CHAPTER 30 - A STATE SAVINGS BANK CHARTER IN SOUTH CAROLINA
Title 34 - Banking, Financial Institutions and Money
CHAPTER 30.
A STATE SAVINGS BANK CHARTER IN SOUTH CAROLINA
ARTICLE 1.
GENERAL PROVISIONS
SECTION 34-30-10. Short title.
This chapter is known as "State Savings Bank".
SECTION 34-30-20. Application of chapter.
This chapter, unless the context otherwise specifies, applies to all state savings banks.
SECTION 34-30-30. Definitions.
(A) The term "savings and loan association" when used in the 1976 Code, other than in Chapter 28, includes state savings banks chartered under this chapter and Chapter 28.
(B) Unless the context otherwise requires, the following definitions apply in this chapter:
(1) "Board" means the State Board of Financial Institutions.
(2) "Affiliate" means a person or corporation that controls, is controlled by, or is under common control with a savings institution.
(3) "Articles of incorporation or charter" means the document that represents the corporate existence of a state savings bank.
(4) "Associate" means a person's relationship with:
(a) any corporation or organization, other than the applicant or a majority-owned subsidiary of the applicant, of which the person is an officer or partner or is, directly or indirectly, the beneficial owner of ten percent or more of any class of equity securities;
(b) any trust or other estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or in a similar fiduciary capacity; and
(c) a relative or spouse who lives in the same house as that person or a relative of that person's spouse who lives in the same house as that person or who is a director or officer of the applicant or any of its parents or subsidiaries.
(5) "Association" means a mutual or stock-owned savings association, savings and loan association, building and loan association, or savings bank as organized pursuant to Section 34-28-30.
(6) "Branch office" means an office of a state savings bank, other than its principal office, that accepts deposits and renders savings institution services.
(7) "Capital stock" means securities that represent ownership of a stock state savings bank.
(8) "Conflict of interest" means a matter before the board of directors in which one or more of the directors, officers, or employees has a direct or indirect financial interest in its outcome.
(9) "Control" means the power, directly or indirectly, to:
(a) direct the management or policies of a state savings bank or to vote twenty-five percent or more of a class of voting securities for a state savings bank;
(b) control the election or appointment of a majority of the directors of a state savings bank; or
(c) control or exercise a controlling influence over the management or policies of the state savings bank.
For purposes of this definition of control, references to a state savings bank include the holding company for the state savings bank.
(10) "Depository institution" means a person, firm, or corporation engaged in the business of receiving, soliciting, or accepting money or its equivalent on deposit, or of lending money or its equivalent, or of both.
(11) "Disinterested directors" means those directors who have absolutely no direct or indirect financial interest in the matter before them.
(12) "Dividends on stock" means the earnings of a state savings bank paid out to holders of capital stock in a stock state savings bank.
(13) "Examination and investigation" means a supervisory inspection of a state savings bank or proposed state savings bank that may include inspection of every relevant piece of information including subsidiary or affiliated businesses.
(14) "Immediate family" means one's spouse, father, mother, children, brothers, sisters, and grandchildren; and the father, mother, brothers, and sisters of one's spouse; and the spouse of one's child, brother, or sister.
(15) "Insurance of deposit accounts" means insurance on a state savings bank's deposit accounts when the beneficiary is the holder of the insured account.
(16) "Loan production office" means an office of a state savings bank other than the principal or branch offices whose activities are limited to the generation of loans.
(17) "Members" means deposit account holders and borrowers in a state mutual savings bank.
(18) "Mutual savings bank" means a state savings bank organized in mutual form under this chapter.
(19) "Mutual holding company" means a holding company for a mutual savings bank.
(20) "Net worth" means a state savings bank's total assets less total liabilities as defined by generally accepted accounting principles.
(21) "Original incorporators" means one or more natural persons who are the organizers of a state savings bank responsible for the business of a proposed state savings bank from the filing of the application to the board's final decision on the application.
(22) "Plan of conversion" means a detailed outline of the procedure for conversion of a savings institution from one to another regulatory authority, from one to another form of organization, or from one to another charter.
(23) "Principal office" means the office that houses the headquarters of a state savings bank.
(24) "Registered agent" means the person named in the articles of incorporation upon whom service of legal process is binding upon the state savings bank.
(25) "Savings institution" means either an association or a state savings bank, or a federal savings association or federal savings bank.
(26) "Service corporation" means a corporation operating under Article 7 of this chapter that engages in activities determined by the board to be incidental to the conduct of a depository institution business as provided in this chapter, or engages in activities that further or facilitate the corporate purposes of a state savings bank, or furnishes services to a state savings bank or subsidiaries of a state savings bank, the voting stock of which is owned directly or indirectly by one or more savings institutions.
(27) "State savings bank" means a depository institution organized and operated under this chapter or a corporation organized under federal law and converted so as to be operated under this chapter.
(28) "Stock savings bank" means a state savings bank owned by holders of capital stock and organized under this chapter.
(29) "Voluntary dissolution" means the dissolution and liquidation of a state savings bank in initiated by its ownership.
ARTICLE 2.
INCORPORATION AND ORGANIZATION
SECTION 34-30-50. Application of Business Corporation Act.
When not in direct conflict with or superseded by specific provisions of this chapter, the provisions of the South Carolina Business Corporation Act, Chapters 1 to 25 of Title 33, apply to a state savings bank organized or operated under this chapter.
SECTION 34-30-60. Prior charters; legal name, requirements; prohibited acts; injunctions.
(A) Nothing in this chapter invalidates a charter that was valid before the enactment of this chapter. A savings institution chartered on the effective date of this chapter may continue operation in accordance with the chapter under which it was chartered. However, after the date this chapter becomes effective, a depository institution may not be qualified as a state savings bank except in accordance with this chapter. A state savings bank chartered under this chapter must use the letters "SSB" in its legal name.
