SUMMARY--Makes various changes to provisions relating to financial institutions. (BDR 55-500)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: No.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to financial institutions; revising certain provisions relating to the organization of banking corporations and companies and thrift companies; authorizing an existing corporation or company to organize as a banking corporation or company by amending its articles of incorporation or organization; authorizing a banking corporation to increase or reduce its authorized stock without the approval of its stockholders under certain circumstances; authorizing banks to liquidate their affairs voluntarily without the approval of the commissioner of financial institutions under certain circumstances; providing for the appointment of a successor trustee for a liquidated bank without the entry of an order by the district court under certain circumstances; prohibiting a thrift company from becoming authorized to engage in business in this state by obtaining a contract for the issuance of deposits issued by a private insurer; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1 Chapter 657 of NRS is hereby amended by adding thereto a new section to read as follows:
"Stockholders' equity" or "members' equity" means the capital, surplus and retained earnings of a bank.
Sec. 2 NRS 657.005 is hereby amended to read as follows:
657.005As used in this Title, [except as otherwise specifically provided or] unless the context otherwise requires, the words and terms defined in NRS 657.016 to 657.085, inclusive, and section 1 of this act have the meanings ascribed to them in those sections.
Sec. 3 NRS 657.016 is hereby amended to read as follows:
657.016 "Bank," "commercial bank," "banking company" or "banking corporation" [refers to corporations] means a corporation or limited-liability [companies, whether] company that is chartered by this state, another state or the United States [, conducting] and conducts the business of receiving money as demand deposits or otherwise [carrying] carries on a banking or banking and trust business. The terms do not include a thrift company engaged in business pursuant to chapter 677 of NRS.
Sec. 4 NRS 657.045 is hereby amended to read as follows:
657.045"Insolvency" means [any] one or more of the following:
1. When a bank cannot meet its deposit liabilities as they become due in the regular course of business.
2. When the actual cash market value of a bank's assets is insufficient to pay its liabilities to depositors and other creditors.
3. When a bank's reserve falls under the amount required by this Title, and it fails to make good such reserve within 30 days after being required to do so by the commissioner.
4. [Whenever] When the undivided profits and surplus are inadequate to cover losses of the bank and an impairment of the [capital] stock is created.
Sec. 5 NRS 657.095 is hereby amended to read as follows:
657.095 [All] The provisions of chapters 78 , [and] 86 and 92A of NRS that are not in conflict with this Title are hereby adopted as a part of this Title.
Sec. 6 NRS 658.115 is hereby amended to read as follows:
658.1151. The commissioner shall make summary orders in writing as provided in subsections 2 to 5, inclusive.
2. If a bank, a member of its board of directors or any manager, officer, employee, member or stockholder violates the [bank's] articles of incorporation or organization of the bank or any law related to banking, or, in the opinion of the commissioner, is conducting its business in an unauthorized or unsafe manner, the commissioner shall forthwith issue an order, in writing, directing the discontinuance of the unauthorized or unsafe practices.
3. If it appears to the commissioner that the [capital stock or total contributions] stockholders' or members' equity of any bank [have] has been reduced [in value] below the requirements of law, or [of] that the authorized stock has been reduced below the requirements set forth in its articles of incorporation , [or organization,] he shall forthwith issue an order directing [that] the bank to make good the deficiency forthwith or within a time specified in the order.
4. If it appears to the commissioner that [either] the total reserves or reserves on hand of any bank are below the amount required by law to be maintained, or that a bank is not keeping its reserves on hand as required by this Title, he shall forthwith issue an order directing [that] the bank to make good its reserves forthwith, or within the time specified within the order, or that it keep its reserves on hand as required by this Title.
5. If it appears to the commissioner that any bank to which this Title is applicable does not keep its books or accounts in such a manner as to enable the commissioner readily to ascertain its true condition, he shall issue an order requiring the bank, or the officers or managers thereof, or any of them, to open and keep its books or accounts as he may, in his discretion, determine and prescribe for the purpose of keeping accurate and convenient records of the transactions and accounts of the bank.
Sec. 7 NRS 658.151 is hereby amended to read as follows:
658.1511. The commissioner may forthwith take possession of the business and property of any depository institution to which this Title or Title 56 of NRS applies when it appears that the depository institution:
(a) Has violated its charter or any laws applicable thereto.
(b) Is conducting its business in an unauthorized or unsafe manner.
(c) Is in an unsafe or unsound condition to transact its business.
(d) Has an impairment of its [capital stock.] stockholders' or members' equity.
(e) Has refused to pay its depositors in accordance with the terms on which such deposits were received, or has refused to pay its holders of certificates of indebtedness or investment in accordance with the terms upon which [such] those certificates of indebtedness or investment were sold.
(f) Has become otherwise insolvent.
(g) Has neglected or refused to comply with the terms of a [duly issued] lawful order of the commissioner.
(h) Has refused, upon proper demand, to submit its records, affairs and concerns for inspection and examination of [a duly] an appointed or authorized examiner of the commissioner.
(i) Has made a voluntary assignment of its assets to trustees.
2. The commissioner also may forthwith take possession of the business and property of any depository institution to which this Title or Title 56 of NRS applies when it appears that the officers of the depository institution have refused to be examined upon oath regarding its affairs.
Sec. 8 NRS 659.015 is hereby amended to read as follows:
659.015 [Any number of persons, not fewer than three,]
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, [shall] must organize as a banking corporation or company in the manner provided in this Title.
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 this Title; 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 this Title.
Sec. 9 NRS 659.025 is hereby amended to read as follows:
659.025 The articles of incorporation or organization must , in addition to the requirements prescribed in chapters 78 and 86 of NRS, set forth [:
1. The name of the corporation or limited-liability company. No name may be used which is already in use by another corporation or company organized under the laws of this state or of the United States, or so nearly similar thereto as to lead to uncertainty or confusion.
2. The location of its principal office in this state.
3. The nature of its business.
4. The names and post office addresses of subscribers for stock or initial members of the company, and the number of shares subscribed or the amount contributed by each. The aggregate of the subscriptions or contributions is the amount of the capital with which the bank will commence business.
5. The period, if any, limited for the duration of the banking corporation or company.] the nature of the business of the corporation or limited-liability company.
Sec. 10 NRS 659.035 is hereby amended to read as follows:
659.035 1. [The] If the proposed bank is not an existing corporation or limited-liability company, the articles of incorporation or organization [must be signed by a majority of the persons originally organizing the bank, must be proved or acknowledged before a person authorized under the laws of this state to take proof or acknowledgment of deeds, and] 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.
Sec. 11 NRS 659.045 is hereby amended to read as follows:
659.045 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 [into] 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 he 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 [then existing] bank or banks existing in the community [;] at that time;
(d) The name of the proposed banking corporation or company is likely to mislead the public as to its character or purpose; or
(e) The proposed name is the same as the one already adopted or appropriated by an existing bank in this state, or so similar thereto as to be likely to mislead the public.
2. The commissioner shall not make the certification to the secretary of state until he 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 $3,000 for the application and survey must be submitted to the commissioner [at the time] upon filing the articles [are filed] 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.
Sec. 12 NRS 659.065 is hereby amended to read as follows:
659.065 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 [them] the articles or certificate of amendment to be recorded in his office. The secretary of state shall, upon the payment of the organization fees, certify under his official seal [two copies of the articles. One copy must forthwith be filed in the office of the county clerk of the county where the principal office of the bank in this state is to be located. The other] 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 [county clerk of the county in which the articles are recorded, or by 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 [thereby] 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.
Sec. 13 NRS 659.075 is hereby amended to read as follows:
659.0751. Subject to subsection 2, the [capital stock, or contributions, of every] 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 [and the cashier] 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 [, or for an increase of capital,] 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.
Sec. 14 NRS 659.085 is hereby amended to read as follows:
659.085Before the banking corporation or company begins business, it shall file with the commissioner:
1. A statement , under oath by the president [,] or a manager , [or the cashier,] 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 [capital] stock of which each is the owner in good faith and the amount of money paid in on account of the [capital] stock, or the contribution made. Nothing may be received in payment of [capital] stock or contribution [but] except money.
2. Proof that the bank is a member of the Federal Deposit Insurance Corporation.
Sec. 15 NRS 659.095 is hereby amended to read as follows:
659.0951. Upon filing of the statement and proof by the banking corporation or company as required by NRS 659.085, the commissioner shall examine [into] its affairs, ascertain especially the amount of [money paid in on account of its capital,] the initial stockholders' or members' equity, the name and place of residence of each director, the amount of [capital] stock of which each is the owner in good faith or the amount of his 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, he 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.
Sec. 16 NRS 660.025 is hereby amended to read as follows:
660.0251. As used in this section , "service center" is a place where functions of a bank are performed that do not involve the receiving of deposits, making of loans or withdrawals or [the] handling of cash.
2. Banks organized under this Title may establish and maintain one or more service centers within or outside this state according to their needs.
3. A service center may be established by a bank by the vote of its board of directors. The bank shall inform the commissioner in writing of its intention to establish a service center and the location thereof.
4. A service center does not constitute branch banking. No license, certificate or prior approval of the commissioner, of the division of financial institutions or of the department of business and industry is necessary before a service center may be established.
Sec. 17 NRS 660.035 is hereby amended to read as follows:
660.0351. Any bank organized under the laws of this state [possessing a capital and surplus] that has a stockholders' or members' equity of $1,000,000 or more may file an application with the commissioner for permission to establish, upon conditions and under such regulations as may be prescribed by the commissioner, branches in foreign countries or dependencies or singular possessions of the United States for the furtherance of the foreign commerce of the United States [,] and to act, if required to do so, as fiscal agents of the United States.
2. The application must specify:
(a) The name [, capital and surplus] and stockholders' or members' equity of the bank filing it.
(b) The powers applied for.
(c) The place or places where the banking operations are to be carried on.
3. The commissioner may:
(a) Approve or reject [such] the application in whole or in part if for any reason the granting of [such] the application is deemed inexpedient.
(b) From time to time [to] increase or decrease the number of places where [such] the banking operations may be carried on.
4. Every bank operating foreign branches must be required to furnish information concerning the condition of [such] those branches to the commissioner upon demand, and the commissioner may order special examinations of such branches at such time or times as he may deem best.
5. Each bank shall conduct the accounts of each foreign branch independently of the accounts of other foreign branches established by it and of its home office [,] and shall , at the end of each year , transfer to its general ledger the profit or loss accrued at each branch as a separate item.
Sec. 18 Chapter 661 of NRS is hereby amended by adding thereto a new section to read as follows:
1. No distribution may be made by a bank if the distribution would reduce its stockholders' or members' equity below its initial stockholders' or members' equity.
2. As used in this section, "distribution" means a direct or indirect transfer of money or property other than its own shares or interests or the incurrence of indebtedness by a corporation or limited-liability company to or for the benefit of its stockholders or members with respect to any of its shares or interests. A distribution may be in the form of a declaration or payment of a dividend, a purchase, redemption or other acquisition of shares or interests or a distribution of indebtedness, or in any other form.
Sec. 19 NRS 661.015 is hereby amended to read as follows:
661.015 No bank may be:
1. Organized [with a less capital than $250,000, or in such greater amount as may be required by the commissioner, and paid-up surplus of $50,000, or in] unless its initial stockholders' or members' equity is $300,000 or more, or such greater amount as may be required by the commissioner . [, and the] The full amount of the [capital and surplus] initial stockholders' or members' equity of any bank must be paid in cash, exclusive of all organization expenses, except as otherwise provided in this Title, before it may be authorized to commence the business of banking.
2. Organized or authorized to do banking or banking and trust business unless [it is a member in good standing of] its deposit accounts are insured by the Federal Deposit Insurance Corporation.
Sec. 20 NRS 661.025 is hereby amended to read as follows:
661.0251. The [paid-up capital, together with the surplus, undivided profits, capital notes, debentures and reserves for losses] stockholders' or members' equity of any state bank [,] must, subject to the limitations [of] set forth in NRS 661.015, be at least 6 percent of the total deposit liability of the bank as [may be] determined by the commissioner. In determining the amount of [paid-up capital, surplus, undivided profits, capital notes, debentures and reserves for losses] stockholders' or members' equity that will be required, the commissioner shall give due consideration to the character and liquidity of the assets of the bank and to the standards regarding [capital] equity requirements established by other state and federal banking supervising agencies.
2. The commissioner shall, [for the purpose of determining capital] to determine the requirements for stockholders' or members' equity for any state bank, include [capital, surplus,] undivided profits, capital notes, debentures and any reserve for losses . [, and may include as capital 6 percent of the par value of all unpledged United States Government bonds owned by the bank.]
3. The deposit liability for the purposes of this section must be the average of daily deposit liabilities for the preceding 60 calendar days.
4. [Nothing in this section prohibits] This section does not prohibit the acceptance of deposits by any bank while it is proceeding expeditiously, as determined by the commissioner, to comply with the provisions of this section.
Sec. 21 NRS 661.035 is hereby amended to read as follows:
661.035 1. [A banking corporation or company doing business under the provisions of this Title may increase its capital as permitted by law for other corporations or companies.
2.] A banking corporation may, with the approval of the commissioner , [and by the vote of the holders of at least two-thirds of the stock of the particular class or classes of stock entitled to vote on the proposal,] amend its articles of incorporation to authorize an increase or reduction in its authorized [but unissued common stock. Any such authorized increase of stock must be free from preemptive rights.
3. The authorized but unissued stock may be issued from time to time to its officers or employees pursuant to a stock option or stock purchase plan adopted in accordance with this Title.] stock.
2. The commissioner shall not approve an amendment of the articles of incorporation that reduces the authorized stock of the corporation unless he finds that the security of the existing creditors of the corporation will not be impaired.
