6-05 Annuity, Safe Deposit, Surety, and Trust Companies

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CHAPTER 6-05ANNUITY, SAFE DEPOSIT, SURETY, AND TRUST COMPANIES6-05-01.Who may form - Corporation has perpetual existence.Any number ofpersons, not less than nine, at least three of whom must be residents of this state, may associate themselves and form a corporation for the purpose of transacting business as an annuity, safe deposit, and trust company. Its existence shall be perpetual.At the time and place stated, and through any sources of information at its command, theboard shall examine and consider all relevant factors, including whether the place where such company is proposed to be located is in need of a further annuity, safe deposit, and trust company, whether the proposed institution is adapted to the filling of such need, and whether the proposed incorporators are possessed of such character, integrity, reputation, and financial standing as shown by a detailed financial statement to be furnished by them, that their connection with the company will be beneficial to the public welfare of the community in which such company is proposed to be established. The board shall hear any reasons advanced by the applicants why they should be permitted to organize the proposed institution and any reasons advanced by any person why such institution should not be permitted to be organized. At the termination of such hearing, the board shall make a brief statement in writing of its conclusions, and if it finds that the proposed institution should not be permitted to organize, it shall state briefly the reasons why. A copy of such conclusions either shall be endorsed upon or attached to the organization certificate, together with the refusal or grant of permission to the proposed incorporators to present the said organization certificate to the secretary of state.Adetermination in favor of such organization must be joined in by a majority of the members of the board.Any banking association organized under chapter 6-02 may apply to the board for anorder authorizing the applicant to exercise fiduciary powers. If the determination of the board is in favor of the applicant, the board shall make its order authorizing the applicant to engage in the business of a trust company upon its showing full compliance with sections 6-05-03, 6-05-04, and 6-05-05 except the capital stock of the banking association shall not be required to be divided in shares of one hundred dollars each as provided by section 6-05-03.Sections 6-05-06 and6-05-07 are not applicable to banking associations granted authority to engage in the business of a trust company by the board. Thereafter, such banking association must be subject to the jurisdiction of the board as to its trust company operations the same as trust companies organized under chapter 6-05.Any corporation organized and authorized to transact the business of fidelity insuranceand corporate suretyship prior to July 1, 1983, pursuant to the former sections 6-05-08 and 6-05-19 through 6-05-24 and sections 6-05-30 through 6-05-33 may continue to operate under the provisions of those sections as they existed on June 30, 1983.6-05-02.Compliance with chapter required - Penalty for noncompliance.Noperson, firm, company, copartnership, or corporation, either domestic or foreign, not organized under this chapter nor subject to its provisions, except only national banking corporations, state banks authorized under this chapter, state banks or trust companies authorized to engage in trust activities under the laws of another state, their affiliates, bona fide banking institution trade associations and their affiliates, and the Bank of North Dakota, may make use of or display in connection with its business, in signs, letterheads, advertising, or in any other way, such words as "trust", "trust company", or any other word or words of like import, nor may any person or concern do or perform anything in the nature of the business of a trust company until and unless such business is regularly organized and authorized under this chapter. If any firm or corporation organized prior to July 1, 1931, has been granted a charter permitting it to use any word, words, or title contrary to the intent of this section, and by reason of its rights under such charter, the provisions of this section may not be enforced against it during the life of such charter. However, no renewal charter may be granted to such person, firm, or corporation permitting the continuance of the use of such word, words, or title contrary to or in violation of this section. Any person, firm, or corporation which, by reason of an existing charter right under any law or statutePage No. 1in effect prior to July 1, 1931, may be held by the courts not to be affected by this section and which therefore refuses to comply with the provisions of this section, during the period of noncompliance, shall display, prominently and continuously in plain, legible, and clearly discernible lettering on all of its signs, stationery, circulars, and advertising, and in all of its printed or written matter the following words and language: "NOT UNDER THE SUPERVISION OF THE STATE BANKING BOARD OR THE COMMISSIONER OF FINANCIAL INSTITUTIONS", and such language must be displayed thereon as prominently as any other matter therein.Anyperson, firm, company, copartnership, or corporation, domestic or foreign, violating any provision of this section, shall forfeit to the state one hundred dollars for every day or part thereof during which such violation continues. In an action brought by the commissioner or any aggrieved person, the court may issue an injunction restraining such person, firm, company, copartnership, or corporation from further using such words, terms, or phrases in violation of this section or from further transacting business in such a way or manner as to lead the public to believe that its business is in whole or in part of the nature of a trust company, or that it is under the supervision of the state banking board or the commissioner. Upon written request, the commissioner may grant an exemption