(B) Except as provided in subsection (A) of this section, or in Chapter 28 of Title 34, a person, corporation, company, or state savings bank, except one incorporated and licensed in accordance with this chapter or federal law to operate a savings bank, shall not operate as a state savings bank. Unless authorized as a state or federal savings bank and engaged in transacting a depository institution business, a person, corporation, company, or savings bank domiciled and doing business in this State shall not:
(1) use in its name the term 'savings bank' or words of similar import or connotation that lead the public reasonably to believe that the business so conducted is that of a savings bank; or
(2) use a sign or circulate or use any letterhead, billhead, circular, or paper, or advertise or communicate in a manner that would lead the public reasonably to believe that it is conducting the business of a savings bank.
(C) Upon application by the board or by a state savings bank, a court of competent jurisdiction may issue an injunction to restrain any person or entity from violating or from continuing to violate subsection (B) of this section.
SECTION 34-30-70. Organization and establishment; application, fee; contents of application.
(A) The original incorporators, a majority of whom must be domiciled in this State, may organize and establish a state savings bank to promote the purposes of this chapter, subject to approval as provided in this chapter. The original incorporators shall file with the board a preliminary application to organize a state savings bank in the form prescribed by the board, together with the proper nonrefundable application fee.
(B) An application to organize a state savings bank must contain:
(1) a copy of the proposed articles of incorporation, which must be signed by the original incorporators;
(2) the names and addresses of the incorporators; and the names and addresses of the initial members of the board of directors, and the number of shares they plan to subscribe to;
(3) statements of the anticipated receipts, expenditures, earnings, and financial condition of the state savings bank for its first three years of operation, or a longer period as the board may require;
(4) a showing satisfactory to the board that:
(a) the public convenience and advantage are served by the establishment of the proposed state savings bank;
(b) there are reasonable demand and necessity in the community which is served by the establishment of the proposed state savings bank;
(c) the proposed state savings bank has a reasonable probability of sustaining profitable and beneficial operations within a reasonable time in the community in which the proposed state savings bank intends to locate; and
(5) the proposed bylaws; and
(6) statements, exhibits, maps, and other data that may be prescribed or requested by the board, and which are sufficiently detailed and comprehensive so as to enable the board to pass upon the criteria in this article.
(C) The application must be signed by the original incorporators, and properly acknowledged by a person duly authorized by this State to take proof and acknowledgment of deeds. The application must contain additional information required by the board.
SECTION 34-30-80. Proposed mutual state savings banks, proposed stock state savings banks; articles of incorporation.
(A) The articles of incorporation of a proposed mutual state savings bank must include:
(1) the name of the state savings bank, which must not so closely resemble the name of an existing depository institution doing business under the laws of this State as to be likely to mislead the public;
(2) the county and city or town where its principal office is located in this State, and the name of its registered agent and the address of its registered office, including county and city or town, and street and number;
(3) the period of duration, which may be perpetual. When the articles of incorporation fail to state the period of duration, it is considered perpetual;
(4) the purposes for which the state savings bank is organized, limited to purposes permitted under the laws of this State for state savings banks;
(5) the minimum amount on deposit in deposit accounts, not less than four million dollars, before the commencement of business;
(6) a provision not inconsistent with this chapter and the proper operation of a state savings bank in which the incorporators provide for the regulation of the internal affairs of the state savings bank;
(7) the number of directors, not less than five, constituting the initial board of directors, and the name and address of each person who is to serve as a director until the first meeting of members, or until a successor is elected and qualified;
(8) the names and addresses of the incorporators.
(B) The articles of incorporation of a proposed stock state savings bank must include:
(1) the name of the state savings bank, which must not so closely resemble the name of an existing depository institution doing business under the laws of this State as to be likely to mislead the public;
(2) the county and city or town where its principal office is located in this State, and the name of its registered agent and the address of its registered office, including county and city or town, and street and number;
(3) the period of duration, which may be perpetual. When the articles of incorporation fail to state the period of duration, it is considered perpetual;
(4) the purposes for which the state savings bank is organized, limited to purposes permitted under the laws of this State for state savings bank;
(5) with respect to the shares of stock which the state savings bank has authority to issue, if the stock is to:
(a) have a par value, the number of shares of stock and the par value of each;
(b) be without par value, the number of shares of stock; or
(c) be divided into classes, or into series within a class of preferred or special shares of stock, the articles of incorporation must also designate each class and each series within a class, and provide a statement of the preferences, limitations, and relative rights of the stock of each class or series;
(6) the minimum amount of consideration to be received for its shares of stock before the commencement of business;
(7) a statement as to whether stockholders have preemptive rights to acquire additional or treasury shares of the state savings bank;
(8) a provision not inconsistent with this chapter or the proper operation of a state savings bank, in which the incorporators provide for the regulation of the internal affairs of the state savings bank;
(9) the number of directors, not less than five, constituting the initial board of directors, and the name and address of each person who is to serve as a director until the first meeting of the stockholders, or until a successor is elected and qualified; and
(10) the names and addresses of the incorporators.
(C) The articles of incorporation may include other provisions authorized or permitted to be in the articles of incorporation of a corporation by Chapters 1 to 25 of Title 33.
SECTION 34-30-90. Board examination of application.
Upon receipt of an application to organize and establish a state savings bank, the board shall examine or cause to be examined all the relevant facts connected with the formation of the proposed state savings bank.
SECTION 34-30-100. Mutual state savings banks, stock state savings banks; approval of application; minimum pledges, adjustment, considerations.