Sec. 22 NRS 661.055 is hereby amended to read as follows:
661.055[The]
1. Except as otherwise provided in subsection 2, the common stockholders or members of any banking corporation organized after July 1, 1971, or banking company organized on or after October 1, 1995, under the laws of [the State of Nevada] this state shall pay into, in cash, a surplus fund equal to 20 percent of its capital before the bank is authorized to commence business.
2. A thrift company engaged in business pursuant to chapter 677 of NRS that amends its articles of incorporation to organize as a banking corporation pursuant to subsection 2 of NRS 659.015 is not required to pay into a surplus fund before it is authorized to commence business as a banking corporation.
Sec. 23 NRS 661.085 is hereby amended to read as follows:
661.0851. If the [capital] stockholders' or members' equity of any bank has become impaired , [and the surplus and undivided profits of that bank are insufficient to make the impairment good,] the commissioner shall notify the officers and directors of the bank to make the impairment good within [60 days after the notice by an assessment upon the stockholders or members of the bank.] 3 months after receiving notice from the commissioner.
2. The officers and directors of the bank [receiving] who receive the notice shall immediately [call a special meeting of the stockholders for the purpose of making an assessment upon its stockholders, or the managers shall make an assessment upon the members, payable in cash sufficient to cover the impairment of the capital. The assessment must be made unless the capital of the bank is reduced to the extent of the impairment as provided in NRS 661.046.
3. If any stockholder or member neglects or refuses to pay the required assessment, the board of directors or the managers shall, to make good the deficiency, cause a sufficient amount of the capital stock of the stockholder or interest of the member to be sold at public auction, upon 30 days' notice. The notice must be given by posting a notice of the sale in the office of the bank and by publishing the notice in a newspaper in the place where the bank is located, or if there is no newspaper there, then in a newspaper circulating in the county in which the bank is located. The balance, if any, over and above the deficiency, must be returned to the delinquent shareholder or member.
4.] make the impairment good.
3. If, within 3 months after receiving notice from the commissioner, the officers and directors of the bank [fails] fail to make [good the deficiency in its capital,] the impairment good, the commissioner may forthwith take possession of the property and business of the bank until its affairs are finally liquidated as provided by law.
[5. A sale of stock as provided in this section effects an absolute cancellation of any outstanding certificate or certificates evidencing the stock so sold, and the certificate is void. A new certificate must be issued by the bank to the purchaser of any stock for which an outstanding certificate was canceled.
6. The other members of a banking company have the same right of first refusal, and the consequences of not exercising it are the same, as provided in NRS 661.075.]
Sec. 24 NRS 661.105 is hereby amended to read as follows:
661.105 1. [Notwithstanding any other provision of law, any] A banking corporation organized under the laws of this state may, with the approval of the commissioner , [and by vote of shareholders owning a majority of the stock of such corporation, upon not less than 10 days' notice given by registered or certified mail pursuant to action taken by its board of directors,] issue preferred stock of one or more classes, in such amount and with such par value as is approved by the commissioner, [and make such amendments to its articles of incorporation as may be necessary for this purpose; but, in the case of a newly organized banking corporation which has not yet issued common stock, the requirements of notice to and vote of shareholders does not apply.
2. No issue of preferred stock is valid until the par value of all stock so issued is paid in.
3.] unless such an issuance is prohibited by the provisions of chapter 78 of NRS.
2. Any preferred stock lawfully issued by a banking corporation organized under the laws of this state must be included in determining whether [such] the banking corporation has complied with the minimum [capital] requirements for stockholders' equity provided by this Title.
[4. Such preferred stock must in no case be subject to any assessment.
5. The holders of such preferred stock shall not be held individually responsible as such holders for any debts, contract or engagements of such banking corporation, and must not be held liable for assessments to restore impairments in the capital of such corporation.
6. Preferred stock has such voting rights and is subject to retirement in such manner and upon such terms and conditions as may be provided in the articles of incorporation of new banks or amendments to the articles of incorporation of existing banks.
7. No dividends may be declared or paid on common stock until all cumulative dividends on the preferred stock have been paid in full; and if the bank is liquidated, either through voluntary or involuntary proceedings, and if all depositors and creditors are paid in full, then the preferred stockholders must be paid the full par value of their stock, plus all cumulated dividends before any distribution to holders of common stock.]
Sec. 25 NRS 661.115 is hereby amended to read as follows:
661.115 1. [The president and cashier, or the managers, of every bank shall cause to be kept at all times in the banking room where the bank's business is transacted, a full and correct list of the names and places of residence of its stockholders or members, and the number of shares or percentage of interest held by each.
2.] On the [first] fourth Monday in January of each year, a copy of the list [,] of stockholders required to be maintained pursuant to paragraph (c) of subsection 1 of NRS 78.105 or the list of members required to be maintained pursuant to paragraph (a) of subsection 1 of NRS 86.241 must be verified by the oath of the president [or cashier,] or a manager [,] and must be transmitted to the commissioner and [must be] filed in his office for the confidential use of the commissioner.
2. The list of members required to be maintained pursuant to paragraph (a) of subsection 1 of NRS 86.241 must, in addition to the requirements set forth in that section, include the percentage of each member's interest in the company.
Sec. 26 NRS 661.125 is hereby amended to read as follows:
661.1251. As used in this section, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policy of the bank, or a change in the ownership of as much as 25 percent of the outstanding voting stock of , or participating members' interests in , any bank.
2. If there is a change in ownership of [5] 10 percent or more of the outstanding voting stock of or members' interests in any bank, the president or other chief executive officer of the bank shall report the facts to the commissioner within [24 hours] 3 business days after obtaining knowledge of the change.
3. If a loan or loans are made by a bank, and the loan or loans are, or are to be, secured by 10 percent or more of the voting stock of or members' interests in a Nevada bank, the president or other chief executive officer of the bank which makes the loan or loans shall report that fact to the commissioner within 24 hours after obtaining knowledge of the loan or loans, except when the borrower has been the owner of record of the stock for 1 year or more [,] or the stock is of a newly organized bank before its opening.
4. The reports required in subsections 2 and 3 are in addition to any reports required by any other law and must contain whatever information is available to inform the commissioner of the effect of the transaction upon control of the bank whose stock or members' interests are involved, and must contain, when known by the person making the report:
(a) The number of shares or members' interests involved;
(b) The identity of the sellers or transferors and purchasers or transferees of record;
(c) The identity of the beneficial owners of the shares or members' interests involved;
(d) The purchase price;
(e) The total number of shares or members' interests owned by the sellers or transferors and purchasers or transferees of record, both immediately before and after the transaction being reported;
(f) The total number of shares or members' interests owned by the beneficial owners of the shares or members' interests involved, both immediately before and after the transaction being reported;
(g) The identity of borrowers;
(h) The name of the bank issuing the stock securing, or whose members' interests secure, the loan; and
(i) The number of shares or members' interests securing the loan and the amount of the loan or loans.
5. Each bank shall , within 24 hours after there is a change in the chief executive officer or directors of the bank, report the change to the commissioner . [within 24 hours any changes in chief executive officers or directors, including] The bank shall include in its report a statement of the past and current business and professional affiliations of new chief executive officers or directors. [Any] A new chief executive officer shall furnish to the commissioner a complete financial statement [as may be] if required to do so by the commissioner.
6. An application [pursuant to NRS 659.045] must be submitted to the commissioner by the person who acquires stock or members' interests resulting in a change of control of the bank. The application must be submitted on a form prescribed by the division of financial institutions. Except as otherwise provided in subsection 8, the commissioner shall conduct an investigation to determine whether the character, general fitness and responsibility of the applicant is such as to command the confidence of the community in which the bank is located.
7. The bank with which the applicant is affiliated shall pay such a portion of the cost of the investigation as the commissioner requires. All money received by the commissioner pursuant to this subsection must be placed in the investigative account created by NRS 232.545. If the commissioner denies the application, he may forbid the applicant from participating in the business of the bank.
8. A bank may submit a written request to the commissioner to waive an investigation pursuant to subsection 6. The commissioner may grant a waiver if the applicant has undergone a similar investigation by a state or federal agency in connection with the licensing of , or his employment with , a financial institution.
9. As used in this section, "chief executive officer" includes a manager of a limited-liability company.
Sec. 27 NRS 661.165 is hereby amended to read as follows:
661.165 [1.] The board of directors shall meet at least quarterly in regular meeting. At least quarterly, a thorough examination of the books, records, funds and securities held by the bank must be made. The examination may be dispensed with if an annual audit is made of the books, records, funds and securities.
[2. At each meeting of the directors, regular or special, the minutes of the previous meeting must be read and corrected, as may be desired, and thereupon signed by each director present.]
Sec. 28 NRS 661.195 is hereby amended to read as follows:
661.195 Any director, manager, officer or other person who knowingly and intentionally participates in any violation of the laws of this state [relative] relating to banks is liable for all damage which the bank, its stockholders, members, depositors or creditors sustain [in consequence of such] as a result of that violation.
Sec. 29 NRS 661.235 is hereby amended to read as follows:
661.235 1. As used in this section, "net profits" means the remainder of all earnings from operations plus actual recoveries on loans and investments and other assets, after deducting from the total thereof all operating expenses, actual losses, transfers to reserve for loan losses and all federal and state taxes.
2. [Unless a greater dividend or distribution is authorized pursuant to NRS 661.225,] Except as otherwise provided in subsection 3, the directors of any state bank [may, from time to time,] shall not declare a dividend or make a distribution of [so much of] the net profits of the bank [as they judge expedient, except that until the] until:
(a) The surplus fund of [such] the bank equals its [common capital, no dividends or distributions may be declared unless there] initial stockholders' or members' equity, not including its initial surplus fund;
(b) There has first been carried to the surplus fund 10 percent of the previous year's net profit [. No dividends may be paid or distribution made unless the capital and surplus of the bank equal not less than the minimum capital requirements of] ; and
(c) The bank complies with the requirements set forth in NRS 661.025.
3. Except as otherwise provided in section 18 of this act, the directors of a state bank that maintains the insurance of deposits required pursuant to the provisions of the Federal Deposit Insurance Act (12 U.S.C. §§ 1811 et seq.) may declare a dividend or make a distribution of so much of the net profits of the bank as they determine is expedient.
Sec. 30 NRS 662.015 is hereby amended to read as follows:
662.0151. In addition to the powers conferred by law upon private corporations and limited-liability companies, a bank may:
(a) Exercise by its board of directors, managers or authorized officers and agents, subject to law, all powers necessary to carry on the business of banking [, by discounting] by:
(1) Discounting and negotiating promissory notes, drafts, bills of exchange and other evidences of indebtedness [, by receiving deposits, by buying] ;
(2) Receiving deposits;
(3) Buying and selling exchange, coin and bullion ; and [by loaning]
(4) Loaning money on personal security or real and personal property. At the time of making loans, banks may take and receive interest or discounts in advance.
(b) Adopt regulations for its own government not inconsistent with the constitution and laws of this state.
(c) Issue, advise and confirm letters of credit authorizing the beneficiaries to draw upon the bank or its correspondents.
(d) Receive money for transmission.
(e) Establish and become a member of a clearinghouse association and pledge assets required for its qualification.
(f) Exercise any authority and perform all acts that a national bank may exercise or perform, with the consent and written approval of the commissioner. The commissioner may, by regulation, waive or modify a requirement of this Title if the corresponding requirement for national banks is eliminated or modified.
(g) Provide for the performance of the services of a bank service corporation, such as data processing and bookkeeping, subject to any regulations [which may be] adopted by the commissioner.
(h) Unless otherwise specifically prohibited by federal law, sell annuities if licensed by the commissioner of insurance.
2. A bank may purchase, hold and convey real property:
(a) As is necessary for the convenient transaction of its business, including furniture and fixtures, with its banking offices and for future site expansion. This investment must not exceed, except as otherwise provided in this section, 60 percent of its [capital accounts] stockholders' or members' equity, plus subordinated capital notes and debentures. The commissioner may [, in his discretion,] authorize any bank located in a city whose population is more than 10,000 to invest more than 60 percent of its [capital accounts] stockholders' or members' equity, plus subordinated capital notes and debentures , in its banking [houses,] offices, furniture and fixtures.
(b) As is mortgaged to it in good faith by way of security for loans made or money due to the bank.
(c) As is permitted by NRS 662.103.
3. This section does not prohibit any bank from holding, developing or disposing of any real property it may acquire through the collection of debts due it. Any real property acquired through the collection of debts due it may not be held for [a longer time] longer than 10 years. It must be sold at private or public sale within 30 days thereafter. During the time that the bank holds the real property, the bank shall charge off the real property on a schedule of not less than 10 percent per year, or at a greater percentage per year as the commissioner may require.
Sec. 31 NRS 662.065 is hereby amended to read as follows:
662.065 1. As used in this section, "private security" means a marketable obligation in the form of a bond, note or debenture which is commonly regarded as an investment security. It does not include investments which are predominantly speculative in nature.
2. A bank may purchase a private security for its own account when in its prudent banking judgment, which may be based in part upon estimates which it believes to be reliable, it determines that:
(a) There is adequate evidence that the obligor will be able to perform all that it undertakes to perform in connection with the security, including all debt service requirements; and
(b) The security may be sold with reasonable promptness at a price which corresponds reasonably to its fair value.
3. A bank may purchase a private security for its own account, although its judgment with respect to the obligor's ability to perform is based predominantly upon estimates which it believes to be reliable. Although the appraisal of the prospects of any obligor will generally be based in part upon estimates, it is the purpose of this subsection to permit a bank to exercise a broader range of judgment with respect to a more restricted portion of its investment portfolio. This authority may be exercised not only in the absence of a record of performance, but also when there are prospects for improved performance.
4. A bank may , [consider] as a factor in reaching its prudent banking judgment with respect to a private security, consider a ruling published by the commissioner on the eligibility of [such] the private security for purchase. Consideration must be given to the possibility that circumstances on which the ruling was based [,] may have changed since the time of the ruling.