to this section if the commissioner finds that use of the words "trust" or "trust company", or words of like import, are not reasonably likely to cause confusion or lead the public to believe that the person requesting the exemption is a trust company, banking institution trade association, or affiliate authorized under this section or is conducting a business subject to the jurisdiction of the department. In granting an exemption under this section, the commissioner may restrict or condition the exemption and use of the name or word or the activities of an exempt person as the commissioner considers appropriate to protect the public interest.6-05-03. Capital stock - Amount - Par value - Paid-in capital required. The amountof capital stock of any such corporation may not be less than one hundred thousand dollars, and the same must be divided into shares of one hundred dollars each. No such corporation is authorized to transact any business or exercise any powers as such until the aforesaid minimum amount of capital stock has been subscribed for, and not less than fifty thousand dollars thereof actually has been paid in, invested, and deposited as provided in this chapter. The state banking board may require such additional capital, surplus, and undivided profits as it may determine necessary to properly serve the area and to protect the public interests. The state banking board shall take into consideration peer group ratios, or federal standards and guidelines, when determining whether any additional capital is required.6-05-04. Surety deposit investments required - Securities in which investment maybe made. Every corporation organized under this chapter and every foreign corporation before engaging in similar comparable activities within this state shall either deposit with any federal reserve bank, the Bank of North Dakota, or any other custodian approved by the commissioner, securities as provided by this section or pledge a certificate of deposit as provided by this section. The deposit or pledge may not be less than fifty thousand dollars or less than one-sixth of the par value of the capital stock of the corporation, whichever is the greater. However, a corporation is not required to deposit or pledge more than five hundred thousand dollars.The depositcertificate or pledge agreement must authorize the commissioner to cause the deposit, in part or in whole, to be transferred to the commissioner upon the commissioner's demand. An original of the deposit certificate or pledge must be furnished to the commissioner. The deposit or pledge must be:1.Bonds of the United States or of this state;2.Bonds of other states which have the approval of the commissioner of financial institutions;3.Bonds or obligations of any township, school district, city, or county within this state, whose total bonded indebtedness does not exceed five percent of the then assessed valuation thereof;4.Bonds or promissory notes secured by first mortgages or deeds of trust upon unencumbered real estate situated within the state of North Dakota worth two and one-half times the amount of the obligation so secured;Page No. 25.Obligations issued, assumed, or guaranteed by the international bank for reconstruction and development or the African development bank;6.United States treasury bills or notes of an agency thereof;7.Certificates of deposit fully insured by the federal deposit insurance corporation from banks located within this state; or8.Certificates of deposit issued by the Bank of North Dakota.6-05-04.1.Right of action against deposit.The security deposited with the statetreasurer as provided in section 6-05-04 must be held by the state treasurer for the benefit of any person making any transfer or deposit of money or property in the state of North Dakota to or with any trust company and who suffers loss or damage because of the breach of any trust committed by such trust company. Any judgment obtained by any such person from any court of competent jurisdiction may be satisfied from the security deposited with the state treasurer.6-05-05. Certificate of deposit. Whenever any such corporation assigns, transfers, anddelivers to the commissioner, or a designated agent, the securities described in section 6-05-04 and all evidences of such investment, the commissioner, or a designated agent, shall execute and deliver to the corporation a certificate of such deposit, and thereupon, the said corporation may commence and carry on business under the provisions of this chapter. The commissioner, or a designated agent, shall hold the said securities so deposited with the commissioner or agent as collateral security for the depositors and creditors of the corporation, and for the faithful execution of any trusts which may be imposed lawfully upon and accepted by such corporation. The corporation from time to time may withdraw the said securities or any part thereof from the commissioner, or a designated agent, upon depositing with the commissioner or agent other securities of equal amount and value and of the kinds specified in section 6-05-04.Untilotherwise ordered by a court of competent jurisdiction, the said commissioner, or a designated agent, shall pay over to such corporation the interest and dividends which the commissioner or agent collects upon such securities.Any corporation having a larger deposit with thecommissioner, or a designated agent, than is required by this chapter must be allowed at any time to withdraw its excess deposit.6-05-06. Directors - Qualifications - Terms - Vacancies. All the corporate powers ofsuch a corporation must be exercised by a board of directors of not less than three nor more than twenty-five in number, and such officers and agents as it elects or appoints. A majority of the directors must be citizens of this state. Any director who becomes in any manner disqualified shall vacate that director's office thereupon. Every director, when elected or appointed, shall take the oath specified in section 6-03-04.Such oath, subscribed by the director making it andcertified by the officer before whom it was taken, must be transmitted at once to the commissioner