(A) The board may approve an application to form a mutual state savings bank only when:
(1) the proposed state savings bank has an operational expense fund, from which to pay organizational and incorporation expenses, in an amount determined by the board to be sufficient for the safe and proper operation of the state savings bank, but not less than four hundred thousand dollars. The monies remaining in the expense fund must be held by the state savings bank for at least three years from its date of licensing. No portion of the fund may be released to an incorporator or director who contributed to it, to another contributor, or to another person, and no dividends may be accrued or paid on the funds without the prior approval of the board;
(2) the proposed state savings bank has pledges for deposit accounts in an amount determined by the board to be sufficient for the safe and proper operation of the state savings bank, but not less than four million dollars;
(3) all deposit accounts of the proposed state savings bank have been made with legal tender of the United States;
(4) the name of the proposed state savings bank will not mislead the public and is not the same as an existing depository institution or so similar to the name of an existing depository institution as to mislead the public;
(5) the character, general fitness, and responsibility of the incorporators and the initial board of directors of the proposed state savings bank, a majority of whom must be residents of South Carolina, command the confidence of the community in which the proposed state savings bank locates;
(6) there are reasonable demand and necessity in the community that which are served by the establishment of the proposed state savings bank;
(7) the public convenience and advantage are served by the establishment of the proposed state savings bank; and
(8) the proposed state savings bank has a reasonable probability of sustaining profitable and beneficial operations in the community.
(B) The board may approve an application to form a stock state savings bank only when:
(1) the proposed state savings bank has prepared a plan to solicit subscriptions for capital stock in an amount determined by the board to be sufficient for the safe and proper operation of the state savings bank, but not less than four million dollars;
(2) the name of the proposed state savings bank does not mislead the public and is not the same as an existing depository institution or so similar to the name of an existing depository institution as to mislead the public, and contains the wording "corporation", "incorporated", "limited", "company", or an abbreviation of one of these words or other words sufficient to distinguish stock savings banks from mutual savings banks;
(3) the character, general fitness, and responsibility of the incorporators, initial board of directors, and initial stockholders of the proposed state savings bank command the confidence of the community in which the proposed state savings bank locates;
(4) all subscriptions for capital stock of the proposed state savings bank have been purchased with legal tender of the United States;
(5) there are reasonable demand and necessity in the community which is served by the establishment of the proposed state savings bank;
(6) the public convenience and advantage are served by the establishment of the proposed state savings bank; and
(7) the proposed state savings bank has a reasonable probability of sustaining profitable and beneficial operations in the community.
(C) The minimum amount of pledges for deposit accounts or subscriptions for capital stock may be adjusted if the board determines that a greater requirement is necessary or that a smaller requirement provides a sufficient capital base. The board's decision must be based upon due consideration of:
(1) the population of the proposed trade area;
(2) the total deposits of the depository institutions operating in the proposed trade area;
(3) the economic conditions of and projections for the proposed trade area;
(4) the business experience and reputation of the proposed management;
(5) the business experience and reputation of the proposed incorporators and directors; and
(6) the projected deposit growth, capitalization, and profitability of the proposed state savings bank, and other factors considered relevant by the board.
SECTION 34-30-110. Incomplete applications; time for approval or rejection of completed applications.
(A) If the board does not receive a completed application within one hundred twenty days of the filing of the preliminary application, the application must be returned to the applicants.
(B) When the board has completed the examination and investigation of the facts relevant to the establishment of the proposed state savings bank, the board shall approve or reject an application within one hundred twenty days of the submission of the completed application.
SECTION 34-30-120. Approval or disapproval of application; order; filing of articles; corporate existence; certificate of authorization, commencement of business; limitation on ownership or control.
(A) After consideration of its findings, and the consideration of other information and evidence, the board shall approve or disapprove the application. The board shall approve the application if it finds that the articles of incorporation are in compliance with Section 34-30-90 and that there is compliance with the criteria in Section 34-30-110, the remainder of this chapter, regulations, and the 1976 Code. The order approving the application may impose reasonable conditions which must be met before a certificate of authorization to transact business is issued.
(B) If the board approves the application, the applicant shall file its articles of incorporation with the Secretary of State.
(C) The corporate existence of a state savings bank begins on the date the approved articles of incorporation are filed with the Secretary of State, unless otherwise provided in the articles of incorporation, but the state savings bank may not commence business before it is in possession of a certificate of authorization to transact business as provided in Section 34-30-150.
(D) A subscriber to the stock of a proposed stock state savings bank, other than its holding company, shall not own or control as principal more than ten percent of a class of voting shares of the state savings bank or its holding company.
SECTION 34-30-130. Insurance on deposit accounts; certification; time for obtaining insurance; excess insurance.
A state savings bank must obtain and maintain insurance on the deposit accounts of all members and customers from an insurance corporation created by an act of Congress. Before licensing of a state savings bank, articles of incorporation duly recorded under Section 34-30-120(C), are sufficient certification to the insuring corporation that the state savings bank is a legal corporate entity. The insurance must be obtained within the time limit prescribed in Section 34-30-140. Subject to the rules or regulations of the board, a state savings bank may obtain or participate in efforts to obtain insurance of deposits that is in excess of the amount eligible for federal insurance of accounts. This insurance is known as "excess insurance".
SECTION 34-30-140. Commencement of business; failure to commence within time limit, extension of time; forfeiture of corporate existence; certificate of authorization.
A newly chartered state savings bank must commence business within one year after corporate existence begins. A state savings bank that does not commence business within this time, forfeits its corporate existence, unless the board, before the expiration of the one-year period, approves an extension of the time within which the state savings bank may commence business, upon a written request stating the reasons for the request. Upon forfeiture, the articles of incorporation expire and action taken in connection with the incorporation and chartering of the state savings bank, with the exception of fees paid to the board, becomes null and void. The board shall determine if a state savings bank has failed to commence business within one year, without extension as provided in this section, and shall notify the Secretary of State and the register of deeds in the county in which the state savings bank is located that the articles of incorporation have expired. If the board finds that the state savings bank has in good faith complied with all the requirements of law and all conditions imposed, and that the state savings bank's deposit accounts are properly insured, it shall promptly issue a certificate of authorization to transact a general state savings bank business.
