Sec. 36a-412. (Formerly Sec. 36-555). Out-of-state banks: Mergers, consolidations and acquisitions. De novo branches. Powers of branches. Applicability of Connecticut law. Commissioner approval. When.
Sec. 36a-412. (Formerly Sec. 36-555). Out-of-state banks: Mergers, consolidations and acquisitions. De novo branches. Powers of branches. Applicability of
Connecticut law. Commissioner approval. When. (a)(1) Any out-of-state bank,
whether or not owned or controlled by an out-of-state holding company, may, with
the approval of the commissioner, merge or consolidate with or acquire a branch or
significant part of the assets or ten per cent or more of the stock of a bank provided such
bank has been in existence and continuously operating for at least five years, unless the
commissioner waives this requirement, where the institution resulting from any such
merger or consolidation is an out-of-state bank, provided the laws of the home state of
such out-of-state bank authorize, under conditions no more restrictive than those imposed by the laws of this state as determined by the commissioner, a bank to merge or
consolidate with or purchase a branch or significant part of the assets or ten per cent or
more of the stock of an out-of-state bank whose home state is such state. Such merger,
consolidation or acquisition shall not take place if the out-of-state bank, including all
insured depository institutions which are affiliates of the out-of-state bank, upon consummation of the merger, consolidation or acquisition, would control thirty per cent or
more of the total amount of deposits of insured depository institutions in this state,
unless the commissioner permits a greater percentage of such deposits. Any such merger,
consolidation or acquisition of assets or stock shall be effected in accordance with and
subject to the filing requirements and any limitations imposed by the laws of this state
with respect to mergers, consolidations and acquisitions between banks. Any such out-of-state bank that engages in business in this state shall comply with the requirements
of section 33-920 or subsection (a) of section 33-1210. Before approving any such
merger, consolidation or acquisition, the commissioner shall make such considerations,
determinations and findings as required by the laws of this state with respect to mergers,
consolidations and acquisitions between banks and, in addition, shall consider whether
such merger, consolidation or acquisition can reasonably be expected to produce benefits
to the public and whether such benefits clearly outweigh possible adverse effects, including, but not limited to, an undue concentration of resources and decreased or unfair
competition. The commissioner shall not approve such merger, consolidation or acquisition unless the commissioner considers whether: (A) The investment and lending policies of the out-of-state bank, in the case of a merger or acquisition of assets, or the
proposed investment and lending policies of the bank, in the case of an acquisition of
stock, or of the institution that will result from a consolidation, are consistent with safe
and sound banking practices and will benefit the economy of this state; (B) the services
of the bank or branch to be acquired, or of the institution that will result from a merger,
or the proposed services of the institution that will result from a consolidation, are
consistent with safe and sound banking practices and will benefit the economy of this
state; (C) the merger, consolidation or acquisition will not substantially lessen competition in the banking industry of this state; (D) in the case of a merger or consolidation
or the acquisition of twenty-five per cent or more of such stock, the out-of-state bank
(i) has sufficient capital to ensure, and agrees to ensure, that the bank to be acquired or the
institution that will result from the merger or consolidation will comply with applicable
minimum capital requirements, and (ii) has sufficient managerial resources to operate
the bank to be acquired or the institution that will result from the merger or consolidation
in a safe and sound manner; and (E) the out-of-state bank is in compliance with applicable
minimum capital requirements. The commissioner shall not approve such merger, consolidation or acquisition unless the commissioner makes the findings required by section
36a-34. Any out-of-state bank that merges or consolidates with or acquires a branch
pursuant to this subdivision may establish additional branches in this state.