5. Subject to the limitations [of] set forth in NRS 662.155, the investment in any private securities of any one obligor may at no time be more than 25 percent of the [unimpaired capital and permanent surplus of any bank.] stockholders' or members' equity of the bank.
Sec. 32 NRS 662.095 is hereby amended to read as follows:
662.0951. To the same extent that a bank may invest its money in obligations of the United States, a bank may invest its money and may invest the money in its custody or possession which is eligible for investment:
(a) In bonds or notes secured by a mortgage or deed of trust insured or guaranteed by the Federal Housing Administrator or the Department of Veterans Affairs;
(b) In mortgages on real property which have been accepted for insurance by the Federal Housing Administrator or Department of Veterans Affairs; and
(c) In obligations of national mortgage associations or bonds, debentures, consolidated bonds or other obligations of any Federal Home Loan Bank or Banks.
2. A bank may make such loans:
(a) Secured by real property, as the Federal Housing Administrator or Department of Veterans Affairs has insured or has made a commitment to insure, and may obtain such insurance.
(b) As are insured or guaranteed by the Federal Housing Administrator, and on being approved as eligible for credit insurance by the Department of Veterans Affairs, may make such loans as are insured or guaranteed by the Department of Veterans Affairs.
3. Wherever by statute of this state:
(a) Collateral is required as security for the deposit of public money;
(b) Deposits are required to be made with any public officer or department; or
(c) An investment of [capital or surplus,] stockholders' or members' equity, or a reserve or other fund is required to be maintained, consisting of designated securities,
bonds and notes secured by a mortgage or deed of trust insured by the Federal Housing Administrator or Department of Veterans Affairs, debentures issued by the Federal Housing Administrator and obligations of national mortgage associations are eligible for [such] those purposes.
4. No law of this state prescribing the nature, amount or form of security or requiring security upon which loans or investments may be made, prescribing or limiting the rates of time of payment of the interest any obligation may bear, or prescribing or limiting the period for which loans or investments may be made, applies to loans or investments made pursuant to this section.
Sec. 33 NRS 662.099 is hereby amended to read as follows:
662.099 A state bank may purchase for its own account the [capital] stock and other securities of:
1. A development corporation organized under the provisions of chapter 670 of NRS; [and]
2. A corporation for economic revitalization and diversification organized under the provisions of chapter 670A of NRS, if the bank is a member of the corporation, and to the extent of its loan limit established under NRS 670A.200, on the same terms and under the same conditions as a national bank may purchase them [.] ; and
3. Subject to any conditions imposed by the commissioner, a development corporation, a corporation for economic revitalization and diversification, a corporation for community development, or a similar corporation organized in another state if the commissioner determines that the laws pursuant to which the corporation is organized are substantially similar to the provisions of chapter 670 or 670A of NRS.
Sec. 34 NRS 662.103 is hereby amended to read as follows:
662.1031. A bank may invest in real property for development, directly or through partnerships, joint ventures or other indirect methods. Any such investment must not exceed the market value or appraisal of the property as evidenced by a report prepared within 120 days before the investment by a member of a society approved collectively by the commissioner or by another appraiser [so] approved individually [.] by the commissioner. Approval must be based on the independence, experience and training required of or possessed by the appraiser.
2. Within 30 days after such an investment is made, the bank must file with the commissioner:
(a) A certified copy of at least one report of the appraisal of the real property in which the investment is made; and
(b) The report of a title insurance company which contains the transfers of title which occurred during a period of at least 3 years immediately preceding the investment and the amount of consideration, if available, given for each transfer.
3. A bank may not invest in real property for development, exclusive of investments allowed under paragraphs (a) and (b) of subsection 2 of NRS 662.015 and of real property acquired through the collection of debts due to the bank, an amount which exceeds its [capital accounts] stockholders' or members' equity or 10 percent of its assets, whichever is less. The commissioner may require a statement from the bank disclosing whether any director, officer or employee of the bank has a direct or indirect interest in the real property involved or has had any such interest at any time during the preceding 3 years. Ownership of stock in a corporation which has an interest is an interest in the property of the stockholder. Failure to make a required disclosure is unlawful.
Sec. 35 NRS 662.105 is hereby amended to read as follows:
662.105Subject to any applicable regulations of the commissioner, a banking corporation may grant options to purchase, sell or enter into agreements to sell shares of its capital stock to its directors, officers or employees, or [both,] any of them, for a consideration of not less than 100 percent of the fair market value of the shares on the date the option is granted, or, if pursuant to a stock purchase plan, 85 percent of the fair market value of the shares on the date the purchase price is fixed, pursuant to the terms of a plan for the purchase of stock by officers and employees which has been adopted by the board of directors of the bank and approved by a majority of the holders of [at least two-thirds of] the particular class or classes of stock entitled to vote on the proposal and by the commissioner. In no event may the option to purchase such shares be for a consideration less than the par value thereof.
Sec. 36 NRS 662.115 is hereby amended to read as follows:
662.115 A bank may issue capital notes , collateralized debt securities, collateralized debt certificates, or debentures, convertible or otherwise, subject to such regulations as the commissioner may adopt with respect thereto.
Sec. 37 NRS 662.125 is hereby amended to read as follows:
662.125 1. [No] Except as otherwise provided in subsection 2, no bank may make any loan or discount on the security of its own [capital] stock or members' interests, nor be the purchaser or holder of any such shares or interests, unless the [security or purchase] loan, discount, purchase or holding has been approved by the commissioner or is necessary to prevent loss upon a debt previously contracted in good faith.
2. A bank may make a loan or discount on the security of its own stock or members' interests as it deems appropriate if the bank is subject to the reporting requirements set forth in section 12, 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (15 U.S.C §§ 78l, 78m, 78n and 78o(d), respectively) or 12 C.F.R. § 335.
3. Stock or interests [so] purchased or acquired to prevent loss upon a debt previously contracted in good faith must , within [12 months after purchase] 2 years after they are purchased, be sold or disposed of at a public or private sale [.] , unless the commissioner authorizes the bank to hold the stock or interests for a longer period. After the expiration of [12 months,] 2 years or the period authorized by the commissioner, any such stock or interests not [so] sold or disposed of pursuant to this subsection must , except upon the approval of the commissioner, be charged to profit and loss and must not be considered as part of the assets of the bank.
[2.] 4. Any bank may sell or become the owner of any property which may come into its possession as collateral security for any debt or obligation due it, according to the terms of any contract depositing [such] the collateral security . [, and if] If there is no [such contract, then] contract, the collateral security may be sold in the manner provided by law. Any [such] property the bank has in its possession pursuant to this subsection, other than real property , must be sold within 2 years after [acquisition.] it is acquired, unless the commissioner authorizes the bank to hold the property for a longer period.
Sec. 38 NRS 662.135 is hereby amended to read as follows:
662.135 1. Except as otherwise provided in this section and subject to the provisions of NRS 662.065 and 662.125, no bank may make any investment in [capital] the stock or become a member of any other state or national bank.
2. A bank doing business under this Title may subscribe to or purchase, upon such terms as may be agreed upon, the [capital] stock of banks organized under the Act of Congress known as the Edge Act or the [capital] stock of central reserve banks whose [capital] stock exceeds $1,000,000.
3. [In order to] To constitute a central reserve bank as contemplated by this Title, at least 50 percent of the capital stock of [such] the bank must be owned by other banks. The investment by any bank in the capital stock of [such] a central reserve bank or a bank organized under the Edge Act, must at no time exceed 10 percent of the [paid-in capital and permanent surplus] stockholders' or members' equity of the bank making the investment.
4. A bank shall not invest in the stocks or ownership of other corporations, firms, partnerships or companies except as otherwise provided in this Title, unless the investment is made to protect the bank from loss.
5. A bank may invest in the stocks or ownership of other corporations, firms, partnerships or companies as part of a merger, consolidation, combination or acquisition that is authorized pursuant to the provisions of chapter 78, 86 or 92A of NRS, regardless of whether the investment is made to protect the bank from loss.
6. Any stocks or ownership owned or acquired after July 1, 1971, in excess of the limitations imposed by this section must be disposed of at public or private sale within 12 months after the date of acquiring them, and if not so disposed of , they must be charged to profit and loss account, and no longer carried on the books as an asset. The limit of time in which such stocks or ownership is disposed of or charged off the books of the bank may be extended by the commissioner if in his judgment it is for the best interest of the bank that an extension be granted.
[6.] 7. A bank may subscribe to, purchase or become the owner of stock in:
(a) Federal reserve banks as established by Act of Congress approved December 23, 1913, being c. 6, 38 Stat. 251, or any amendment thereof; or
(b) Any governmental agency , Federal Home Loan Bank or liquidating or financial corporation created by the Congress of the United States.
[7.] 8. A bank may invest up to 50 percent of its surplus in the stock or membership of corporations or limited-liability companies engaged in related banking fields.
Sec. 39 NRS 662.145 is hereby amended to read as follows:
662.1451. Subject to the limitations [of] set forth in NRS 662.155, the total outstanding loans of any bank to any person, company, corporation or firm [, including in the loans to any unincorporated company or firm the loans to the several members thereof,] may not at any time exceed 25 percent of the [capital and surplus] stockholders' or members' equity of the bank, actually paid in. The discount of bills of exchange drawn in good faith against actual existing values, as collateral security, and a discount or purchase of commercial or business paper, actually owned by the persons, must not be considered as money loaned.
2. Neither the limitation on loans by banks contained in this section nor any other similar limitations contained in any law of this state relating to banks or banking apply to any loan or loans made by any bank to the extent that they are secured or covered by guarantees or by commitments or agreements to take over or to purchase made by any Federal Reserve Bank or by the United States or any department, bureau, board, commission or establishment of the United States, including any corporation wholly owned, directly or indirectly, by the United States.
3. The commissioner may establish limitations on loans made by a bank to its directors, officers or employees and may establish requirements for the reporting of these loans.
4. The commissioner may adopt regulations necessary to carry out the provisions of this section.
Sec. 40 NRS 662.155 is hereby amended to read as follows:
662.155 1. The combination of investments in private securities provided for in subsection 5 of NRS 662.065 [,] and outstanding loans provided for in subsection 1 of NRS 662.145, of any bank to any one obligor, person, company, corporation or firm, including any unincorporated company or firm and [to the several] the members thereof, [shall] must not at any time exceed 25 percent of the [unimpaired capital and permanent surplus] stockholders' or members' equity of the bank.
2. The commissioner may adopt regulations necessary to carry out the provisions of this section.
Sec. 41 NRS 662.175 is hereby amended to read as follows:
662.175 1. Any bank may secure money deposited with a bank by the United States, the State of Nevada or a political subdivision of this state by pledging acceptable assets of the bank as collateral security.
2. Any bank may borrow money for temporary purposes, not to exceed the amount of its [paid-up capital and surplus,] stockholders' or members' equity, and may pledge any of its assets as collateral security therefor.
3. With the written consent of the commissioner , [and the state board of finance in each instance,] a bank may borrow [to the amount of 50] an amount that is not more than 200 percent in excess of its [paid-up capital and surplus,] stockholders' or members' equity, and pledge assets of the bank as collateral security [therefor.] for the amount borrowed. Any indebtedness contracted in excess of the amount limited in this subsection is void in its entirety.
4. A bank may borrow money from the Federal Home Loan Bank. Money borrowed pursuant to this subsection shall not be deemed borrowed money for the purposes of the limitations prescribed in subsections 2 and 3. A bank may pledge any of its assets as collateral security for money borrowed pursuant to this subsection.
5. The purchase of federal reserve money by a bank from another bank shall be deemed a transfer from a seller's account in a Federal Reserve Bank to the buyer's account [therein, and such] in that bank, and the transfer shall be considered a purchase and sale of [such money. Any such] federal reserve money. Such a transfer does not create an obligation on the part of the buyer subject to NRS 662.145, or a borrowing subject to the limitations of this section, but shall be considered a purchase and sale of [such] federal reserve money.
Sec. 42 NRS 662.205 is hereby amended to read as follows:
662.2051. As used in this section:
(a) "Board of Governors of the Federal Reserve System" means the Board of Governors of the Federal Reserve System created and described in the Federal Reserve Act.
(b) "Federal Reserve Act" means the Act of Congress, approved December 23, 1913, being c. 6, 38 Stat. 251, as amended.
(c) "Federal Reserve Bank" means the Federal Reserve Banks created and organized under authority of the Federal Reserve Act.
(d) "Member bank" means any national bank, state bank or banking and trust company which has become or which becomes a member of one of the Federal Reserve Banks created by the Federal Reserve Act.
2. Any bank organized under the laws of this state may subscribe to the [capital] stock and become a member of a Federal Reserve Bank.
3. Any bank organized under the laws of this state which is, or which becomes, a member of a Federal Reserve Bank is, by this section, vested with all powers conferred upon member banks of the Federal Reserve Banks by the terms of the Federal Reserve Act as fully and completely as if such powers were specifically enumerated and described in this section, and all such powers must be exercised subject to all restrictions and limitations imposed by the Federal Reserve Act, or by regulations of the Board of Governors of the Federal Reserve System made pursuant thereto. The right, however, is expressly reserved to revoke or to amend the powers conferred in this section.
4. A compliance on the part of any such bank with the reserve requirements of the Federal Reserve Act shall be deemed to be a full compliance with those provisions of the laws of this state which require banks to maintain cash balances in their vaults or with other banks, and no such bank need carry or maintain a reserve other than such as is required under the terms of the Federal Reserve Act.
5. Any such bank continues to be subject to the supervision and examinations required by the laws of this state, except that the Board of Governors of the Federal Reserve System may, if it deems necessary, make examinations. The authorities of this state having supervision over such bank may disclose to the Board of Governors of the Federal Reserve System, or to examiners [duly] appointed by it, all information in reference to the affairs of any bank which has become, or desires to become, a member of a Federal Reserve Bank.
Sec. 43 NRS 662.215 is hereby amended to read as follows:
662.215 1. Any bank organized under the provisions of this Title may carry on a savings business as prescribed in this Title.