to be filed in the commissioner's office. The articles of incorporation must state the names and residences of the first board of directors, of whom the first named one-third shall serve for a period of three years, the second one-third named for a period of two years, and the balance thereof shall serve for a period of one year from the date fixed for the commencement of such corporation. In case any of the persons so named shall fail or refuse to qualify from any cause, the directors who qualify must elect qualified persons to fill such vacancies, and thereafter, at each annual meeting of the stockholders, directors must be elected to serve three years in place of those whose terms then expire.6-05-07.Election of directors - Appointment and bonds of officers.An annualelection must be held at the principal office or place of business of the corporation, which must be within this state, upon a day to be fixed by the articles of the corporation, and notice of such election must be given by registered or certified mail at least ten days prior to such date, or by publication in a newspaper published in the county in which the corporation has its principal place of business. At such meeting, the directors must be elected, and in case of a failure to elect on that day or on a day to which such annual meeting may be adjourned, the directors whose regular terms do not then expire shall proceed to elect such number of directors as have failed of election, and any vacancy in the office of director may be filled by the board until the next annualPage No. 3meeting. The board of directors, at its next meeting following the election of directors and after such directors have qualified, shall elect from its number a president, vice president, and such other officers as may be necessary to the transaction of the business of the corporation. The board shall define the powers, authority, and duties of such officers and employees by bylaws or resolutions, fix the conditions, form, and amount of their bonds, and approve the same, but no such officer or employee may enter upon the discharge of the person's duties until such bond has been approved and has been filed with and approved by the commissioner.6-05-08.Corporate powers.A corporation, when qualified as provided by section6-05-04, may:1.Acquire, lease, purchase, own, hold, use, improve, mortgage, sell, and convey such real estate and personal property as may be necessary for the convenient transaction of its business.It may acquire real estate by foreclosure or uponcompromise or settlement of prior mortgages held by it either as absolute owner or as trustee and may dispose of the same. No part of the capital, deposits, trust funds, or property owned or held by it, in trust or otherwise, may be invested in real estate except as herein authorized, unless the investment is made under and by virtue of a particular contract, or instrument, or order, judgment, or decree of court, which confers a special power or authority so to do, and then only with, or to the extent of, the moneys or funds thereby provided and belonging to such particular trust.Such corporation is authorized to purchase notes, bonds, mortgages, andother evidences of indebtedness, and other securities, subject to the limitations imposed upon banking associations as to investments, and to convert the same into cash and other securities.2.Act as trustee under will, agreement, court order, or otherwise, and act as fiscal agent and transfer agent.3.Take, accept, and hold on deposit for savings account or for safekeeping, or in escrow, or for investment, any and all moneys, bonds, stocks, and other securities, or personal property whatsoever. When any savings deposit has been received from a minor, the repayment of the deposit to the minor or the minor's order is a complete discharge of such corporation from any further liability therefor. Whenever any officer or person, public or private, or any fiduciary, is authorized to pay into or deposit in any court any moneys, securities, or personal property whatsoever, the same instead of being deposited with or paid into court may be paid into or deposited with any corporation organized and acting under this chapter which may be designated for that purpose by the court having jurisdiction of the subject matter, or by the person owning or controlling such property.Whenever any fiduciarydeposits any moneys, securities, or any personal property whatsoever, belonging to the fiduciary's trust, with any corporation qualified and acting under this chapter and takes a receipt of such corporation therefor, the fiduciary and the fiduciary's sureties thereafter are relieved from all liability therefor until the same again shall be delivered to the fiduciary by such corporation.4.Act as assignee, receiver, administrator, executor, guardian, or conservator.5.Provide by its bylaws and regulations for the payment of interest or dividends, for the investment of moneys, and conditions for repaying or withdrawing the same. It may borrow money upon the security of its own property or credit.6.Act as agent and attorney in fact in all respects as a natural person could do.7.Make, compile, and certify abstracts of title of real estate upon the conditions prescribed by the laws of this state relating to abstracters to ensure the validity and genuineness of titles to real property.Page No. 48.Notwithstanding any other provision of law and subject to approval by the state banking board, engage in any fiduciary activity in which a federally chartered financial institution that is granted fiduciary powers may engage.6-05-08.1.Issuance of certificates of deposit - Penalty.Repealed by S.L. 1991,ch. 82, </DIV></DIV></DIV> </DIV>  <DIV></DIV> <DIV></DIV> <DIV></DIV> <DIV></DIV>  <DIV id=footer> <DIV class=container> Copyright © 2012-2022 Laws9.Com All rights reserved.  <A href="/contactus.html">Contact Us</A> | <A href="/aboutus.html">About Us</A> | <A href="/terms.html">Terms</A> | <A href="/privacy.html">Privacy</A> </DIV> </DIV> </BODY></HTML>

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6-05 Annuity, Safe Deposit, Surety, and Trust Companies