SECTION 34-30-150. Amendment of articles of incorporation; certification, submission, approval; quorum, voting requirement.
An amendment to the articles of incorporation of a state savings bank, which shall have been adopted and recommended by the board of directors of the state savings bank, must be made at an annual or special meeting of the state savings bank, held in accordance with Sections 34-30-1060 and 34-30-1070, by a majority of votes or shares cast by members or stockholders present in person or by proxy at the meeting. An amendment must be certified by the appropriate corporate official, submitted to the board for approval or rejection, and if approved, then certified by the board and recorded as provided in Section 34-30-130 for articles of incorporation. The articles of incorporation may provide for a greater quorum or voting requirement for members or stockholders or voting groups of stockholders than is otherwise provided in this chapter.
SECTION 34-30-160. Confidentiality of records; inspection and examination; release; list of members or stockholders.
(A) The books and records of a state savings bank must be confidential and may be made available for inspection and examination only:
(1) to the board or its duly authorized representatives;
(2) to persons duly authorized to act for the state savings bank;
(3) to any federal or state instrumentality or agency authorized to inspect or examine the books and records of an insured depository institution;
(4) as compelled by a court of competent jurisdiction;
(5) as compelled by legislative subpoena as provided by law;
(6) as authorized by the board of directors of the state savings bank; or
(7) as provided in subsections (B), (C), and (D).
(B) A depositor, borrower, or stockholder has the right to inspect the books and records of a state savings bank as pertain to his loans, his accounts, or the determination of his voting rights.
(C) The books and records pertaining to the accounts, loans, and voting rights of depositors, borrowers, and stockholders must be kept confidential by the state savings bank and its directors, officers, and employees and may not be released except upon express written authorization of the account holder as to his own accounts, loans, or voting rights. However, information relating to a loan made by an association may be released without the borrower's authorization in a manner prescribed by the board of directors for the purpose of meeting the needs of commerce and for fair and accurate credit information.
(D) A member, stockholder, or other person must not have access to or be furnished or possessed of a partial or complete list of the members or stockholders except upon express action authorized by the board of directors.
SECTION 34-30-170. Establishment of branch offices; application, fee; approval or denial; corporate office.
(A) A state savings bank may apply to the board for permission to establish a branch office. The application must be in the form prescribed by the board and accompanied by the proper branch application fee. The board shall approve or deny branch applications within one hundred twenty days of filing. Nothing in this chapter prohibits a state savings bank from establishing a corporate office or offices upon prior written notification to the board. A corporate office must be established primarily for the purpose of managing the administrative functions of the state savings bank and service corporations and must not accept deposits or issue payment for withdrawals of certificates or accounts.
(B) The board shall approve a branch application when:
(1) the applicant has evidenced financial responsibility;
(2) the applicant has sufficient net worth as determined by the board; and
(3) the applicant has an acceptable internal control system that includes certain basic internal control requirements essential to the protection of assets and the promotion of operational efficiency regardless of the size of the applicant.
(C) Upon receipt of a branch application, the board shall examine or cause to be examined all the relevant facts connected with the establishment of the proposed branch office. If it appears to the satisfaction of the board that the applicant has complied with all the requirements in this section and the regulations for the establishment of a branch office and that the state savings bank is otherwise lawfully entitled to establish the branch office, then the board shall approve the branch application.
SECTION 34-30-180. Change of office location; information, evaluation.
The board of directors of a state savings bank may change the location of a branch office or the principal office of the state savings bank with the prior written approval of the board. The board may request, and the state savings bank must provide, information that the board determines is necessary to evaluate the request.
SECTION 34-30-190. Discontinuance of branch office operation.
The board of a state savings bank may discontinue the operation of a branch office with the prior written approval of the board.
SECTION 34-30-200. Loan production office, opening or closing.
A state savings bank may open or close a loan production office upon thirty days' written notice to the board.
ARTICLE 3.
CORPORATE CHANGES
SECTION 34-30-300. Conversion to state savings bank; application, examination, fee; conversion plan, amendment; vote, filing of results; approval.
(A) Any association or state or national bank, upon a majority vote of its board of directors, may apply to the board for permission to convert to a state savings bank and for certification of appropriate amendments to its articles of incorporation to effect the change. Upon receipt of an application to convert to a state savings bank, the board shall examine all facts connected with the conversion. The depository institution applying for permission to convert must pay a fee established by the board.
(B) The converting depository institution must submit a plan of conversion as a part of the application to the board. The board may approve it with or without amendment. If the board approves it, the plan must be submitted to the members or stockholders as provided in subsection (C) of this section. If the board refuses to approve the plan, the objections must be stated in writing and the converting depository institution must be given an opportunity to amend the plan to obviate the objections.
(C) After lawful notice to the members or stockholders of the converting depository institution and full and fair disclosure, the substance of the plan must be approved by the affirmative vote of a majority of votes or shares present. The vote by the members or stockholders may be in person or by proxy. The results of the vote as certified by an appropriate officer of the converting depository institution must be filed with the board. The board then shall approve or disapprove the requested conversion to a state savings bank. Upon approval of the conversion, the board shall supervise and monitor the conversion process and shall ensure that the conversion is conducted lawfully and under the approved plan of conversion.
SECTION 34-30-310. Conversion to federal charter; procedure.
A state savings bank, stock or mutual, organized and operated under this chapter, may convert to a federal charter in accordance with the laws and regulations of the United States and with the same force and effect as though originally incorporated under those laws. The procedure to effect this conversion is:
(1) Following the favorable majority vote of the board of directors of the state savings bank, a meeting of the members or stockholders must be held upon not less than fifteen days' notice to each member or stockholder. Notice of the meeting may be mailed to each member or stockholder, postage prepaid, to the last known address, or the board of directors may cause notice of the meeting to be published, once a week for two weeks preceding the meeting, in a newspaper of general circulation in the county where the state savings bank has its principal office. It is sufficient notice of the purpose of the meeting if the notice contains substantially the following statement: "The purpose of this meeting is to consider the conversion of this state chartered savings bank to a federal charter, under the laws of the United States". An appropriate officer of the state savings bank shall make proof by affidavit at the meeting of due service of the notice or call for the meeting.