2. Any bank conducting a savings business may receive deposits on such terms as are authorized by its board of directors.
3. A receipt or a passbook must be issued to each depositor in a bank for all money deposited on open account. The receipt or passbook must contain the rules and regulations adopted by the bank governing the deposit . [or if] If the passbook does not contain those rules and regulations, they must be printed and conspicuously posted in [some] a place accessible and visible to all persons in the business office of the bank, [and] or a copy of the rules and regulations must be [accepted by] provided to the depositor . [, and thereupon shall be deemed agreed to by him.] Payments from the account to the depositor must be made only [upon his written order.] if the depositor authorizes the payments. Banks issuing savings deposit receipts for accounts other than certificates of deposit or passbook accounts shall, not less often than:
(a) Quarterly, for accounts having a balance of $100 or more; or
(b) Annually, for accounts having a balance of less than $100,
deliver or mail to the depositor a statement, showing the balance on deposit in the account and each deposit made by and each payment made to the depositor during the calendar quarter.
4. [Nothing in this Title prohibits] This Title does not prohibit a bank from issuing time certificates of deposit.
Sec. 44 NRS 662.255 is hereby amended to read as follows:
662.255 Subject to the provisions of NRS 104.4303, all banks organized pursuant to the provisions of this Title or doing business in this state must be closed, and no business may be transacted with the public, on [Saturdays,] Sundays or legal holidays, except for the maintenance and operation of mechanical tellers and [for limited services as] other services approved by the commissioner.
Sec. 45 NRS 665.133 is hereby amended to read as follows:
665.1331. The records and information described in [subsection 1 of] NRS 665.130 may be disclosed to:
(a) An agency of the Federal Government or of another state which regulates the financial institution which is the subject of the records or information;
(b) The director of the department of business and industry for his confidential use;
(c) The state board of finance for its confidential use, if the report or other information is necessary for the state board of finance to perform its duties under this Title;
(d) An entity which insures or guarantees deposits;
(e) A public officer authorized to investigate criminal charges in connection with the affairs of the depository institution;
(f) A person preparing a proposal for merging with or acquiring an institution or holding company, but only after notice of the disclosure has been given to the institution or holding company;
(g) Any person to whom the subject of the report has authorized the disclosure;
(h) Any other person if the commissioner determines, after notice and opportunity for hearing, that disclosure is in the public interest and outweighs any potential harm to the depository institution and its [shareholders,] stockholders, members, depositors and creditors; and
(i) Any court in a proceeding initiated by the commissioner concerning the financial institution.
2. All the reports made available pursuant to this section remain the property of the division of financial institutions, and no person, agency or authority to whom the reports are made available, or any officer, director or employee thereof, may disclose any of the reports or any information contained therein, except in published statistical material that does not disclose the affairs of any natural person or corporation.
Sec. 46 NRS 665.135 is hereby amended to read as follows:
665.135In making the examinations [as] required by this Title, the commissioner and any appointed examiner may administer oaths to examine any officer, director, manager, agent, employee, customer, depositor, [shareholder] stockholder or member of the bank, or any other person [or persons,] touching the affairs and business of the bank being examined. Any examiner may summon in writing any officer, director, manager, agent, employee, customer, depositor, [shareholder] stockholder or member, or any other person [or persons] who is a resident of this state, to appear before him and testify in relation to the affairs and business of [such] the bank.
Sec. 47 NRS 665.165 is hereby amended to read as follows:
665.1651. Every state bank shall retain its business records for such periods as are or may be prescribed by or in accordance with the terms of this section.
2. Each state bank shall retain permanently the minute books of meetings of its stockholders and directors, any analogous formal proceedings of its members or managers, its capital stock ledger and [capital] stock certificate ledger or stubs, its general ledger, its investment ledger, its copies of bank examination reports, and all records which the commissioner in accordance with this section requires to be retained permanently.
3. All other bank records must be retained for such periods as the commissioner may in accordance with this section prescribe.
4. The commissioner shall, from time to time, [issue] adopt regulations classifying all records kept by state banks and prescribe the period for which records in each class must be retained. The periods may be permanent or for a lesser term of years. The commissioner shall keep such regulations current and shall review them at least once every 3 years. In issuing and revising such regulations, the commissioner shall consider:
(a) Actions at law and administrative proceedings in which the production of bank records [might] may be necessary or desirable.
(b) State and federal statutes of limitation applicable to such actions or proceedings.
(c) The availability of information contained in bank records from other sources.
(d) Such other matters as the commissioner [considers pertinent in order that his] deems pertinent to ensure that the regulations will require banks to retain their records for as short a period as is commensurate with the interests of bank customers and [shareholders] stockholders or members and of the people of this state in having bank records available.
5. Any state bank may dispose of any record which has been retained for the period prescribed by or in accordance with the terms of this section for retention of records of its class, and thereafter is under no duty to produce the record in any action or proceeding.
6. Any state bank may cause any or all records required to be kept pursuant to this section to be reproduced by the microphotographic process, optical disk imaging or any other equivalent technique designed to ensure an accurate reproduction of the original. Any such reproduction has the same effect as the original. Upon completion of such a duplication, the original of any record may be destroyed.
7. To the extent that they are not in contravention of any law of the United States, the provisions of this section apply to all banks doing business in this state.
Sec. 48 Chapter 666 of NRS is hereby amended by adding thereto a new section to read as follows:
1. A Nevada depository institution or its holding company that acquires an out-of-state depository institution, a Nevada depository institution that is the resulting depository institution after merging with an out-of-state depository institution, or a Nevada depository institution that otherwise establishes or acquires a branch outside of this state, may, in accordance with applicable state and federal law:
(a) Continue to operate the out-of-state depository institution or branch;
(b) Convert any existing main office or branch outside of this state into a branch of the Nevada depository institution;
(c) Establish or acquire additional branches of the Nevada depository institution in any state where the out-of-state institution could have done so if it had not been acquired or merged;
(d) Continue or establish its principal office or principal place of business outside this state notwithstanding the provisions of NRS 660.015 and 662.245; and
(e) Exercise any power and engage in any activity outside of this state to the same extent as the out-of-state depository institution could have if it had not been acquired or merged, even if the Nevada depository institution is not authorized to exercise those powers or engage in those activities in this state.
2. Except as otherwise provided in paragraph (d) of subsection 1, a branch outside this state of a Nevada depository institution shall comply with, and have all rights and powers prescribed in, the laws of this state relating to depository institutions.
3. This section does not affect the authority of the commissioner to examine, supervise and regulate a Nevada depository institution operating or seeking to operate a branch outside this state.
Sec. 49 NRS 666.003 is hereby amended to read as follows:
666.003"Control" means the power, directly or indirectly, to:
1. Direct or exercise a controlling influence over the management or policies of a depository institution or the election of a majority of the directors or trustees of an institution; or
2. Vote:
(a) Twenty percent or more of any class of voting securities of a depository institution if exercised by a natural person; or
(b) More than [5] 10 percent of any class of voting securities of a depository institution if exercised by a person other than a natural person.
Sec. 50 NRS 666.015 is hereby amended to read as follows:
666.015 1. With the approval of the commissioner, a Nevada depository institution may merge or consolidate with, or transfer its assets and liabilities to, another Nevada depository institution, an out-of-state depository institution or an out-of-state holding company.
2. [Application to] An application filed with the commissioner for approval of the merger, consolidation or transfer must be on a form prescribed by the commissioner and must include:
(a) A nonrefundable fee of $3,000 for the application. The depository institution [shall] must 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.
(b) Certified copies of the [minutes of all proceedings had] resolutions adopted by the directors and stockholders or the managers and members of the depository institution or the stockholders of the holding company regarding the merger, consolidation or transfer. The minutes of the proceedings [had] conducted by the stockholders or members of each depository institution or the stockholders of each holding company and the resolutions adopted by them, if any, must set forth that holders of at least [two-thirds] a majority of the stock or members' interests voted in the affirmative on the proposition of merger, consolidation or transfer. The [minutes] resolutions must also contain or have attached thereto a complete copy of the [agreement made and entered into between the depository institutions or with the holding company, with reference to the merger, consolidation or transfer.] plan of merger.
(c) Information which the commissioner requires to make the findings specified in subsection 7.
3. When a completed application has been filed, the commissioner shall conduct an investigation of each depository institution to determine:
(a) Whether the interests of the depositors, creditors and stockholders or members of each depository institution are protected.
(b) That the merger, consolidation or transfer is in the public interest.
(c) That the merger, consolidation or transfer is made for legitimate purposes.
(d) Whether each depository institution has a good record of compliance with the Community Reinvestment Act of 1977 (12 U.S.C. §§ 2901 to 2905, inclusive).
4. The commissioner's approval or rejection of the merger, consolidation or transfer must be based upon his investigation. The expense of the investigation must be paid by the depository institutions.
5. Notice of the merger, consolidation or transfer must be published once [a] each week for 4 consecutive weeks, before or after the merger, consolidation or transfer is effective at the discretion of the commissioner, in a newspaper published in a city, town or county in which each of the depository institutions is located, and a certified copy of the notice must be filed with the commissioner.
6. The commissioner shall issue his written decision within 60 days after receiving a completed application. The commissioner may approve the application subject to any terms and conditions which he considers necessary to protect the public interest.
7. The commissioner shall disapprove an application if he finds that:
(a) The proposed transaction would be detrimental to the safety and soundness of the applicant, to any institution which is a party to the transaction or to a subsidiary or affiliate of any such institution;
(b) The applicant [,] or its executive officers, directors, managers, principal stockholders or members have not established a record of sound performance, efficient management, financial responsibility and integrity so that it would be against the interest of the depositors, other customers, creditors, [shareholders] stockholders or members of an institution, or the general public to authorize the proposed transaction;
(c) The financial condition of the applicant or any other institution which is a participant in the proposed transactions might jeopardize the financial stability of the applicant or other institution, or prejudice the interests of depositors or other customers of the applicant or other institutions;
(d) The consummation of the proposed transaction will tend to lessen competition substantially, unless [he] the commissioner finds that the anticompetitive effects of the proposed transaction are clearly outweighed by the benefit of accommodating the convenience and needs of the relevant market to be served; or
(e) The applicant has not established a record of meeting the needs for credit of the communities which it or its subsidiary depository institution serves.
8. [In any] If a merger, consolidation or transfer [, all rights of creditors and all liens upon any property of the constituent depository institutions must be preserved unimpaired, limited in lien to the property affected by those liens immediately before the time of the merger, consolidation or transfer. All debts, liabilities and duties of the respective constituent depository institutions must thenceforth attach to the surviving, consolidated or transferee depository institution and may be enforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.
9. In the case of a merger, consolidation or transfer pursuant to the provisions of this section, if any stockholder or member of any constituent depository institution votes against the agreement, objects to the agreement in writing at or before the taking of the vote thereon, and, within 20 days after the date on which the agreement is filed as provided in this section, demands in writing from the surviving or consolidated depository institution payment for his shares or interest, the surviving, consolidated or transferee depository institution shall, within 30 days thereafter, pay to the stockholder or member the fair cash value of his shares or interest as of the day before the vote on the agreement of merger, consolidation or transfer was taken, exclusive of any element of value arising from the expectation or accomplishment of the merger, consolidation or transfer.
10.] is approved pursuant to this section, the property and liabilities of the constituent depository institutions must be treated in the manner prescribed in NRS 92A.250 .
9. A Nevada depository institution authorized pursuant to this section to merge or consolidate with, or transfer its assets and liabilities to, an out-of-state depository institution or an out-of-state holding company shall comply with the laws of all states in which it is authorized to operate.
Sec. 51 NRS 666.035 is hereby amended to read as follows:
666.035 1. A state bank may, with the approval of the commissioner, consolidate, convert into or merge with a national bank upon the vote of the holders of not less than two-thirds of each class of voting stock of, or of the members' interests in, the state bank.
2. The commissioner shall not approve any consolidation, conversion or merger under this section which would:
(a) Result in a monopoly or which would further any attempt to monopolize the business of banking in this state; or
(b) Substantially lessen competition or be in restraint of trade, unless the commissioner finds that the anticompetitive effects of the proposed transaction are clearly outweighed by the probable success of the transaction in meeting the needs of the community to be served.
In every case, the commissioner shall consider the financial and managerial resources and the future prospects of the company or companies and the banks concerned, and the convenience and the needs of the community to be served.
3. Except as otherwise provided in subsection 5, the rights and liabilities of a state bank which consolidates, converts into or merges with a national bank, and the rights and liabilities of [its] the stockholders or members [,] of the state bank, are the same as the rights and liabilities prescribed by the law of the United States for national banks and their stockholders or members at the time of the consolidation, conversion or merger.
4. Upon consolidation, conversion or merger, the resulting national bank becomes the same business as each consolidating, converting or merging bank, with all the property rights, power and duties of each consolidating, converting or merging bank, except as affected by the law of the United States and by the charter and bylaws of the resulting bank. Any reference to a consolidating, converting or merging bank in any writing, whether executed or which takes effect before or after the consolidation, conversion or merger, is applicable to the resulting bank if not inconsistent with the other provisions of that writing.
5. The holders of shares of the stock of, or members' interests in, a state bank which were voted against a consolidation or merger into a national bank are entitled to receive their value in cash, if and when the consolidation or merger becomes effective, upon written demand made to the resulting national bank at any time within 30 days after the effective date of the consolidation or merger, accompanied by the surrender of any stock certificate or certificates. The value of the shares or interests must be determined, as of the date of the meeting of the stockholders or members approving the consolidation or merger, by three appraisers [, one] to be selected as follows:
(a) One by the owners of two-thirds of the dissenting shares or interests involved
[, one] ;
(b) One by the board of directors of the resulting national bank [, and the third by the two so chosen.] ; and
(c) One by the appraisers chosen pursuant to paragraphs (a) and (b).