(2) Any out-of-state bank, other than a foreign bank, may, with the approval of the
commissioner, and in accordance with the provisions of this subdivision, establish a de
novo branch in this state. Such establishment shall not take place unless the laws of the
home state of such out-of-state bank authorize, under conditions no more restrictive
than those imposed by the laws of this state, as determined by the commissioner, a bank
to establish a de novo branch in the home state of such out-of-state bank, provided the
commissioner may waive such reciprocity requirement for the establishment of a de
novo branch the activities of which are limited to the exercise of fiduciary or trust powers
if the commissioner finds that such establishment will result in net new benefits to this
state. Any request for such waiver of reciprocity submitted by an out-of-state bank
shall include a detailed statement of the reasons for the request and statistical and other
information to support a finding of such net new benefits. Any such establishment shall
be effected in accordance with and subject to the filing requirements and any limitations
imposed by section 36a-145. Any such out-of-state bank that engages in business in this
state shall comply with the requirements of section 33-920 or subsection (a) of section
33-1210. Before approving any such establishment, the commissioner shall make such
considerations, determinations and findings as required by section 36a-145 and, in addition, shall consider whether such establishment can reasonably be expected to produce
benefits to the public and whether such benefits clearly outweigh possible adverse effects, including, but not limited to, an undue concentration of resources and decreased
or unfair competition. The commissioner shall not approve such establishment unless
the commissioner considers whether: (A) The investment and lending policies of the
out-of-state bank are consistent with safe and sound banking practices and will benefit
the economy of this state; (B) the proposed services of the branch are consistent with
safe and sound banking practices and will benefit the economy of this state; (C) the
establishment will not substantially lessen competition in this state; (D) the out-of-state bank is adequately managed and will continue to be adequately managed upon
establishment of such branch; and (E) the out-of-state bank is in compliance with applicable minimum capital requirements. The commissioner shall not approve such establishment unless the commissioner makes the findings required by section 36a-34. An
out-of-state bank which has established a de novo branch in this state in accordance with
this subdivision may establish additional branches in this state, provided the activities of
such additional branches of an out-of-state bank for which the commissioner waived
such reciprocity requirement shall be limited to the exercise of fiduciary or trust powers.
As used in this subdivision, "net new benefits" means (i) initial capital investments,
including any new construction, (ii) job creation plans, including, but not limited to, the
number of jobs to be created and the average wage rates for each category of such
jobs, (iii) the potential for increasing state and municipal tax revenues from increased
economic activity and increased employment, (iv) consumer and business services and
other benefits to the state, local community and citizens, and (v) such other matters as
the commissioner may deem necessary or advisable.
(3) Any out-of-state bank, regardless of whether it has a branch in this state, may
merge or consolidate with or acquire a branch in this state of an out-of-state bank that
has a branch in this state.
(4) (A) Except as provided in this section, the laws of this state shall apply to any
branch in this state of an out-of-state bank to the same extent as such laws would apply
if the branch were a federal bank, provided the following laws shall apply to any branch
in this state of an out-of-state bank to the same extent as such laws apply to a branch of
a Connecticut bank: (i) Community reinvestment laws including sections 36a-30 to
36a-33, inclusive, (ii) consumer protection laws including sections 36a-41 to 36a-45,
inclusive, 36a-290 to 36a-304, inclusive, 36a-306, 36a-307, 36a-315 to 36a-323, inclusive, 36a-645 to 36a-647, inclusive, 36a-690, 36a-695 to 36a-700, inclusive, 36a-705
to 36a-707, inclusive, 36a-715 to 36a-718, inclusive, 36a-725, 36a-726, 36a-755 to 36a-759, inclusive, 36a-770 to 36a-788, inclusive, and 36a-800 to 36a-810, inclusive, (iii)
fair lending laws including sections 36a-16, 36a-737, 36a-740 and 36a-741, and (iv)
branching laws including sections 36a-23 and 36a-145.
(B) Except as provided in this section, an out-of-state bank, other than a federally-chartered out-of-state bank, that establishes a branch in this state may conduct any activity at such branch (i) if such activity is permissible under the laws of the home state of
such out-of-state bank, and (ii) to the same extent as such activity is permissible for
either a Connecticut bank or a branch in this state of a federally-chartered out-of-state
bank. If the commissioner determines that a branch in this state of an out-of-state bank,
other than a federally-chartered out-of-state bank, is being operated in violation of any
applicable law of this state or in an unsafe and unsound manner, the commissioner may
take any enforcement action authorized under this title against such out-of-state bank
to the same extent as if such branch were a Connecticut bank, provided the commissioner
shall promptly give notice of such action to the home state banking regulator of such
out-of-state bank and, to the extent practicable, shall consult and cooperate with such
regulator in pursuing and resolving such action.