(2) At the meeting of the members or stockholders of the state savings bank, the members or stockholders, by affirmative vote of a majority of votes or shares present, in person or by proxy, may resolve to convert the state savings bank to a federal charter. A copy of the minutes of the meeting of the members or stockholders, as certified by an appropriate officer of the state savings bank, must be filed in the office of the board within ten days after the date of the meeting. The filed certified copy is prima facie evidence of the holding and the action of the meeting.
(3) Within a reasonable time after the receipt of a certified copy of the minutes, the board shall issue a certificate of approval of the conversion. The state savings bank must record the certificate in the office of the Secretary of State.
(4) The state savings bank must file an application, in the manner prescribed or authorized by the laws and regulation of the United States, to consummate the conversion to a federal charter. A copy of the charter or authorization issued to the state savings bank by the appropriate federal regulatory authority must be filed with the board. Upon filing with the board, the state savings bank ceases to be a state savings bank and becomes a federal depository institution.
(5) When a state savings bank converts to a federal charter it ceases to be a state savings bank under the laws of this State, except that its corporate existence is considered to be extended for the purpose of prosecuting or defending suits by or against it and of enabling it to close its business affairs as a state savings bank and to dispose of and convey its property. At the time when the conversion becomes effective all the property of the state savings bank including all its rights, title, and interest in and to all property of whatever kind, whether real, personal, or mixed, and things in action, and every right, privilege, interest, and asset of any conceivable value or benefit then existing, belonging, or pertaining to it, or which would inure to it, must be vested immediately by act of law and without any conveyance or transfer, and without any further act or deed, in and become the property of the federal depository institution, which shall have, hold, and enjoy the same in its own right as fully and to the same extent as the same was possessed, held, and enjoyed by the state savings bank; and the federal depository institution as of the effective time of the conversion shall succeed to all the rights, obligations, and relations of the state savings bank.
SECTION 34-30-320. Conversion to federal charter with change from stock to mutual, or mutual to stock; conversion to state charter with change from mutual to stock.
(A) If a state charter converts to a federal charter in which the form of organization also is changed from stock to mutual, or from mutual to stock, the conversion shall proceed initially as a charter conversion under Section 34-30-310. After the state savings bank becomes a federal depository institution, the federal regulatory authority governs the continuing conversion of the form of ownership of the newly converted depository institution.
(B) If a federal charter converts to a state charter conversion in which the form of organization also is changed from mutual to stock, the conversion proceeds initially as a charter conversion under Section 34-30-300. After the federal depository institution becomes a state savings bank, Section 34-30-330 or 34-30-340 governs the continuing conversion of the form of ownership of the newly converted state savings bank.
(C) This section does not apply to the simultaneous charter and organization conversion accomplished in conjunction with a merger under Section 34-30-360.
SECTION 34-30-330. Mutual state savings bank conversion to stock; application, fee; conversion plan; amendment; approval; vote.
(A) A mutual state savings bank may convert from mutual to the stock form of organization as provided in this section.
(B) A mutual state savings bank may apply to the board for permission to convert to a stock state savings bank and for certification of appropriate amendments to the state savings bank's articles of incorporation. Upon receipt of an application to convert from mutual to stock form, the board shall examine all facts connected with the requested conversion. The state savings bank applying for permission to convert must pay a fee established by the board.
(C) The state savings bank must submit a plan of conversion as a part of the application to the board. The board may approve it with or without amendment, if it is reasonably anticipated that:
(1) after conversion, the state savings bank is in sound financial condition and is soundly managed;
(2) the conversion does not impair the capital of the state savings bank nor adversely affect the state savings bank's operations;
(3) the conversion is fair and equitable to the members of the state savings bank and no person whether member, employee, or otherwise, receives any inequitable gain or advantage by reason of the conversion;
(4) the state savings bank services provided to the public by the state savings bank are not adversely affected by the conversion;
(5) the substance of the plan has been approved by a vote of two-thirds of the board of directors of the state savings bank;
(6) all shares of stock issued in connection with the conversion are offered for sale first to the members of the state savings bank;
(7) all stock is offered for sale to members of the state savings bank and others in prescribed amounts and otherwise under a formula and procedure that is fair and equitable and is fairly disclosed to all interested persons; and
(8) the plan provides a statement as to whether stockholders have preemptive rights to acquire additional or treasury shares of the state savings bank.
If the board approves the plan, the plan must be submitted to the members as provided in subsection (D). If the board refuses to approve the plan, the board shall state the objections in writing and give the converting state savings bank an opportunity to amend the plan to obviate the objections.
(D) After lawful notice to the members of the state savings bank and full and fair disclosure, the substance of the plan must be approved by a majority of the total votes cast by members of the state savings bank present in person or by proxy, or such greater voting requirement as required by federal law. The results of the vote as certified by an appropriate officer of the state savings bank must be filed with the board. The board shall then either approve or disapprove the requested conversion. After approval of the conversion, the board shall supervise and monitor the conversion process and shall ensure that the conversion is conducted lawfully and under the state savings bank's approved plan of conversion.
SECTION 34-30-340. Merger or consolidation of state savings banks; procedure.
Two or more mutual state savings banks or two or more stock state savings banks organized and operating may merge or consolidate into a single state savings bank. The procedure to effect the merger is:
(1) The directors, or a majority of them, of the state savings banks that desire to merge, at separate meetings, may enter into a written agreement of merger specifying each state savings bank to be merged and the state savings bank that is to receive into itself the merging state savings bank or banks, and prescribing the terms and conditions of the merger and the mode of carrying it into effect. The merger agreement may provide other provisions with respect to the merger as appear necessary or desirable, or as the board may require.