The valuation agreed upon by any two appraisers governs. If the appraisal is not completed within 90 days after the consolidation or merger becomes effective, the Comptroller of the Currency shall cause an appraisal to be made.
6. The amount fixed as the value of the shares of stock of, or members' interests in, the consolidating or merging bank at the time of the meeting of the stockholders or members approving the consolidation or merger, and the amount fixed by the appraisal as provided by subsection 5, where the fixed value is not accepted, constitute a debt of the resulting national bank.
7. Upon the completion of the consolidation, conversion or merger, the license to operate as a state bank automatically terminates.
Sec. 52 NRS 666.075 is hereby amended to read as follows:
666.0751. There is a rebuttable presumption that a company which directly or indirectly owns, controls or has the power to vote less than [5] 10 percent of the voting stock of, or members' interests in, a bank does not control the bank.
2. An estate, trust, guardianship or conservatorship is not by virtue of its ownership or control of stock of, or members' interests in, a bank, a bank holding company unless it is:
(a) A business trust; or
(b) A voting trust which by its terms or by law does not expire within 10 years after the date of its establishment.
3. A company is not a bank holding company by virtue of its ownership or control of stock or a member's interest which:
(a) Was acquired in the ordinary course of securing or collecting a debt which the company previously contracted in good faith; and
(b) Is held only as long as is necessary to sell the stock on a reasonable basis.
Sec. 53 NRS 666.315 is hereby amended to read as follows:
666.3151. [Application to] An application filed with the commissioner for approval must be on a form prescribed by the commissioner and must include:
(a) A nonrefundable fee of $3,000 for the application. The depository institution or holding company [shall] must 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.
(b) Information which the commissioner requires to make the findings specified in subsection 4.
(c) Unless the applicant is a resident of Nevada, a corporation organized in this state or a foreign corporation admitted to do business in this state, a written consent to service of process on a resident of this state in any action arising out of the applicant's activities in this state.
2. In reviewing the application, the commissioner shall consider the applicant's record of compliance with the Community Reinvestment Act of 1977 (12 U.S.C. §§ 2901 to 2905, inclusive) and whether the proposed transaction will meet the needs of those counties whose populations are less than 100,000 and whose residents are not being adequately served by existing financial institutions.
3. The commissioner shall issue his written decision within 60 days after receiving a completed application. The commissioner may approve the application subject to any terms and conditions which he considers necessary to protect the public interest.
4. The commissioner shall disapprove an application if he finds:
(a) That the proposed transaction would be detrimental to the safety and soundness of the applicant, to any institution which is a party to the transaction, or to a subsidiary or affiliate of that institution;
(b) The applicant [,] or its executive officers, directors or principal stockholders have not established a record of sound performance, efficient management, financial responsibility and integrity so that it would be against the interest of the depositors, other customers, creditors or [shareholders] stockholders of an institution, or the public to authorize the proposed transaction;
(c) The financial condition of the applicant or any other institution which is a participant in the proposed transaction might jeopardize the financial stability of the applicant or other institution, or prejudice the interests of depositors or other customers of the applicant or other institutions;
(d) The consummation of the proposed transaction will tend to lessen competition substantially, unless the commissioner finds that the anticompetitive effects of the proposed transaction are clearly outweighed by the benefit of meeting the convenience and needs of the relevant market to be served; or
(e) The applicant has not established a record of meeting the needs for credit of the communities which it or its subsidiary depository institution serves.
Sec. 54 NRS 666.375 is hereby amended to read as follows:
666.375The commissioner may not authorize or require any transaction pursuant to NRS 666.355 involving an out-of-state depository institution or an out-of-state holding company, unless he finds that:
1. The acquiring or merging depository institution or holding company has demonstrated an acceptable record of meeting the needs for credit of the communities which it serves; and
2. The acquiring or merging depository institution or holding company has a record of sound performance, adequate [capital,] stockholders' or members' equity, financial capacity and efficient management so the acquisition or merger will not jeopardize the financial stability of the acquired or merged depository institution and will not be detrimental to the interests of depositors, creditors or other customers of the depository institution, or to the public.
Sec. 55 NRS 666.400 is hereby amended to read as follows:
666.400 1. Subject to the provisions of NRS 666.410, 666.415 and 666.420, and after approval of the commissioner pursuant to NRS 666.315, an out-of-state depository institution or its holding company may acquire control of, acquire all or substantially all of the assets of, or merge with, a Nevada depository institution or its holding company.
2. An out-of-state depository institution or holding company that acquires a Nevada depository institution, or an out-of-state depository institution that is the resulting depository institution after merging with a Nevada depository institution, or an out-of-state depository institution that otherwise establishes or acquires a branch in Nevada, may , [do any of the following] in accordance with applicable state and federal law:
(a) Continue to operate the Nevada depository institution or branch;
(b) Convert any existing main office or branch in Nevada into a branch of the out-of-state depository institution;
(c) Establish or acquire additional branches of the out-of-state depository institution in any state where the Nevada depository institution could have done so had it not been acquired or merged; and
(d) Exercise any power and engage in any activity in this state to the same extent as a depository institution of the same [class] type whose home state is Nevada [.] , even if the out-of-state depository institution is not authorized to exercise those powers or engage in those activities in the out-of-state depository institution's home state.
3. A branch in this state of an out-of-state depository institution shall comply with [the law] :
(a) If the branch is not a federally chartered institution, the applicable laws relating to depository institutions of the institution's home state, including, without limitation, provisions relating to the names of depository institutions; or [comply with federal law in the case of]
(b) If the institution is a federally chartered institution [.] , the provisions of federal law.
4. If the laws of this state as a host state conflict with the laws of another state as a home state, the laws of the home state prevail , except that [:
(a) The] the commissioner may, by regulation, order that Nevada law prevail over that of the home state if the application of Nevada law is necessary to preserve the safe and sound operation of the branch or otherwise protect the residents of this state . [; and
(b) The laws of this state regarding protection of customers, fair lending and intrastate branching apply to a branch in this state of an out-of-state depository institution to the same extent as those laws apply to a branch in this state of a depository institution chartered by this state.
4.] 5. This section does not affect the authority of the commissioner to examine, supervise and regulate an out-of-state depository institution operating or seeking to operate a branch in this state or to take any action or issue any order with regard to that branch pursuant to NRS 666.325.
Sec. 56 NRS 666.405 is hereby amended to read as follows:
666.405 1. Except as otherwise provided in this section, an out-of-state depository institution without a branch in Nevada, or an out-of-state holding company without a depository institution in Nevada, may acquire a Nevada depository institution and convert the institution to a branch of the out-of-state depository institution or depository institution of the out-of-state holding company. If the Nevada depository institution is chartered after September 28, 1995, the Nevada depository institution may be so acquired only if it has been in existence for at least 5 years.
2. For the purposes of [this subsection, a] subsection 1:
(a) A depository institution chartered solely for the purpose of acquiring another depository institution [is considered] shall be deemed to have been in existence for the same period as the depository institution to be acquired, [so] as long as [it] the acquiring depository institution does not open for business at any time before the acquisition.
[2.] (b) A depository institution that was originally chartered as a corporation or limited-liability company other than a depository institution shall be deemed to have been in existence for the period since a certificate of amendment of its articles of incorporation or organization was filed pursuant to NRS 659.015 to reorganize the corporation or limited-liability company as a depository institution.
(c) If a Nevada depository institution becomes the successor in interest to the business of an out-of-state depository institution without a branch in this state or to an out-of-state holding company without a branch in this state that previously acquired a Nevada depository institution, the commissioner shall include the period of existence of the original Nevada depository institution when determining the period of existence of the successor Nevada depository institution.
3. If the commissioner considers it necessary to protect depositors, creditors and other customers of a failing depository institution or a failing holding company which controls a depository institution, he may authorize the acquisition of the institution or company by, or its merger with, another institution or company regardless of the duration of existence of the failing depository institution or failing holding company.
[3.] 4. The restriction set forth in subsection 1 does not apply to an acquisition of, or merger between, affiliated depository institutions.
Sec. 57 NRS 666A.150 is hereby amended to read as follows:
666A.1501. Except as otherwise provided in this chapter or in regulations adopted by the commissioner, a foreign bank operating at a state branch or agency has the same rights, privileges and powers as a Nevada bank at the same location, including the eligibility to exercise fiduciary powers, and is subject to the same duties, restrictions, penalties, liabilities, conditions and limitations that would apply under the laws of this state to a Nevada bank doing business at the same location, but:
(a) A state branch may not accept [,] from citizens or residents of the United States [,] deposits other than credit balances that are incidental to or arise out of its exercise of other lawful banking powers, but it may accept deposits from persons who are [neither citizens nor residents] not citizens or residents of the United States;
(b) A state agency may not accept any deposits from citizens or residents of the United States other than credit balances that are incidental to or arise out of its exercise of other lawful banking powers, but it may accept deposits from persons who are [neither citizens nor residents] not citizens or residents of the United States; and
(c) A state branch or agency is not required to maintain federal deposit insurance and the commissioner may, by regulation or order, exclude or exempt uninsured state branches or agencies from, or otherwise modify the applicability to uninsured state branches or agencies of, any law or regulation of this state that is generally applicable to insured Nevada banks, or that would otherwise be applicable to an insured Nevada bank doing business at the same location, taking into account applicable limitations on the privileges of state branches and agencies and on their power to take retail deposits.
2. Any limitation or restriction based on the [capital stock and surplus] stockholders' or members' equity of a Nevada bank shall be deemed to refer, as applied to a state branch or agency, to the dollar equivalent of the [capital stock and surplus] stockholders' or members' equity of the foreign bank, and if the foreign bank has more than one state branch or agency in this state, the business transacted by all the state branches and agencies must be aggregated in determining compliance with the limitation.
3. The commissioner may adopt such additional, or modify the applicability of any existing, standards, conditions or requirements, by regulation, as he deems necessary to ensure the safety and soundness and the protection of creditors of the operations of branches and agencies of foreign banks in this state.
Sec. 58 NRS 667.015 is hereby amended to read as follows:
667.015 1. [A] Except as otherwise provided in this section, a bank may go into voluntary liquidation [and be closed, and may surrender its charter and franchise as a corporation of this state by the affirmative votes of its stockholders owning two-thirds of its stock, or of its members holding two-thirds of the members' interests. The vote must be taken at a meeting of the stockholders called by resolution of the board of directors, or at a meeting of the members called by the managers. Written notice of the meeting, which notice must state the purpose of the meeting, must be mailed to each stockholder or member, or in case of his death, to his legal representative or heirs at law, addressed to his last known residence 10 days before the date of the meeting.] pursuant to the provisions of NRS 78.580 or 86.491.
2. If the voluntary liquidation of the bank results from a vote or agreement of the stockholders or members [decide to liquidate] of the bank, a certified copy of all proceedings of the meeting at which that action is taken, verified by the oath of the president or a manager , [and the cashier,] must be transmitted to the commissioner for his approval. If the commissioner approves the liquidation, he shall issue to the bank, under his seal, a permit for that purpose. No permit may be issued by the commissioner until he is satisfied that provision has been made by the bank to satisfy and pay off all depositors and all creditors of the bank. If he is not satisfied, the commissioner shall not issue a permit, but he may take possession of the bank, its assets and business, and liquidate the bank in the manner provided by this chapter.
3. When the commissioner approves the voluntary liquidation of a bank [,] pursuant to subsection 2, the directors or managers of the bank shall cause to be published , in a newspaper in the city, town or county in which the bank is located, a notice that the bank is closing its affairs and going into liquidation, and that its depositors and creditors are to present their claims for payment.
4. When any bank is in the process of voluntary liquidation, it is subject to examination by the commissioner, and the bank shall furnish such reports, from time to time, as may be called for by the commissioner.
5. All unclaimed deposits and dividends remaining in the hands of the bank are subject to the provisions of this chapter.
6. Any bank that is in the process of voluntary liquidation may sell and transfer to any other state or national bank all or any portion of its assets of every kind upon such terms as may be agreed upon and approved by the commissioner and by [two-thirds] a majority vote of the bank's board of directors or of its managers. A certified copy of the minutes of any meeting at which that action is taken, under the oath of the president or a manager , [and the cashier, together with] and a copy of the contract of sale and transfer [,] must be filed with the commissioner.
7. If a voluntary liquidation or the sale and transfer of the assets of any bank is approved by the commissioner, a certified copy of that approval under seal of the commissioner, filed in the office of the secretary of state, authorizes the cancellation of the articles of incorporation or organization of the bank, subject to its continued existence, as provided by law.
Sec. 59 NRS 667.095 is hereby amended to read as follows:
667.095 All books, papers and records of a bank which has been finally liquidated must be deposited by the receiver in the office of the [county clerk of the county in which the office of the bank is located, or in such other place as in his judgment will provide for the proper safekeeping and protection of those books, papers and records. The books, papers and records must be held subject to the orders of the commissioner and the county clerk of the county in which the bank was located.] commissioner.
Sec. 60 NRS 667.105 is hereby amended to read as follows:
667.105 1. [Subject to the provisions of subsection 3, after the expiration of 10 years from the date of filing in the office of the county clerk of a final order approving the liquidation of any insolvent bank and the delivery to the county clerk or into his custody of the records of that bank, the records may be destroyed by the county clerk by burning them in the presence of the county recorder and the sheriff of the county, who shall join with the county clerk in the execution of a certificate as to the destruction of the records. The certificate must be filed by the county clerk in the court records of the liquidation of the insolvent bank.
2. Subject to the provisions of subsection] Except as otherwise provided in subsections 2 and 3, after the expiration of 10 years from the filing by the commissioner of a final report of liquidation of any insolvent bank, the commissioner, with the consent of the state board of finance, may destroy [, by burning,] the records of any insolvent bank held in the office of the commissioner in connection with the liquidation of the bank . [; but if]
2. If there are any unpaid dividends of the insolvent bank , the commissioner shall preserve the deposit ledger or other evidence of indebtedness of the bank which refers to the unpaid dividends until the dividends have been paid.
