BY REPRESENTATIVES Bacon and Gordon;
also SENATOR Chlouber.
CONCERNING THE REGULATION OF INDUSTRIAL BANKS, AND,
IN CONNECTION THEREWITH, REPEALING REFERENCES TO THE INDUSTRIAL
BANK GUARANTEE FUND AND PROVIDING FOR PARITY BETWEEN STATE AND
INDUSTRIAL BANKS.
Be it enacted by the General Assembly of the State
of Colorado:
SECTION 1. Repeal.
Parts 2, 3, 4, and 5 of article 22 of title 11, 1122702,
1122703, 1122704, 1122705,
and 1122706, Colorado Revised Statutes, are repealed.
SECTION 2. 1122106,
Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW
SUBSECTION to read:
1122106. Powers
general corporate loans and investments rules and
regulations of banking board. (7) (a) IT
IS UNLAWFUL FOR AN INDUSTRIAL BANK, OR AN OFFICER, DIRECTOR, EMPLOYEE,
OR AFFILIATE OF AN INDUSTRIAL BANK TO:
(I) ENGAGE IN THE BUSINESS OF ISSUING,
FLOATING, UNDERWRITING, DISTRIBUTING, OR PROMOTING THE SALE OF
STOCKS, BONDS, OR OTHER SECURITIES; OR
(II) BE AN OFFICER, TRUSTEE, DIRECTOR,
EMPLOYEE, STOCKHOLDER, OR PARTNER OF ANY PERSON ENGAGED PRINCIPALLY
IN SUCH BUSINESS.
(b) NOTHING IN PARAGRAPH (a) OF THIS SUBSECTION
(7) SHALL INCLUDE SECURITIES ISSUED OR GUARANTEED AS TO PRINCIPAL
AND INTEREST BY:
(I) THE UNITED STATES OR ANY AGENCY OF
THE UNITED STATES;
(II) A STATE OR TERRITORY OF THE UNITED
STATES; OR
(III) A SUBDIVISION, INSTRUMENTALITY,
OR PUBLIC AUTHORITY ORGANIZED UNDER THE LAWS OF SUCH STATE OR
TERRITORY PURSUANT TO AN INTERSTATE COMPACT BETWEEN TWO OR MORE
STATES.
SECTION 3. 1122108
(1) (a), Colorado Revised Statutes, is amended to read:
1122108. Forbidden powers.
(1) No industrial bank has power to do any of the
following:
(a) To carry
demand bank accounts ACCEPT DEMAND
DEPOSITS THAT THE DEPOSITOR MAY WITHDRAW BY CHECK OR SIMILAR MEANS
FOR PAYMENT TO THIRD PARTIES;
SECTION 4. Part
1 of article 22 of title 11, Colorado Revised Statutes, is amended
BY THE ADDITION OF A NEW SECTION to read:
1122107.5. Trust, fiduciary,
and agency powers when. IN ADDITION
TO ITS OTHER POWERS, AN INDUSTRIAL BANK THAT IS AUTHORIZED BY
ITS CHARTER TO EXERCISE TRUST POWERS, UPON PROPER QUALIFICATION
UNDER THIS ARTICLE, HAS THE POWER TO ACT AS A FIDUCIARY IN ANY
CAPACITY. IT MAY ALSO ACT AS REGISTRAR, TRANSFER AGENT, FISCAL
AGENT, OR ATTORNEYINFACT AND HAVE THE POWER TO RECEIVE,
MANAGE, AND APPLY SINKING FUNDS. EVERY INDUSTRIAL BANK THAT IS
AUTHORIZED BY ITS CHARTER TO EXERCISE TRUST POWERS PURSUANT TO
THIS SECTION SHALL MAKE AND FILE WITH THE COMMISSIONER AN ANNUAL
REPORT OF TRUST ASSETS AND SUCH OTHER REPORTS, AS THE BANKING
BOARD MAY REQUIRE BY RULE AND REGULATION, ON SUCH FORMS AS MAY
BE PRESCRIBED BY THE BANKING BOARD. NO REPORT FILED PURSUANT
TO THIS SECTION SHALL BE REQUIRED TO BE PUBLISHED.