(2) A meeting of members or stockholders of each of the state savings banks must be held separately upon written notice of not less than thirty days to members or stockholders of each state savings bank. The notice must specify the time, place, and purpose of the meeting. Notice must be made by personal service or postage prepaid mail to the last address of each member or stockholder appearing upon the records of the stock state savings bank, or in the alternative for a merger of mutual state savings banks, by publication of notice at least once a week for two weeks preceding the meeting in one or more newspapers of general circulation in the county or counties where each state savings bank has its principal or a branch office, or in a newspaper of general circulation in an adjoining county if none is available in the county. An appropriate officer of the state savings bank shall make proof by affidavit at the meeting of the due service of the notice or call for the meeting.
(3) The merger agreement and copies of the minutes of the meetings of the respective boards of directors as verified by the secretaries of the respective state savings banks must be submitted to the board, who shall investigate the affairs of the state savings banks proposing to merge. Each state savings bank must pay a fee established by the board. If, as a result of the investigation, the board concludes that factors are favorable, the board shall approve the merger in writing.
(4) At separate meetings of members or stockholders of the respective state savings banks, members or stockholders may adopt, by an affirmative vote of a majority of the votes or shares present, in person or by proxy, a resolution to merge into a single state savings bank upon the terms of the merger agreement as has been agreed upon by the directors of the respective state savings banks and as approved by the board. Upon the adoption of the resolution, a copy of the minutes of the proceedings of the meetings of members or stockholders of the respective state savings banks, certified by an appropriate officer of the merging state savings banks, must be filed in the office of the board. The board then shall approve or disapprove the merger for compliance with this chapter. If the board approves the merger, it shall issue a certificate of approval of the merger. Upon filing with the Secretary of State, the merger agreement takes effect according to its terms and is binding upon all members or stockholders of the state savings banks merging, and it is the act of merger of the constituent state savings banks under the laws of this State, and the certificate or certified copy of filing is evidence of the agreement and act of merger of the state savings banks and the observance and performance of all acts and conditions necessary to have been observed and performed before the merger. If the board disapproves the merger, the board shall issue a written statement of the reasons for the disapproval and notify the state savings banks to that effect.
(5) Upon the merger of any state savings bank, as above provided, into another:
(a) its corporate existence is merged into that of the receiving state savings bank; and all its right, title, interest in and to all property of any kind, whether real, personal, or mixed, and things in action, and every right, privilege, interest, or asset of any conceivable value or benefit then existing belonging or pertaining to it, or which would inure to it under an unmerged existence, immediately by law and without any conveyance or transfer, and without any further act or deed, must be vested in and become the property of the receiving state savings bank, which shall have, hold, and enjoy the same in its own right as fully and to the same extent as if the same were possessed, held, or enjoyed by the state savings banks so merged; and the receiving state savings bank must absorb fully and completely the state savings bank or banks so merged;
(b) its rights, liabilities, obligations, and relations to a person remain unchanged and the state savings bank into which it has been merged must succeed, by the merger, to all the relations, obligations, and liabilities as though it had itself assumed or incurred them. An obligation or liability of a member, customer, or stockholder in a state savings bank that is a party to the merger must not be affected by the merger, but obligations and liabilities must continue as they existed before the merger, unless otherwise provided in the merger agreement;
(c) a pending action or other judicial proceeding to which a merged state savings bank is a party, is not abated or discontinued by reason of the merger, but may be prosecuted to final judgment, order, or decree in the same manner as if the merger had not been made; or the receiving state savings bank may be substituted as a party to the action or proceeding, and a judgment, order, or decree may be rendered to or against it that might have been rendered for or against the other state savings bank if the merger had not occurred.
(6) Notwithstanding another provision of this section, the board may waive any or all of the foregoing requirements upon finding that waiver would be in the best interest of members or stockholders of the merging state savings banks.
SECTION 34-30-350. Merger of state savings banks and federal depository institutions.
Any two or more depository institutions, when one or more is a state savings bank and one or more is a federal depository institution operating in South Carolina, may merge under either a state savings bank charter or a federal charter.
SECTION 34-30-360. Merger of stock state savings banks with banks or associations; merger plan; amendment; approval; vote.
(A) A stock state savings bank, upon a majority vote of its board of directors, may apply to the board for permission to merge with a bank, as defined in Chapter 25, or an association, as defined in Section 34-28-30.
(B) The state savings bank shall submit a plan of merger as a part of the application to the board. The board may approve the plan of merger with or without amendment.
If the board approves it, the plan must be submitted to stockholders or members as provided in subsection (C) of this section. If the board refuses to approve the plan, the board shall state the objections in writing and give the merging state savings bank an opportunity to amend the plan to obviate the objections.
(C) After lawful notice to stockholders or members of the state savings bank and full and fair disclosure, the substance of the plan must be approved by the affirmative vote of a majority of the votes or shares present, in person or by proxy. The results of the vote as certified by an appropriate officer of the state savings bank must be filed with the board. The board then shall approve or disapprove the requested merger.
SECTION 34-30-370. Voluntary dissolution of state savings banks.
A state savings bank may be dissolved voluntarily by a majority vote of the board of directors when substantially all of the assets have been sold for the purpose of terminating the business of the savings bank and when a certificate of dissolution is recorded in the manner required by this chapter for the recording of articles of incorporation.
SECTION 34-30-380. Resolution to dissolve and liquidate state savings banks and adopt plan of voluntary dissolution; election of liquidators; execution of plan, procedure.