3. [Neither the county clerk of any county nor the] The commissioner may not destroy any of the formal records of liquidation [, nor may the commissioner destroy] or any of the records made in his office with reference to the liquidation of any insolvent bank.
Sec. 61 NRS 667.115 is hereby amended to read as follows:
667.115 [When]
1. Except as otherwise provided in subsection 2, if any bank created under the laws of this state [, which] has been or is appointed trustee in any indenture, deed of trust or other instrument of like character, executed to secure the payment of any bonds, notes or other evidences of indebtedness, is taken over for liquidation by the commissioner, by the Federal Deposit Insurance Corporation or by any other legally constituted authority, the powers and duties of the bank as trustee cease upon the entry of an order of the district court appointing a successor trustee pursuant to a petition as provided for in NRS 667.125 to 667.185, inclusive.
2. If an indenture, deed of trust or other instrument of like character that appoints a bank as trustee pursuant to subsection 1 includes a provision which provides for the appointment of a successor trustee if the bank is taken over for liquidation, the powers and duties of the bank as trustee cease upon being taken over by the commissioner, the Federal Deposit Insurance Corporation or any other legally constituted authority and the successor trustee named in the instrument immediately assumes the duties as trustee without appointment by the district court pursuant to NRS 667.125 to 667.185, inclusive.
Sec. 62 NRS 667.125 is hereby amended to read as follows:
667.125 In all cases to which subsection 1 of NRS 667.115 is applicable, the district court for the county in which such indenture, deed of trust or other instrument of like character is recorded shall, upon the verified petition of any person interested in any such trust, either as trustee, beneficiary or otherwise, which interest [shall] must be set out in the petition, issue its order directing service on all interested parties, [either] personally or by the publication in [some] a newspaper published in the county, or in some adjoining county if no newspaper is published in the county where [such] the application is made, of a notice directed to all persons concerned, commanding and requiring all persons having any interest in [such] the trust, to appear in court on a day designated in the order and notice, not less than 30 days [from] after the date of the order and notice, to show cause why a new trustee should not be appointed.
Sec. 63 NRS 667.225 is hereby amended to read as follows:
667.2251. When any bank is authorized to dissolve [,] and has taken the necessary steps to effect dissolution in accordance with the laws of this state or the laws of the United States, but before actual dissolution, a majority of the directors or managers of the national or state bank, upon authority in writing of the owners of two-thirds of its [capital] stock or two-thirds of the members' interests and with the approval of the commissioner, may execute articles of incorporation or organization as provided in this Title for the organization of a new bank. The articles must further set forth the authority derived from the stockholders or members of the national or state bank.
2. Upon the filing of articles of incorporation or organization in the same manner as provided for the organization of new banks, the reorganized bank is a bank under the laws of this state. Upon reorganization, all assets, real and personal, of the dissolved national or state bank, by operation of law, vest in and become the property of the reorganized state bank, subject to all liabilities of the national or state bank existing before the reorganization.
Sec. 64 NRS 668.075 is hereby amended to read as follows;
668.075A bank or an officer or manager of a bank shall not advertise in any manner or publish any statement of the [capital] stock authorized or subscribed, unless the amount of [capital] stock actually paid up is advertised or published [therewith.] with the advertisement or statement.
Sec. 65 NRS 669.100 is hereby amended to read as follows:
669.100No trust company may be organized or operated with a [capital] stockholders' equity of less than [$250,000,] $300,000, or in such greater amount as may be required by the commissioner . [, and paid-up surplus of $50,000, or in such greater amount as may be required by the commissioner.] The full amount of the [capital and surplus] initial stockholders' equity must be paid in cash, exclusive of all organization expenses, before the trust company is authorized to commence business.
Sec. 66 NRS 669.120 is hereby amended to read as follows:
669.1201. The articles of incorporation must contain:
(a) The corporate name adopted by the corporation, which must be such as to distinguish it from any other trust company formed or incorporated in this state, or engaged in the trust business in this state.
(b) The place where its business is to be conducted.
(c) The purpose for which it is formed.
(d) The amount of its [capital] stock, which must be divided into shares of the par value of not less than [$25 each, except that upon the written approval of the commissioner the capital stock may be divided into shares of the par value of not less than] $1 each.
(e) The amount of [capital stock] its initial stockholders' equity, which must not be less than [$250,000, and must be assessable.
(e) The amount of its original paid-in surplus, which must not be less than 20 percent of its capital stock.] $300,000.
(f) The name and place of residence of, and the number of shares subscribed by, each stockholder.
(g) The number of directors, which must not be less than five, and the names of the stockholders selected to act as the first board of directors, each of whom must be a bona fide subscriber for at least $1,000 of the stock of the bank, fully paid and not hypothecated.
(h) The location of all branch offices as approved by the commissioner.
(i) Such other matters, not inconsistent with law, as the incorporators [may deem proper.] deem appropriate.
2. The articles of incorporation may also provide for [the] :
(a) The issuance and sale of preferred stock in such amount as is fixed by the articles or by amendments thereto [, and the] ;
(b) The amount and number of shares [thereof, and the] of preferred stock; and
(c) The terms and conditions [thereof] of the issuance and sale, which must not be inconsistent with the provisions of this chapter.
Sec. 67 NRS 669.130 is hereby amended to read as follows:
669.1301. The secretary of state shall issue a certificate in the form provided by law for other corporations, and the existence of the trust company as a corporation [dates from] begins upon the issuance of the certificate by the secretary of state, from which time it has and may exercise the powers conferred by law upon corporations generally, except as those powers are limited or modified by this chapter.
2. The trust company shall not transact [no] business, except the election of officers [,] and the taking and approving of their official bonds, [and] the receipt of payments on account of the subscriptions of the [capital stock,] stock and such other business as is incidental to its organization, until it is authorized by the commissioner to commence the trust company business as provided in this chapter.
Sec. 68 NRS 669.160 is hereby amended to read as follows:
669.1601. Within 60 days [following the filing of] after the application for a license is filed, the commissioner shall investigate the facts of the application and the other requirements of this chapter to determine:
(a) That the persons who will serve as directors or officers are qualified by character and experience.
(b) That the financial status of the stockholders, directors and officers is consistent with their responsibilities and duties.
(c) That the name of the proposed company is not deceptively similar to [that] the name of another trust company licensed in this state or is not otherwise misleading.
(d) That the [capital and surplus are] initial stockholders' equity is not less than the required minimum.
(e) The need for trust facilities or additional trust facilities in the community where the proposed trust company is to be located.
(f) Such other matters concerning the proposed trust company in relation to its location as the commissioner may deem relevant.
2. Within 90 days after the application is filed, the commissioner shall conduct a public hearing to consider the application. At least 30 days before the hearing, the commissioner shall give written notice of the hearing to all persons doing a trust business in the community in which the proposed trust company is to be located and to such other persons, institutions or organizations as he [may see fit.] deems appropriate.
Sec. 69 NRS 669.190 is hereby amended to read as follows:
669.1901. The initial fee to be paid for a trust company license must be in proportion to the [authorized capitalization] initial stockholders' equity of the trust company as follows:
(a) A trust company [having a capitalization of $250,000 and up to and including $500,000 shall] with an initial stockholders' equity of not less than $300,000 but not more than $500,000 must pay a license fee of $500.
(b) A trust company [having a capitalization of] with an initial stockholders' equity of more than $500,000 [and up to and including $1,000,000 shall] but not more than $1,000,000 must pay a license fee of $750.
(c) A trust company [having a capitalization] with an initial stockholders' equity of more than $1,000,000 [shall] must pay a license fee of $1,000.
2. In addition , every trust company [shall] must pay an initial license fee of $100 for each branch office that [may be] is authorized by the commissioner.
3. Thereafter, every trust company [shall] must pay annually on or before April 1 of each year a license fee which must be in proportion to its [authorized or existing capitalization (capital plus paid-in surplus plus undivided profits), whichever is higher,] existing stockholders' equity as follows:
(a) A trust company [having a capitalization of $250,000 and up to and including $500,000 shall] with an existing stockholders' equity of not less than $300,000 but not more than $500,000 must pay a license fee of $500.
(b) A trust company [having a capitalization] with an existing stockholders' equity of more than $500,000 [and up to and including $1,000,000 shall] but not more than $1,000,000 must pay a license fee of $750.
(c) A trust company [having a capitalization] with an existing stockholders' equity of more than $1,000,000 [shall] must pay a license fee of $1,000.
4. All money collected under the provisions of this section must be paid into the state general fund , and the state treasurer shall issue a receipt therefor.
Sec. 70 NRS 669.220 is hereby amended to read as follows:
669.2201. Every trust company:
(a) Shall keep all trust funds and investments separate from the assets of the company, and all investments made by the company as a fiduciary must be designated so that the trust or estate to which the investments belong may be clearly identified.
(b) Holding trust funds awaiting investment or distribution may deposit or leave those funds on deposit [such funds] with a state or national bank. [Such] The funds must not be deposited or left with the same corporation depositing them or leaving them on deposit, [nor] or with a corporation or association holding or owning a majority of the [capital] stock of the trust company making or leaving the deposit, unless that corporation or association first pledges, as security for the deposit, securities eligible for investment by state banks which have a market value equal to that of the deposited funds. No security is required with respect to any portion of [such deposits which] the deposits that is insured under the provisions of any law of the United States.
(c) Acting in any capacity under a court trust or private trust, unless the instrument creating the trust provides otherwise, may cause any securities held by it in its representative capacity to be registered in the name of a nominee or nominees of the company.
(d) When acting as depositary or custodian for the personal representative of a court trust or private trust, unless the instrument creating the trust provides otherwise, may with the consent of the personal representative of the trust, cause any securities held by it to be registered in the name of a nominee or nominees of the company.
2. Every trust company is liable for any loss occasioned by the acts of its nominees with respect to securities registered under this section.
3. No corporation or the registrar or transfer agent of the corporation is liable for registering or causing to be registered on the books of the corporation any securities in the name of any nominee of a trust company or for transferring or causing to be transferred on the books of the corporation any securities registered by the corporation in the name of any nominee of a trust company when the transfer is made on the authorization of the nominee.
4. Except as otherwise provided in subsection 5, a trust company's investments must:
(a) Be governmental obligations or insured deposits.
(b) Mature within 3 years after acquisition.
The aggregate market value of all investments must equal or exceed 60 percent of the company's current [capital, surplus and undivided profits] stockholders' equity or 60 percent of the company's [capital and surplus when it was organized,] initial stockholders' equity, whichever is greater.
5. A trust company may purchase or rent land and equipment for use in the daily activities of the company.
Sec. 71 NRS 670.080 is hereby amended to read as follows:
670.080The articles of incorporation of the corporation must contain:
1. The name of the corporation, which must include the words "development corporation."
2. The location of the principal office of the corporation, but the corporation may have other offices as the board of directors deems necessary [, but all offices of the corporation must be] if those offices are located in this state.
3. The purposes for which the corporation is founded, which must be:
(a) To assist, encourage, develop and advance the business prosperity and economic welfare of this state;
(b) To encourage and assist in the location of new business and industry in this state and to rehabilitate existing business and industry;
(c) To stimulate and assist in the expansion of all kinds of business activity which will tend to promote the business development and maintain the economic stability of this state, provide maximum opportunities for employment, encourage thrift and improve the standard of living of the [citizens] residents of this state;
(d) To cooperate and act in conjunction with other organizations, public or private, the objects of which are the promotion and advancement of industrial, commercial, agricultural and recreational developments in this state; and
(e) To furnish money and credit to approved and deserving applicants, for the promotion, development and conduct of all kinds of business activity in this state, thereby establishing a source of credit not otherwise readily available [therefor.] for those purposes.
4. The names and post office addresses of the members of the first board of directors, who, unless otherwise provided by the articles of incorporation or the bylaws, shall hold office for the first year of existence of the corporation or until their successors are elected and have qualified.
5. Any provision which the incorporators may choose to insert for the regulation of the business and for the conduct of the affairs of the corporation and any provision creating, dividing, limiting and regulating the powers of the corporation, the directors, stockholders or any class of the stockholders, including , but not limited to , a list of the officers, and provisions governing the issuance of stock certificates to replace lost or destroyed certificates, except that no provision may be included for cumulative voting for directors.
6. The amount of authorized [capital] stock and the number of shares into which it is divided, the par value of each share and the amount of [capital] stockholders' equity with which the corporation will commence business and, if there is more than one class of stock, a description of the different classes . [; the]
7. The names and addresses of the preorganization subscribers of stock and the number of shares subscribed by each. The aggregate of the subscription is the minimum amount of [capital] stockholders' equity with which the corporation may commence business , which may not be less than $500,000.
[7.] 8. Any provision consistent with the laws of this state for the regulation of the corporation.
[8.] 9. A recitation that the corporation is organized under the provisions of this chapter.
Sec. 72 NRS 670A.080 is hereby amended to read as follows:
670A.080The articles of incorporation of the corporation must contain:
1. The name of the corporation, which must include the words "corporation for economic revitalization and diversification."
2. The location of the principal office of the corporation, but the corporation may have other offices as the board of directors deems necessary.
3. The purposes for which the corporation is founded, which must be to:
(a) Assist, promote, encourage, develop and advance the economic welfare and diversification of the state in accordance with the state plan for economic development;
(b) Facilitate and assist in the location of new business, commerce and industry in the state, and to rehabilitate and revitalize existing business, commerce and industry;
(c) Stimulate and assist in the expansion of business activity which will tend to promote business development and diversification that would result in the economic stability of the state;
(d) Provide new opportunities for employment;
(e) Cooperate and act in conjunction with public or private organizations and governmental agencies, the objectives of which are the support and advancement of business, commercial, industrial, agricultural and recreational activity that would advance the economic welfare of the state, promote economic diversification, and effectuate any state or local plan for economic development; and
(f) Furnish money and credit to approved and deserving applicants who would assist in achieving or carrying out any of the purposes described in this subsection.
