6-08.4 Interstate Branching
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<![CDATA[CHAPTER 6-08.4INTERSTATE BRANCHING6-08.4-01.Definitions.For purposes of this chapter, unless the context otherwiserequires:1."Affiliate" means a company that controls, is controlled by, or is under common<br>control with another company.2."Bank" means insured depository institution as defined in 12 U.S.C. 1813(c)(2), but<br>the term does not include "foreign bank" as defined in 12 U.S.C. 3101(7), except any<br>foreign bank organized under the laws of a territory of the United States, the<br>deposits of which are insured by the federal deposit insurance corporation.3."Commercial activities" means activities in which a bank holding company, a<br>financial holding company, a national bank, or a national bank financial subsidiary<br>may not engage under federal law.4."Home state" means:a.With respect to a national bank, the state in which the main office is located;<br>andb.With respect to a state bank, the state by which the bank is chartered.5."Transaction" means a bank's establishment, operation, and, as applicable, retention<br>of a bank branch office in a state other than its home state, whether de novo, by<br>acquisition of a separate branch office, or through a merger of a North Dakota bank<br>with another bank.6-08.4-02. Interstate branches. Subject to section 6-08.4-06, the responsible federalregulatory authority may approve a transaction under the Federal Deposit Insurance Act [Pub. L.<br>81-967; 64 Stat. 87; 12 U.S.C. 1811 et seq.].6-08.4-03.Authorityofstatebankstoestablishinterstatebranches.Notwithstanding section 6-08.4-02, a North Dakota state-chartered bank, with approval of the<br>commissioner or board, may establish, acquire, retain, and operate one or more branches in a<br>state other than this state. An application must be filed with the commissioner or board at the<br>time an application is filed with the responsible federal regulatory authority. The North Dakota<br>state-chartered bank must also comply with section 6-03-11 or 6-03-13.3, as applicable. The<br>commissioner or board may approve the transaction if the commissioner or board finds that:1.The proposed transaction will not be detrimental to the safety and soundness of the<br>North Dakota state-chartered bank;2.Any new officers and directors are qualified, and possess appropriate experience<br>and financial responsibility; and3.The proposed transaction is consistent with the convenience and needs of the<br>communities to be served by the bank in this state and is otherwise in the public<br>interest.If the commissioner's decision with respect to an application is unfavorable, the applicant bank<br>may appeal the decision to the board by filing a notice of appeal with the commissioner within<br>twenty days after the commissioner has notified the applicant bank of the decision.6-08.4-04.Interstate merger transactions and branching permitted.EffectiveMay 31, 1997, one or more North Dakota banks may merge with one or more out-of-state banksPage No. 1under this chapter, and an out-of-state bank resulting from an interstate merger may maintain<br>and operate branches of a merged North Dakota bank in this state if the conditions and filing<br>requirements of this title are met.6-08.4-05.Notice and filing requirements.Any out-of-state bank that proposes atransaction for a branch in this state must notify and submit a copy of its transaction application<br>to the board not later than the date on which it files the application with the responsible federal<br>regulatory authority.6-08.4-06. Powers.1.An out-of-state state-chartered bank that establishes, acquires, and retains one or<br>more branches in this state under this chapter may conduct any activities at the<br>branch or branches that are authorized under the laws for North Dakota state banks,<br>except to the extent those activities may be prohibited by the laws, rules, or orders of<br>the home state applicable to the out-of-state state-chartered bank.2.A North Dakota state-chartered bank may conduct any activities at any branch<br>outside this state which are permissible for an out-of-state state-chartered bank<br>where the branch is located, except to the extent those activities are expressly<br>prohibited by North Dakota law, rule, or order.3.A bank may not establish or maintain a branch in this state on the premises or<br>property or within one mile [1.60 kilometers] of the premises or property of an<br>affiliate if the affiliate engages in commercial activities.6-08.4-06.1. Reciprocity required. To the extent a state imposes a restriction on theability of a North Dakota bank to establish, acquire, or retain a branch in that state, that restriction<br>must apply to the establishment, acquisition, or retention of a branch in this state by the<br>out-of-state bank.6-08.4-07.Enforcement.If the board or commissioner determines that a branchmaintained by an out-of-state state-chartered bank is being operated in violation of any provision<br>of North Dakota law, or that the branch is being operated in an unsafe and unsound manner, the<br>board or commissioner has the same authority to take all enforcement actions as if the branch<br>were a North Dakota state-chartered bank.6-08.4-08. Powers of industrial bank. An industrial bank may not accept deposits ormake loans at a commercial location unless the industrial bank is owned by a financial holding<br>company as defined in 12 U.S.C. 1841(p). For purposes of this section, "commercial location"<br>means a location owned, operated, leased, or otherwise controlled by an entity that derives<br>fifteen percent or more of its annual gross revenues, on a consolidated basis, including all<br>affiliates of the entity, from engaging, on an ongoing basis, in activities that are not financial in<br>nature or incidental to a financial activity during at least three of the prior four calendar quarters,<br>as determined by the department of financial institutions.Page No. 2Document Outlinechapter 6-08.4 interstate branching]]>