At any annual or special meeting called for the purpose of dissolution, a state savings bank, by an affirmative vote, in person or by proxy, of at least two-thirds of the total number of shares or votes that all members or stockholders of the association are entitled to cast, may resolve to dissolve and liquidate the state savings bank and adopt a plan of voluntary dissolution. Upon adoption of the resolution and plan of voluntary dissolution, the members or stockholders shall elect not more than three liquidators who shall post bond as required by the board. The liquidators shall have full power to execute the plan by the following procedure:
(1) A copy of the resolution, certified by an appropriate officer of the state savings bank, and the minutes of the meeting of members or stockholders, the plan of liquidation, and an itemized statement of the state savings bank's assets and liabilities, sworn to by a majority of its board of directors, must be filed with the board. The minutes of the meeting of members or stockholders must be certified by an appropriate officer of the association, and describe the notice given and the time of mailing, the vote on the resolution, the total number of shares or votes that all members of the state savings bank were entitled to cast, and the names of the elected liquidators.
(2) If the board finds that the proceedings comply with this chapter and that the plan of liquidation is not unfair to a person affected, the board shall attach a certificate of approval to the plan and forward one copy to the liquidators and one copy to the state savings bank's federal deposit account insurance corporation. Once the board has approved the resolution and the plan of liquidation, it is unlawful for the state savings bank to accept any additional deposit accounts or additions to deposit accounts or make any additional loans, but all its income and receipts in excess of actual expenses of liquidation of the state savings bank must be applied to the discharge of its liabilities.
(3) The liquidating state savings bank must pay a reasonable compensation, subject to the approval of the board, to the appointed liquidator.
(4) The plan is effective upon the recording of the board's certificate of approval in the manner required by this chapter for the recording of the articles of incorporation.
(5) The liquidation of the state savings bank is subject to the supervision and examination of the board.
SECTION 34-30-390. Final report and accounting of liquidation; approval of report; certificate of dissolution, recording.
Upon completion of liquidation, the liquidator shall file with the board a final report and accounting of the liquidation. The board's approval of the report operates as a complete and final discharge of the liquidator, the board of directors, and each member or stockholder in connection with the liquidation of the state savings bank. Upon approval of the report, the board shall issue a certificate of dissolution of the state savings bank and shall record it in the manner required by this chapter for the recording of articles of incorporation. The dissolution is effective upon the recording of the certificate of dissolution.
SECTION 34-30-400. Limitations on mergers.
No merger may be approved by the board under this Article 3:
(1) which would result in a monopoly, or which would be in furtherance of a combination or conspiracy to monopolize or to attempt to monopolize the banking business of this State; or
(2) the effect of which in this State would be substantially to lessen competition, or to tend to create a monopoly, or which in another manner would be in restraint of trade, unless it finds that the anticompetitive effects of the proposed transaction clearly are outweighed in the public interest by the probable effect of the proposed merger in meeting the purposes of this chapter or the convenience and needs of the primary service area served.
SECTION 34-30-410. Short form merger, consolidation, conversion, or combination merger and conversion.
Notwithstanding another provision of this chapter, to protect the public, including members, depositors, or stockholders of a state savings bank, the board, upon making a finding that a state savings bank is unable to operate in a safe and sound manner, may authorize or require a short form merger, consolidation, conversion, or combination merger and conversion of the state savings bank, or another transaction.
SECTION 34-30-420. Applications for permission to organize interim state savings banks; preliminary approval.
(A) Article 2 of this chapter does not apply to applications for permission to organize an interim state savings bank so long as the application is approved by the board.
(B) Preliminary approval of an application for permission to organize an interim state savings bank is conditional upon the board's approval of an application to merge the interim state savings bank and an existing stock state savings bank or on the board's approval of another transaction.
ARTICLE 4.
SUPERVISION
SECTION 34-30-510. Powers and duties of board.
The board shall perform the duties and exercise the powers as to state savings banks organized or operated under this chapter, except as otherwise provided in this chapter.
SECTION 34-30-520. Procedures to implement provisions and define terms; application of State Administrative Procedures Act; cease and desist orders; suspension of directors, officers, or committee members; authorization to engage in activities of federally chartered savings banks.
(A) The board may establish procedures to implement a provision of this chapter and to define a term not defined in the chapter so as to foster and maintain an effective level of savings bank services and the security of depositor accounts. The provisions of the State Administrative Procedures Act apply to all regulations of the board under this chapter.
(B) After ten days' notice and hearing in which the savings bank may appear, the board may issue a cease and desist order, having determined from competent and substantial evidence that a savings bank is engaged or has engaged or when the board has reasonable cause to believe the savings bank is about to engage in an unsafe or unsound practice, or is violating or has violated or the board has reasonable cause to believe is about to violate a material provision of a law, regulation, or a condition imposed in writing by the board or a written agreement made with the board.
(C) After ten days' notice and hearing in which the director, officer, or committee member may appear, the board may suspend from office and prohibit from further participation in the conduct of the affairs of a savings bank any director, officer, or committee member who has committed a violation of a law, regulation, or of a cease and desist order or who has engaged or participated in an unsafe or unsound practice in connection with the savings bank or who has committed or engaged in any act, omission, or practice which constitutes a breach of that person's fiduciary duty as any director, officer, or committee member, when the board has determined that the action or actions have resulted or will result in substantial financial loss or other damage that seriously prejudices the interests of the depositors.
(D) By issuing operational instructions, the board may authorize state savings banks to engage in activities approved for federally chartered savings banks.
SECTION 34-30-530. Adoption of rules, regulations, definitions, and forms; recording or reproducing of records; printed reproductions.
(A) The board shall adopt rules or regulations, definitions, and forms as necessary for the supervision and regulation of state savings banks and for the protection of the public investing in state savings banks.