SECTION 5. Repeal. 1122108 (1) (c), Colorado Revised Statutes, is repealed as follows:
1122108. Forbidden powers.
(1) No industrial bank has power to do any of the
following:
(c) To accept
trusts or act as guardian, administrator, or judicial trustee
in any form, but the foregoing shall not prohibit an industrial
bank from acting in the capacity of escrow agent;
SECTION 6. 1122109
(11), Colorado Revised Statutes, is amended to read:
1122109. Subject to corporation
laws powers of banking board examinations by commissioner
reports by industrial banks. (11) Industrial
banks in all their public advertisements shall use their
full corporate name, and the corporate name therein displayed
shall be in letters of the same size and prominence; but the foregoing
THE WORDS "INDUSTRIAL BANK" IN THEIR TITLES; EXCEPT
THAT SUCH WORDS MAY APPEAR AFTER OR BELOW THE NAME OF THE INDUSTRIAL
BANK IN A SMALLER FONT SIZE THAN THE NAME OF THE INDUSTRIAL BANK.
THE REQUIREMENT TO USE THE WORDS "INDUSTRIAL BANK"
shall not be applicable to signs erected in, about, or upon the
premises from which the operations of the industrial bank are
carried on. No industrial bank shall advertise, display, distribute,
or broadcast, or cause or permit to be advertised, displayed,
distributed, or broadcasted, in any manner whatsoever, false,
misleading, or deceptive statements or representations with regard
to the charges for, or terms of, loans, or with reference to its
savings deposits guaranty corporation
coverage, or certificates of deposit.
The banking board has the power to require that all advertisements
of any industrial bank be stated fully and clearly and in such
manner as the banking board may deem necessary to prevent misunderstanding
thereof by prospective borrowers, depositors, or purchasers of
certificates of deposit.
SECTION 7. 1122115
(1) (l), Colorado Revised Statutes, is amended to read:
1122115. Unsound business
practices. (1) For the purposes
of this article, an unsound business practice includes, but is
not limited to, the following:
(l) The extension of credit to any officer,
director, or principal shareholder of a bank, or any related interest
of that person, unless the extension of credit:
(I) (A) Is made on substantially
the same terms including interest rates, maturity, and collateral
as those prevailing at the time for comparable transactions by
a bank with other persons; and
OR
(B) IS MADE PURSUANT TO A BENEFIT OR COMPENSATION
PROGRAM THAT IS WIDELY AVAILABLE TO EMPLOYEES OF THE BANK AND
DOES NOT GIVE PREFERENCE TO ANY INSIDER; AND
(II) Does not involve more than the normal
risk of repayment or present other unfavorable features. or
(III) Repealed.
SECTION 8. The
introductory portion to 1122107 (1) (e), Colorado
Revised Statutes, is amended to read:
1122107. Special powers.
(1) Every industrial bank, in addition to the powers
granted by this article or the rules and regulations promulgated
by the banking board, has all of the following powers:
(e) The right to issue, with the prior
approval of the banking board based upon the facts and circumstances
of each case, capital notes, debentures, or evidences of indebtedness
which will not be covered by the A
guaranty of the "Industrial Bank
Savings Guaranty Act", parts 2 to 5 and 7 of this article,
and may be included as a part of the capital and surplus and which:
SECTION 9. 1122602
(2) (a), Colorado Revised Statutes, is amended to read:
1122602. Involuntary liquidation
by banking board reorganization.
(2) (a) The banking board shall take possession
of a bank by posting upon the premises a notice reciting that
it is assuming possession pursuant to this article and the time,
not earlier than the posting of the notice, when such possession
shall be deemed to commence. A copy of the notice shall be filed
in the district court of the county in which the bank is located.
The banking board shall notify the federal reserve bank of the
district of its taking possession of any bank which is a member
of the federal reserve system and shall notify the federal deposit
insurance corporation of its taking possession of any bank which
is a member of the federal deposit insurance corporation. and
shall notify the guaranty corporation of his taking possession
of any bank which is a member of such guaranty corporation or
which has an outstanding balance on a capital assistance loan
under section 1122702.
SECTION 10. 1122616
(5), Colorado Revised Statutes, is amended to read:
1122616. Distribution of
guaranty corporation assets. (5) If
all claims for savings obligations up to the amounts guaranteed
under section 1122305 and all other liabilities of
the guaranty corporation have been satisfied, the remaining assets
of the guaranty corporation, including any distribution from liquidations,
if any, shall be distributed by the bank receiver. in
accordance with section 1122705.
SECTION 11. Safety
clause. The general assembly hereby finds, determines, and
declares that this act is necessary for the immediate preservation
of the public peace, health, and safety.
____________________________ ____________________________
Charles E. Berry Tom Norton
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Judith M. Rodrigue Patricia K. Dicks
CHIEF CLERK OF THE HOUSE ASSISTANT SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
_________________________________________
Roy Romer
GOVERNOR OF THE STATE
OF COLORADO