(5) Any out-of-state bank that merges or consolidates with or acquires the assets of
a bank or establishes in this state a de novo branch shall be subject to the supervision
and examination of the commissioner pursuant to regulations adopted by the commissioner in accordance with chapter 54 and shall make reports to the commissioner as
required by the laws of this state. The commissioner may examine and supervise the
Connecticut branches of any such out-of-state bank and may enter into agreements
with other state or federal banking regulators or similar regulators in a foreign country
concerning such examinations or supervision. Any such agreement may include provisions concerning the assessment or sharing of fees for such examination or supervision.
Unless waived by the commissioner, the provisions of this section shall apply to the
acquisition of the assets of any bank from the receiver of such bank by any out-of-state bank.
(6) No out-of-state bank may establish or maintain a branch in this state on the
premises or property of an affiliate of such bank if the affiliate engages in commercial
activities.
(b) A bank may merge or consolidate with an out-of-state bank where the resulting
institution is a bank, or acquire a branch or a significant part of the assets or ten per cent
or more of the stock of an out-of-state bank, in accordance with applicable law. Any
such merger, consolidation or acquisition of assets or stock shall be effected in accordance with and subject to the limitations imposed by the laws of this state with respect
to mergers, consolidations and acquisitions between banks. Any such bank may continue
to operate as a branch the business of the out-of-state bank with which it has merged or
consolidated or the assets of which it has acquired to the extent of the powers otherwise
possessed by such bank. The commissioner may examine and supervise the out-of-state
branches of any such Connecticut bank, and may enter into agreements with other state
or federal banking regulators or similar regulators in a foreign country concerning such
examinations or supervision. Any such agreement may include provisions concerning
the assessment or sharing of fees for such examination or supervision.
(c) Any acquisition by a Connecticut bank of ten per cent or more of the stock of
another bank or an out-of-state bank pursuant to the authority of subsection (b) of this
section is not subject to any provisions of this title limiting the ownership of stock in
such institutions.
(P.A. 83-411, S. 4, 20; 83-587, S. 84, 96; P.A. 84-546, S. 92, 173; P.A. 88-224, S. 3; P.A. 90-2, S. 4, 20; P.A. 91-189,
S. 10, 13; P.A. 92-12, S. 101; P.A. 93-24, S. 7, 9; P.A. 94-122, S. 187, 340; P.A. 95-155, S. 27, 29; P.A. 96-191, S. 3, 6;
96-256, S. 196, 209; P.A. 97-223, S. 7, 8; P.A. 98-58, S. 1, 3; 98-177, S. 3; P.A. 99-33, S. 1, 3; 99-158, S. 7; P.A. 01-76,
S. 4, 5; P.A. 03-196, S. 7; P.A. 04-136, S. 37; P.A. 07-14, S. 3.)
History: P.A. 83-587 made technical changes; P.A. 84-546 made technical changes; P.A. 88-224 required the commissioner to use a balancing test before approving any merger consolidation or acquisition and to adopt regulations; P.A. 90-2 changed New England savings bank to out-of-state savings bank, added certain criteria for the commissioner of banking
to consider prior to approving any merger or consolidation with or acquisition by an out-of-state savings bank, added
certain findings to be made by the commissioner prior to granting such approval, provided that the regulations required
under Subsec. (a) apply only to mergers or consolidations with and acquisitions by a New England savings bank, and made
certain technical changes; P.A. 91-189 required the commissioner to consider whether the proposed merger, consolidation
or acquisition will not substantially lessen competition in the banking industry, added provisions re considerations to be
made by the commissioner in the case of a merger or consolidation or the acquisition of 25% or more of the stock of the
Connecticut institution and added provisions re regulations concerning the commissioner's findings of records of compliance with community technical changes; P.A. 92-12 made a technical change in Subsec. (d); P.A. 93-24 amended Subsec.