(B) Without limiting the generality of subsection (A) of this section the board may adopt rules or regulations, definitions, and forms with respect to the following:
(1) reserve requirements;
(2) stock ownership and dividends;
(3) stock transfers;
(4) original incorporators, stockholders, directors, officers, and employees of a state savings bank;
(5) bylaws;
(6) the operation of state savings banks;
(7) deposit accounts, bonus plans, and contracts for savings programs;
(8) loans and loan expenses;
(9) investments and resource management;
(10) forms or proxies, holders of proxies, and proxy solicitations;
(11) types of financial records to be maintained by state savings banks;
(12) retention periods of various financial records;
(13) internal control procedures of state savings banks;
(14) conduct and management of state savings banks;
(15) chartering and branching;
(16) liquidations, dissolutions, and receiverships;
(17) mergers, consolidations, conversion, and combination mergers and conversions;
(18) interim state savings banks;
(19) reports that may be required by the board;
(20) conflicts of interest;
(21) service corporations; and
(22) subsidiary state savings banks and holding companies, including the rights of members, levels of investment in the subsidiaries, and stock sales.
(C) A state savings bank may cause any or all of its records to be recorded, copied, or reproduced by:
(1) photostatic, photographic, or microfilming process; or
(2) electronic graphic imaging through scanning, digitizing, or other means.
These processes or means must correctly copy, reproduce, or form a medium for copying or reproducing the original record so that an accurate facsimile of the original is printed or otherwise reproduced on paper, film, or similar medium.
(D) The printed reproduction is considered an original record for all purposes and must be treated as an original record in all courts or administrative agencies for the purpose of its admissibility into evidence, regardless of whether the institution retains or disposes of the original, provided:
(1) the original document otherwise qualified as a business record pursuant to the South Carolina Uniform Business Records as Evidence Act or the appropriate state or federal rules or regulations of evidence; and
(2) a custodian or other qualified witness as those terms are used in the appropriate state or federal rules of evidence certifies that the printed reproduction is a true and correct copy of the original.
SECTION 34-30-540. Examinations and investigations; report; prohibition against delay or obstruction of examinations, refusal to exhibit records, false statements.
(A) The board is authorized to examine and investigate everything relating to the business of a state savings bank or its holding company.
(B) The board shall furnish a copy of the report to the state savings bank examined and, upon request, may furnish a copy of, or excerpts from, the report to the insurer of accounts.
(C) A state savings bank may not wilfully delay or obstruct an examination. A person failing to comply with this subsection is guilty of a misdemeanor.
(D) A person who possesses or controls books, accounts, or papers of a state savings bank shall not refuse to exhibit them to the board or the board's agents on demand, or knowingly or willingly make a false statement in regard to them. A person failing to comply with this subsection is guilty of a misdemeanor.
SECTION 34-30-550. Supervision and examination fees.
Every state savings bank, including state savings banks in the process of voluntary liquidation, or its holding company, shall pay into the office of the board fees for supervision and examination, and at the times, as prescribed by the board.
SECTION 34-30-560. Failure of examination to disclose complete financial condition; audit of examination; revaluation of assets or liabilities; expenses.
(A) If, in the opinion of the board, an examination conducted under Section 34-30-550 fails to disclose the complete financial condition of a state savings bank, the board, in order to ascertain its complete financial condition, may make an extended:
(1) audit of examination of the state savings bank or cause an audit or examination to be made by an independent auditor at the expense of the state savings bank; and
(2) revaluation of the assets or liabilities of the state savings bank or cause an independent appraiser to make a revaluation at the expense of the state savings bank.
(B) The board may collect from the state savings bank a reasonable sum for actual or necessary expenses of revaluation or audit of examination.
SECTION 34-30-570. Access of board and agents to records; subpoena powers; administration of oaths; production of documents; correction of improper entries; failure to comply with subpoena, refusal to testify; contempt proceedings.
(A) The board and the board's agents:
(1) shall have free access to all books and records of a state savings bank, or its service corporation or holding company, that relate to its business, and the books and records kept by an officer, agent, or employee relating to or upon which any record is kept;
(2) may subpoena witnesses and administer oaths or affirmations in the examination of any director, officer, agent, or employee of a state savings bank, or its service corporation or holding company or of another person in relation to its affairs, transactions, and conditions;
(3) may require the production of records, books, papers, contracts, and other documents; and
(4) may order that improper entries be corrected on the books and records of a state savings bank.
(B) The board may issue subpoenas duces tecum.
(C) If a person fails to comply with a subpoena or a party or witness refuses to testify on a matter, a court of competent jurisdiction, on the application of the board, shall compel compliance by proceedings for contempt as in the case of disobedience of the requirements of a subpoena issued from the court or a refusal to testify in the court.
SECTION 34-30-580. Test appraisals of collateral securing loans; appraisers; appraisals by insurer of accounts; costs and expenses.
(A) The board may direct the making of test appraisals of real estate and other collateral securing loans made by state savings banks doing business in this State, employ competent appraisers, or prescribe a list from which competent appraisers may be selected, for the making of these appraisals by the board, and all other acts incident to the making of test appraisals.
(B) Instead of causing an appraisal to be made, the board may accept an appraisal caused to be made by the insurer of accounts.
(C) The expense and cost of test appraisals made under this section must be defrayed by the state savings bank subjected to the test appraisals, and each state savings bank doing business in this State shall pay all reasonable costs and expenses of the test appraisals when it is directed.
SECTION 34-30-590. Confidentiality of records or information; disclosure of specific information; exchange of information with state, federal, or reserve or insuring agencies; violations by state officials, liability; copy fees.
(A) The following records or information of the board, or its agents, are confidential and must not be disclosed:
(1) information obtained or compiled in preparation of or anticipation of, or during an examination, audit, or investigation of any association;
(2) information reflecting the specific collateral given by a named borrower, the specific amount of stock owned by a named stockholder, a stockholder list supplied to the board under Section 34-30-170, or specific deposit accounts held by a named member or customer;
(3) information obtained, prepared, or compiled during or as a result of an examination, audit, or investigation of a state savings bank by an agency of the United States;
(4) information and reports submitted by state savings banks to federal regulatory agencies;
(5) information and records regarding complaints