4. The names and post office addresses of the members of the first board of directors, who, unless otherwise provided by the articles of incorporation or the bylaws, shall hold office for the first year of existence of the corporation or until their successors are elected and have qualified.
5. Any provision which the incorporators may choose to insert for the regulation of the business and for the conduct of the affairs of the corporation and any provision creating, dividing, limiting and regulating the powers of the corporation, the directors, stockholders or any class of the stockholders, including , but not limited to , a list of the officers, and provisions governing the issuance of stock certificates to replace lost or destroyed certificates, except that no provision may be included for cumulative voting for directors.
6. The amount of authorized [capital] stock and the number of shares into which it is divided, the amount of [capital] stockholders' equity with which the corporation will commence business and, if there is more than one class of stock, a description of the different classes . [; the]
7. The names and addresses of the preorganization subscribers of stock and the number of shares subscribed by each.
[7.] 8. Any provision consistent with the laws of this state for the regulation of the corporation.
[8.] 9. A recitation that the corporation is organized under the provisions of this chapter.
Sec. 73 NRS 670A.200 is hereby amended to read as follows:
670A.2001. Each member shall lend money to the corporation as and when called upon by it to do so, but the total amount on loan by any member at any one time must not exceed the limits described in subsections 2 and 3, to be determined as of the time the financial institution or insurer becomes a member. The amount may thereafter be readjusted annually if any change in the base of the loan limit of the member occurs.
2. The loan limits are, for:
(a) Banks and stock insurance companies, 2 percent of [capital and surplus, or surplus fund, as the case may be.] the stockholders' equity of the bank or company.
(b) Savings and loan associations, 2 percent of the surplus account.
(c) Mutual insurance companies, 2 percent of surplus to policyholders.
(d) Other financial institutions and insurance companies, and Nevada corporations described in NRS 670A.190, [as] an amount established by the board of directors.
3. Except as otherwise provided in this subsection , the total amount on loan by any member at any one time must not exceed $250,000. Any member who has a loan limit in excess of $250,000, may elect that its total amount on loan at any one time to the corporation equal its loan limit, but in no event may it exceed $500,000.
4. All loan limits must be established at the thousand dollar figure nearest to the amount computed on an actual basis.
Sec. 74 NRS 670A.230 is hereby amended to read as follows:
670A.2301. The [capital] stock of the corporation must be 20,000 shares of no par value, which must be issued for $100 per share in cash. At least 5 percent of the [capital stock] stockholders' equity of the corporation must be paid into its treasury in cash before it may transact any business other than [such as relates] business relating to its organization.
2. At least a majority of the [capital] stock of the corporation must at all times be held by residents of the state or by persons engaged in doing business in Nevada.
3. A financial institution which does not become a member of a corporation established under this chapter may not acquire any shares of the [capital] stock of the corporation.
4. Except as otherwise provided in this subsection, any financial institution which becomes a member of a corporation established under this chapter may acquire, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of any shares of the [capital] stock of the corporation [,] and , while the owner of those shares, may exercise all the rights, powers and privileges of ownership, including the right to vote thereon, all without the approval of any regulatory authority of this state. The amount of the [capital] stock of the corporation which may be acquired by any member under this section may not exceed 10 percent of the loan limit of the member. The amount of [capital] stock of the corporation which any member may acquire under this section is in addition to the amount of [capital] stock in corporations which the member is otherwise authorized to acquire.
5. The holders of [capital] stock of the corporation do not, as such, have any preemptive or preferential right to purchase or subscribe for any part of the unissued or new issue of [capital] stock of the corporation, whether now or hereafter authorized or issued, or to purchase or subscribe for any bonds or other obligations, whether or not convertible into stock of the corporation, now or hereafter authorized or issued.
Sec. 75 NRS 670A.240 is hereby amended to read as follows:
670A.2401. The corporation shall set apart as an earned surplus all of its net earnings in each year until the earned surplus equals the [total of the paid-in capital and paid-in surplus] stockholders' equity then outstanding. The earned surplus must be held in cash, invested in United States government bonds, or as provided in the corporation's bylaws, and be kept and used to meet losses and contingencies of the corporation , and [,] whenever the amount of earned surplus becomes impaired, it must be built up again to the required amount in the manner provided for its original accumulation.
2. At no time may the total obligations of the corporation exceed ten times the amount of its [paid-in capital and surplus,] stockholders' equity, not including therein the earned surplus, or $50 million, whichever is greater.
3. The corporation shall not deposit any of its money in any financial institution unless the financial institution has been designated as a depository by a vote of the majority of all of the directors of the corporation, exclusive of any director who is an officer or director of the designated depository . [so designated.] The corporation shall not receive money on deposit [. The corporation shall not] or make any loans directly or indirectly to any of its officers or to any firms in which any of its officers is a member or officer.
Sec. 76 NRS 78.020 is hereby amended to read as follows:
78.0201. Insurance companies, mutual fire insurance companies, surety companies, express companies and railroad companies may be formed under this chapter, but such a corporation may not:
(a) Transact any such business within this state until it has first complied with all laws concerning or affecting the right to engage in such business.
(b) Infringe the laws of any other state or country in which it may intend to engage in business, by so incorporating under this chapter.
2. No trust company, savings and loan association, thrift company or corporation organized for the purpose of conducting a banking business may be organized under this chapter.
Sec. 77 Chapter 677 of NRS is hereby amended by adding thereto the provisions set forth as sections 78 and 79 of this act.
Sec. 78 "Stockholders' equity" means the capital, surplus and retained earnings of a licensee.
Sec. 79 The provisions of chapters 78 and 92A of NRS that are not in conflict with this chapter are hereby adopted as part of this chapter.
Sec. 80 NRS 677.020 is hereby amended to read as follows:
677.020As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 677.030 to 677.140, inclusive, and section 78 of this act have the meanings ascribed to them in those sections.
Sec. 81 NRS 677.150 is hereby amended to read as follows:
677.150 [When] If authorized by the commissioner, as provided in this chapter, a corporation may be formed [by three or more persons] in accordance with the laws of this state to engage in business under this chapter.
Sec. 82 NRS 677.190 is hereby amended to read as follows:
677.190The commissioner shall not approve the application unless he ascertains to his satisfaction:
1. That the public convenience and advantage will be promoted by the establishment of the proposed corporation.
2. That the corporation is being formed for no other purpose than the legitimate objectives contemplated by this chapter.
3. That the proposed capital structure is adequate.
4. That the financial responsibility, character and general fitness of the proposed officers, directors, [shareholders] stockholders and other investors are such as to command the confidence of the community and to warrant belief that the business will be operated honestly and fairly within the purpose of this chapter, and that the proposed officers and directors have sufficient banking, industrial loan or other experience, ability and standing to afford reasonable promise of successful operation.
5. That the applicant has complied with all the applicable provisions of this chapter.
Sec. 83 NRS 677.200 is hereby amended to read as follows:
677.200 [1. Except in the case of a merger between an out-of-state depository institution and a Nevada depository institution or an out-of-state depository institution that otherwise establishes or acquires a branch in Nevada pursuant to the provisions of chapter 666 of NRS, all officers and a majority of the directors of a corporation formed to engage in business under this chapter must be residents of this state.
2.] The president of the corporation must have not less than 10 [years'] years of experience in a regulated financial institution in this state, or in any other state or the District of Columbia. The manager of the principal office and any branch office must have not less than 2 [years'] years of experience in a regulated financial institution in this state, or in any other state or the District of Columbia.
Sec. 84 NRS 677.210 is hereby amended to read as follows:
677.210 The [paid-in capital] stockholders' equity of any corporation formed to do business under this chapter [shall] must not be less than [$250,000. In addition, such corporation shall have as its capital surplus, 20 percent of its paid-in capital and shall have as its undivided profit 10 percent of its paid-in capital, plus additional capital of] $325,000, plus an additional $25,000 for each of its branch [office.] offices.
Sec. 85 NRS 677.241 is hereby amended to read as follows:
677.241 Subject to the prior approval of the commissioner, a licensee may, by a majority vote of its board of directors:
1. Enter into a contract, incur an obligation and perform other acts necessary to obtain a membership or other benefit that is available to a thrift company or its customers, stockholders, conservators, receivers or liquidators pursuant to the provisions of:
(a) The Federal Deposit Insurance Act (12 U.S.C. §§ 1811 et seq.); or
(b) The National Housing Act (12 U.S.C. §§ 1701 to 1743, inclusive) . [; or
(c) A contract of insurance obtained by a licensee pursuant to paragraph (c) of subsection 1 of NRS 677.247.]
2. Subscribe for and acquire any stock, debentures, bonds or other types of securities of the Federal Deposit Insurance Corporation.
Sec. 86 NRS 677.243 is hereby amended to read as follows:
677.243 1. Each licensee [must] shall maintain a record that includes for each employee:
(a) His full name;
(b) The address of each place at which he has resided during the previous 10 years;
(c) The name and address of each employer during the previous 10 years;
(d) A recent photograph of the employee measuring 3 by 5 inches; and
(e) Any alias used by the employee.
2. A licensee may comply with the provisions of subsection 1 by maintaining the employee identification information required pursuant to 26 C.F.R. Part 31.
3. The information contained in [this] the record required pursuant to this section must be provided to the commissioner upon his request , but is otherwise confidential.
Sec. 87 NRS 677.245 is hereby amended to read as follows:
677.2451. Unless the licensee has received a written waiver from the commissioner, the total amount of money that [it] the licensee has advanced or committed for the real property that it has developed or constructed may not exceed twice the sum of its [capital, surplus, undivided profits, reserve for loans, reserve for federal insurance] stockholders' equity and any other reserves [specified] required by the commissioner.
2. If a licensee acquires title to any real property pursuant to the provisions of subsection 1 of NRS 677.630, the deed or other document representing the transaction must be recorded [immediately.] within a reasonable time after the acquisition of that property.
3. An account must be established for the acquired property with a separate subsidiary ledger or other appropriate record. The amount carried in the account must be the sum of the unpaid principal balance of any loan made by the licensee that was secured by the foreclosed property plus the cost of the foreclosure less any advance payments held in the account for loans in progress at the time of acquisition, together with:
(a) Any amount paid after acquisition for taxes on the property that accrued before the acquisition;
(b) Assessments that are due or delinquent at the time of acquisition;
(c) Any other costs of acquisition; and
(d) The cost of insurance on the property.
4. The subsidiary ledger or other appropriate record must indicate as to each property:
(a) The type and character of the property;
(b) All the capitalized items of investment and their cost; and
(c) The account number of the former loan or contract of sale.
Sec. 88 NRS 677.247 is hereby amended to read as follows:
677.247 [1.] An applicant for an authorization to engage in the business regulated pursuant to this chapter must obtain:
[(a)] 1. The insurance of deposits provided pursuant to the provisions of the Federal Deposit Insurance Act (12 U.S.C. §§ 1811 et seq.);
[(b)] or
2. The insurance of deposits provided pursuant to the provisions of the National Housing Act (12 U.S.C. §§ 1701 to 1743, inclusive) . [; or
(c) A contract for the insurance of deposits which is issued by a private insurer approved by the commissioner and the commissioner of insurance pursuant to NRS 677.249. Such a contract must be approved by the commissioner and the commissioner of insurance. The issuance of a contract of insurance is not transacting insurance for the purposes of Title 57 of NRS.
2. An applicant must first attempt to obtain the insurance of deposits provided pursuant to the provisions of the Federal Deposit Insurance Act (12 U.S.C. §§ 1811 et seq.) or the National Housing Act (12 U.S.C. §§ 1701 to 1743, inclusive) before obtaining a contract of insurance. The commissioner and the commissioner of insurance shall not approve a contract of insurance for an applicant unless they are satisfied that the reasons why the applicant has not obtained insurance under those provisions do not indicate that the protection intended to be afforded to the depositors by this act will be substantially impaired.
3. The commissioner and the commissioner of insurance shall not approve a contract of insurance unless the protection afforded thereby to the depositors is substantially equivalent to the protection afforded by the Federal Deposit Insurance Corporation to the depositors of the accounts that it insures.]
Sec. 89 NRS 677.250 is hereby amended to read as follows:
677.250 When authorized by the commissioner as provided in this chapter, a licensee, pursuant to a resolution of its board of directors, may establish and maintain one or more branch offices within or outside the state.
Sec. 90 NRS 677.270 is hereby amended to read as follows:
677.2701. The commissioner shall not approve an application for a branch office until he has ascertained to his satisfaction that the facts set forth in the application are true and:
(a) That [the] public convenience and advantage will be promoted by the establishment of the proposed branch office.
(b) That the licensee has the [capital] stockholders' equity required by this chapter.
2. The commissioner must give his approval or denial for [a branch] an application for a branch office to the licensee within 45 days [from] after the date of application to open a branch office unless the commissioner gives notice within the original 45-day period that he is extending the period for decision for a [term] period not to exceed an additional 45 days.
Sec. 91 NRS 677.400 is hereby amended to read as follows:
677.400 1. Annually, on or before May 15, unless the commissioner grants a written extension, each licensee shall file with the commissioner a report of operations of the licensed business for the preceding calendar year.
2. The report must give information with respect to the financial condition of the licensee [and include balance] , including, without limitation:
(a) Balance sheets at the beginning and end of the year [,] ;
(b) A statement of income and expenses for the period [,] ;
(c) A reconciliation of the surplus or net worth with the balance sheets [,] ;
(d) A schedule of the assets used and useful in the licensed business [,] ;
(e) The size of loans [,] and an analysis of charges, including the monthly average number and amount of loans outstanding [,] ;
(f) An analysis of delinquent accounts [,] ;
(g) Any court actions undertaken to effect collection [, and any] ; and
(h) Any further statistical information reasonably prescribed by the commissioner.