(a) to delete provision requiring adoption of regulations setting specific standards for the approval of mergers or consolidations with acquisitions by a New England savings bank, effective May 4, 1993; P.A. 94-122 allowed out-of-state commercial
banks to merge with or acquire the assets of Connecticut institutions, applied the interstate banking law to 10% acquisitions,
foreign country banks, home states, express reciprocal laws, de novo establishments, deleted the community reinvestment
provisions in Subsec. (a), gave the commissioner authority to examine and supervise Connecticut branches of out-of-state
banks and enter agreements with other regulators re such oversight, specified that interstate banking requirements apply
to an out-of-state bank's acquisition of assets of any bank from a receiver, effective January 1, 1995; Sec. 36-555 transferred
to Sec. 36a-412 in 1995; P.A. 95-155 amended Subsec. (a)(1) and (b) by adding the acquisition of a branch and adding
"significant part of" to the assets that may be acquired, amended Subsec. (a)(1) by adding the five-year requirement, the
reference to "ten per cent or more" and provisions re controlling deposits, re Secs. 33-396 and 33-505, and re considerations,
determinations and findings by the commissioner, by deleting reference to the principal place of business and certain
provisions re the merger, consolidation or acquisition by an out-of-state bank, and by changing "state or foreign country"
to "home state" and making technical changes re the required considerations by the commissioner, added Subsec. (a)(2)
re de novo branches, added Subsec. (a)(3) re the powers of and applicability of state laws on branches, amended Subsec.
(b) by deleting "in the same location" and the approval requirement re an out-of-state bank's state or country, adding
authority re the commissioner's examination and supervision, deleted former Subsec. (c) re acquisition of stock of a bank,
and made technical changes, effective June 27, 1995; P.A. 96-191 amended Subpara. (a)(1)(E) and added Subdiv. (a)(3)
re merger, consolidation or acquisition of a branch in this state by an out-of-state bank, renumbering former Subdivs. (3)
and (4) accordingly, effective June 3, 1996; P.A. 96-256 amended Subsec. (a) to replace references to Sec. 33-505 with
Sec. 33-1210(a), effective January 1, 1997; P.A. 97-223 amended Subdiv. (4)(A) of Subsec. (a) by adding provisions re
enforcement action taken by commissioner; P.A. 98-58 amended Subsec. (a)(2) by adding reciprocity waiver and activity
restrictions applicable to branches limited to the exercise of fiduciary or trust powers, effective May 18, 1998; P.A. 98-177 made technical changes in Subsec. (a); P.A. 99-33 amended Subsec. (a)(@) by adding provisions re commissioner's
finding of net new benefits, effective May 27, 1999; P.A. 99-158 amended Subsec. (a)(4) by deleting the provisions of
former Subpara. (A), designating former Subpara. (B) as Subpara. (A) and making technical changes therein, and adding
new Subpara. (B); P.A. 01-76 deleted Subsec. (a)(3)(A) and provisions re the commissioner's approval of a merger or
consolidation of an out-of-state bank, added reference to Secs. 36a-41 to 36a-45 in Subsec. (a)(4)(A)(ii) and made a
technical change in Subsec. (b), effective July 1, 2001; P.A. 03-196 amended Subsecs. (a)(5) and (b) to allow agreements
entered into by commissioner to include provisions re assessment or sharing of fees for examination or supervision and,
in Subsec. (a)(5), replace "The provisions of this section apply" with "Unless waived by the commissioner, the provisions
of this section shall apply", effective July 1, 2003; P.A. 04-136 amended Subsec. (a)(1) and (2) to eliminate provisions re
establishment of additional branches in accordance with Sec. 36a-145, effective May 12, 2004; P.A. 07-14 added Subsec.
(a)(6) prohibiting an out-of-state bank from establishing or maintaining a branch in this state on premises or property of
its affiliate if affiliate engages in commercial activities, effective May 7, 2007.