Capital Notes or Debentures Rule No. 1 subsec. 6, eff. 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)
NAC 662.070 Long-term capital notes or debentures: Conversion to stock. (NRS 658.105, 662.115) No such long-term capital notes or debentures may be converted into capital stock, either common or preferred, of the issuing bank without prior consent of the Administrator of Financial Institutions.
[Banking Div., Long-Term Capital Notes or Debentures Rule No. 1 subsec. 7, eff. 12-14-78]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)
NAC 662.080 Long-term capital notes or debentures: Computation of requirements for capital and limits on amount of loans. (NRS 658.105, 662.115) Any such long-term capital notes or debentures must be considered a portion of the:
1. Capital or capital structure of the issuing bank in computation of the capital requirements set forth in NRS 661.025.
2. Capital and surplus of the issuing bank, in an amount not to exceed 50 percent of that capital and surplus, in computation of the legal lending limits of the bank as set forth in NRS 662.145.
[Banking Div., Long-Term Capital Notes or Debentures Rule No. 1 subsec. 8, eff. 12-14-78]—(NAC A by Comm’r of Financial Institutions, 1-11-91)
NAC 662.090 Long-term capital notes or debentures: Acquisition by bank. (NRS 658.105, 662.115)
1. A bank chartered by the State of Nevada which issues long-term capital notes or debentures shall not acquire or hold any of these capital notes or debentures in carrying out its duties to invest any of its own assets or any money which it holds in trust or holds as a sinking fund depository for its own capital notes or debentures, except that these long-term capital notes or debentures may be held in trust where the trustor specifically authorizes in the trust instrument that they may be held in trust.
2. If any such capital notes or debentures are acquired by a bank contrary to the provisions of this section, the capital notes or debentures must be sold immediately or charged to the profit and loss account.
[Banking Div., Long-Term Capital Notes or Debentures Rule No. 1 subsec. 9, eff. 12-14-78]
NAC 662.100 Deposit with affiliate of money held as fiduciary or agent: Collateral security. (NRS 658.105) If a bank deposits money held by the bank as a fiduciary or agent with an affiliate pursuant to subsection 3 of NRS 662.097 and the money deposited exceeds the amount of federal deposit insurance applicable to the money, the affiliate shall deliver to the bank or put under the control of the bank collateral security in accordance with 12 C.F.R. § 9.10.
(Added to NAC by Comm’r of Financial Institutions, eff. 5-27-92)
NAC 662.110 Borrowing money from depository institution affiliates. (NRS 658.105, 662.015) Notwithstanding the provisions of subsections 2 and 3 of NRS 662.175, a bank may borrow money from a depository institution affiliate to the same extent that a national bank may borrow money from a depository institution affiliate.
(Added to NAC by Comm’r of Financial Institutions by R008-99, eff. 11-12-99)
NAC 662.120 Appointment of foreign organization to act as fiduciary: Fees for appointment and service of process. (NRS 658.105, 662.245)
1. A document filed with the Secretary of State by an organization that seeks to be appointed to act as a fiduciary pursuant to NRS 662.245 must be accompanied by a fee of $15.
2. Service of process filed with the Secretary of State for an organization appointed to act as a fiduciary pursuant to NRS 662.245 must be accompanied by a fee of $15.
(Added to NAC by Comm’r of Financial Institutions by R109-06, eff. 6-28-2006)