3. The report must be made under oath and be in the form prescribed by the commissioner.
4. If any person or affiliated group holds more than one license in [the] this state, that person or group may file a composite annual report, if a short form of report applicable to each licensed office accompanies the report.
5. A licensee may comply with the provisions of this section by filing with the commissioner a copy of the annual audit report filed by the licensee with the Federal Deposit Insurance Corporation pursuant to 12 U.S.C. § 1831m.
Sec. 92 NRS 677.420 is hereby amended to read as follows:
677.4201. A licensee shall [immediately] notify the commissioner of any change in the ownership of [5] 10 percent or more of the outstanding voting stock of the licensee [.] within 3 business days after the licensee has knowledge of the change.
2. An application for approval must be submitted to the commissioner by a person who acquires:
(a) At least 25 percent of a licensee's outstanding voting stock; or
(b) Any outstanding voting stock of a licensee if the change will result in a change in the control of the licensee.
Except as otherwise provided in subsection 4, the commissioner shall conduct an investigation in accordance with NRS 677.180. If the commissioner denies the application, he may forbid the applicant from participating in the business of the licensee.
3. The licensee with which the applicant is affiliated shall pay such a portion of the cost of the investigation as the commissioner requires. All money received by the commissioner pursuant to this subsection must be placed in the investigative account created by NRS 232.545.
4. A licensee may submit a written request to the commissioner to waive an investigation pursuant to subsection 2. The commissioner may grant a waiver if the applicant has undergone a similar investigation by a state or federal agency in connection with the licensing of or his employment with a financial institution.
Sec. 93 NRS 677.540 is hereby amended to read as follows:
677.540 Whenever it appears to the commissioner that:
1. The [capital] stockholders' equity of any licensee is [impaired;] less than its initial stockholders' equity;
2. Any licensee has violated its articles of incorporation or any law of this state;
3. Any licensee is conducting its business in an unsafe or unauthorized manner;
4. Any licensee refuses to submit its books, papers and affairs to the inspection of any examiner;
5. Any officer of any licensee refuses to be examined upon oath touching the concerns of the licensee;
6. Any licensee has suspended payment of its obligations;
7. Any licensee is in a condition that it is unsound or unsafe for it to transact business;
8. Any licensee neglects or refuses to observe any order of the commissioner made pursuant to this chapter unless the enforcement of the order is restrained in a proceeding brought by the licensee;
9. Any licensee has accepted deposits in violation of the provisions of this chapter; or
10. Any fact or condition exists which, if it had existed at the time of the original application for authority to organize and establish a corporation to engage in business under this chapter , it reasonably would have warranted the [commissioner in disapproving] disapproval of the application [,] by the commissioner,
the commissioner may forthwith take possession of the property and business of the licensee and retain possession until it resumes business or its affairs are finally liquidated as provided in this chapter. The licensee, with the consent of the commissioner, may resume business upon such conditions as [he] the commissioner may prescribe.
Sec. 94 NRS 677.590 is hereby amended to read as follows:
677.590 [This]
1. Except as otherwise provided in subsection 2, this chapter does not permit a licensee to issue thrift certificates.
2. A licensee who maintains a branch office located outside this state may issue thrift certificates and any other securities that are permitted to be issued by a licensee pursuant to the laws of the state in which the branch office is located.
Sec. 95 NRS 677.600 is hereby amended to read as follows:
677.600 A licensee shall not deposit any of its money with any other moneyed corporation, unless that corporation has been designated as a depository by a majority vote of the directors or the executive committee, exclusive of any director who is an officer, director or trustee of the depository so designated. Such a depository must be a federally insured financial institution [licensed to do business in this state] or any Federal Reserve Bank.
Sec. 96 NRS 677.620 is hereby amended to read as follows:
677.620 1. Except as otherwise provided in subsections 2 and 3, a licensee shall not have at any time deposits in an aggregate sum in excess of 10 times the aggregate amount of its [paid-up and unimpaired capital and unimpaired surplus.] stockholders' equity.
2. A licensee insured by the Federal Deposit Insurance Corporation shall comply with the limits imposed by that insurer [.] , if any.
3. If a licensee has operated under this chapter for 1 year or more and during its most recent fiscal year has been profitable, the commissioner may increase the ratio of deposits to [paid-up and unimpaired capital and unimpaired surplus] stockholders' equity prescribed in subsection 1 to not more than the greatest net worth to savings ratio permitted for any savings and loan association operating in this state. The commissioner shall give his approval or denial of the application for an increased ratio to the licensee in writing with supporting reasons within 30 days after the date of the application submitted by the licensee unless the commissioner gives notice within the original 30-day period that he is extending the period for decision for a [term] period not to exceed an additional 30 days. The commissioner may, for reasonable cause, decrease the ratio [permitted] authorized under this subsection at any time, but not below the ratio prescribed in subsection 1.
4. A licensee may not have total borrowings, exclusive of deposits, which exceed the larger of:
(a) Five times its [capital and surplus;] stockholders' equity; or
(b) The face amount of total deposits at the time a borrowing is made.
5. [Except as otherwise provided in subsection 6, each licensee shall establish a liquidity reserve immediately upon beginning business, as a special account with an initial balance of $50,000. Money cannot be withdrawn from the reserve or the account put to any other use without the permission of the commissioner. Money in the reserve may be invested only in obligations of the United States, this or any other state, or federally insured financial institutions in this state or any Federal Reserve Bank. At least annually, but no later than at the end of each fiscal year of the licensee, an amount equal to 1 percent of the licensee's deposits must be added to the reserve until its balance reaches 1.5 percent of the net deposits. Interest earned on the principal of the reserve must not be withdrawn except as permitted for other money of the reserve, but may be credited against the required addition.
6. If the deposits of a licensee are insured pursuant to the provisions of NRS 677.247, the licensee need not maintain a liquidity reserve.] A licensee may borrow money from a Federal Home Loan Bank. Money borrowed pursuant to this subsection shall not be deemed borrowed money for the purposes of the limitations prescribed in subsection 4. A licensee may pledge any of its assets as collateral security for money borrowed pursuant to this subsection.
Sec. 97 NRS 677.630 is hereby amended to read as follows:
677.6301. A licensee may purchase, hold, develop and convey real property, including apartments and other buildings, for the following purposes only:
(a) Real property conveyed to it in satisfaction of debts contracted in the course of its business.
(b) Real property purchased at sale under judgments, decrees or mortgage foreclosures or foreclosures of or trustees' sales under deeds of trust, or pursuant to an order of a bankruptcy court. A licensee shall not bid against its debtor at any such sale in a larger amount than is necessary to satisfy its debt and costs.
(c) Real property necessary as premises for the transaction of its business. A licensee shall not invest directly or indirectly an amount exceeding one-third of its [paid-up capital and surplus] stockholders' equity in the lot and building in which the business of the company is carried on, furniture and fixtures, and vaults, necessary and proper to carry on its business.
(d) Real property purchased or held for the purpose of development. An investment for this purpose must not exceed the market value of the property as evidenced by an appraisal prepared by a member of the American Institute of Real Estate Appraisers, the National Association of Review Appraisers and Mortgage Underwriters, the Society of Real Estate Appraisers or the Independent Fee Appraisers Society [, or by] or an appraiser approved by the commissioner. Within 120 days after the investment is made:
(1) The licensee shall provide the commissioner with a certified copy of one or more appraisal reports and a report from a title insurer which shows , for not less than the immediately preceding 3 years, the chain of title and the amount of consideration for which the title was transferred, if that information is available . [, for at least 3 years.]
(2) The commissioner may require a statement from the licensee disclosing whether any director, officer or employee of the licensee has, or has had within the [last] immediately preceding 3 years, any direct or indirect interest in the property. For the purposes of this subparagraph, "interest" includes ownership of stock in a corporation which has an interest in the property.
If the total amount to be invested in real property for residential development, excluding any real property which is mortgaged to the licensee as security for money owing to the licensee, exceeds the [licensee's capital accounts,] stockholders' equity of the licensee, the investment may not be made without the written approval of the commissioner. Any person who fails to make a disclosure required by this section is guilty of a misdemeanor.
2. No real estate acquired pursuant to paragraph (a) or (b) of subsection 1 may be held for a longer period than 5 years unless it has been improved by the licensee and is producing a fair income based upon the appraised value.
Sec. 98 NRS 677.650 is hereby amended to read as follows:
677.650 1. Except as otherwise provided in subsection 2, a licensee shall not directly or indirectly make any loan to, or purchase a contract or chose in action from:
(a) A person who is an officer, director or holder of record or beneficiary of 10 percent or more of the shares of the licensee ; [.]
(b) A person in which an officer, director or holder of record or beneficiary of 10 percent or more of the shares of the licensee directly or indirectly is financially interested [.] ; or
(c) A person who acquired the contract directly or indirectly or through intervening assignments from a person described in paragraph (a) or (b) [.] ,
unless the licensee has been authorized by the commissioner to make that loan or purchase that contract or chose in action from that person.
2. Loans may be made to an officer, director or [shareholder] stockholder of the licensee, upon collateral of his deposits with the licensee, of not more than 90 percent of the amount of his deposits, at the same rates of interest and under the same terms as loans secured by deposits are offered to members of the general public.
3. Any officer, director or [shareholder] stockholder of a licensee who [directly or indirectly] :
(a) Knowingly and intentionally makes or procures or participates in making or procuring , directly or indirectly, a loan or contract in violation of this section [or knowingly approves such] ; or
(b) Knowingly approves a loan or contract in violation of this section,
is personally liable for any loss resulting to the licensee from the loan or contract, in addition to any other penalties provided by law.
Sec. 99 NRS 677.660 is hereby amended to read as follows:
677.660 1. A person shall not advertise, print, display, publish, distribute or broadcast or cause or permit to be advertised, printed, displayed, published, distributed or broadcast, in any manner, any statement or representation with regard to the rates, terms or conditions for making or negotiating loans, or with regard to deposits, which is false, misleading or deceptive.
2. Except as otherwise provided in this subsection, a licensee shall not use any advertising or make any representations which indicate, imply or might lead a person to believe that it is a bank, a thrift company or a savings bank, unless it is insured by the Federal Deposit Insurance Corporation. The provisions of this subsection do not apply to a thrift company that does not accept money for deposit.
3. A licensee whose deposits are insured by the Federal Deposit Insurance Corporation [or a private insurer] shall include that information in its advertising relating to deposits.
Sec. 100 NRS 677.730 is hereby amended to read as follows:
677.730 [1.] A licensee may lend any amount of money:
[(a)] 1. At any rate of interest;
[(b)] 2. Subject to the imposition of any charge in any amount; and
[(c)] 3. Upon any schedule of repayment,
to which the parties may agree.
[2. Secured loans or obligations of $50,000 or more other than those secured by deposits with the licensee must be secured by collateral having a market value of at least 115 percent of the amount due on the loans or obligations. On loans secured by deposits with the licensee, the net amount advanced must not exceed 90 percent of the amount of the deposits used as collateral.]
Sec. 101 NRS 677.760 is hereby amended to read as follows:
677.760 1. A licensee shall not lend in the aggregate more than [5] 10 percent of its [capital and surplus not available for dividends upon:
1.] stockholders' equity upon:
(a) The security of the stock of any one corporation, which stock , except as otherwise provided in subsection 2, may not exceed 10 percent of the outstanding stock of that corporation . [except that, if the licensee has obtained other security from the borrower which satisfies the provisions of subsection 2 of NRS 677.730, the licensee may accept as security any amount of the stock of that corporation.
2.] (b) The security of the bonds of any one obligor except:
[(a)] (1) Bonds of the United States or for the payment of which the credit of the United States is pledged;
[(b)] (2) Bonds of the State of Nevada, or for the payment of which the credit of the State of Nevada is pledged; and
[(c)] (3) Bonds which are general obligations of any county, city, metropolitan water district, school district or irrigation district of the State of Nevada.
2. The stock of a corporation upon the security of which a licensee loans money pursuant to paragraph (a) of subsection 1 may exceed 10 percent of the outstanding stock of that corporation if:
(a) The licensee has secured collateral, other than deposits with the licensee, which has a market value of not less than 115 percent of the amount loaned; or
(b) The loans are secured by deposits with the licensee and the amount of the money loaned does not exceed 90 percent of the deposits used as collateral.
Sec. 102 NRS 677.770 is hereby amended to read as follows:
677.770 [1. Except for a licensee that is insured by the Federal Deposit Insurance Corporation, a licensee shall not make an unsecured loan of more than one-tenth of 1 percent of its total assets or make loans that are in the aggregate more than 5 percent of its total assets.
2.] Secured loans or obligations of any one person as primary obligor made or held by a licensee may not, in any event, exceed in the aggregate 25 percent of the [capital and surplus] stockholders' equity of the licensee. Loans secured by deposits with the licensee must not be included in applying this limitation.
Sec. 103 NRS 677.800 is hereby amended to read as follows:
677.800Any person and the [several] members, officers, directors, agents and employees thereof who [shall] knowingly and intentionally violate or participate in the violation of any provision of this chapter [is] are guilty of a misdemeanor, unless a greater penalty is provided in this chapter.
Sec. 104 NRS 661.046, 661.095, 661.145, 661.155, 661.175, 661.215, 661.225, 662.012, 663.035 and 677.249 are hereby repealed.
Sec. 105 This act becomes effective upon passage and approval.
LEADLINES OF REPEALED SECTIONS
661.046 Decrease of capital.
661.095Liability of paid-up stockholders or members.
661.145 Directors or managers: Qualifications.
661.155 Directors or managers: Oath.
661.175 Officers: Election and appointment; terms; removal.
661.215 Charging losses to surplus; reimbursement from earnings before payment of dividends.
661.225 Withdrawal of capital prohibited; limitation on declaration and payment of dividends or distributions.
662.012"Capital accounts" defined.
663.035 Interest on time deposits.
677.249 Approval of private insurer.