§ 36a-210 — (Formerly Sec. 36-30). Transfer of assets.

Connecticut § 36a-210

• Jurisdiction: Connecticut
• Title 36a: The Banking Law of Connecticut
• Ch. 664c: Fundamental Changes Involving Banks, Branches, Automated Teller Machines, Virtual Banking and Bank Holding Companies

Text

(a)(1) With the approval of the commissioner, a Connecticut bank may transfer all or a significant part of its assets or business to a bank. The transferring bank shall have been in existence and continuously operating for at least five years unless the commissioner waives this requirement. The commissioner shall not approve such transfer if (A) the acquiring bank, including all insured depository institutions which are affiliates of such bank, upon consummation of the transfer, would control thirty per cent or more of the total amount of deposits of insured depository institutions in this state, unless the commissioner permits a greater percentage of such deposits, or (B) the programs, policies and procedures relating to anti-money-laundering activities of the acquiring institution are inadequate, or the acquiring institution does not have a record of compliance with anti-money-laundering laws and regulations. The transferring and acquiring banks shall file with the commissioner a written agreement approved and executed by a majority of the governing board of each bank prescribing the terms and conditions of the transaction. In the case of a transfer of all of the assets and business of the transferring bank, the terms of the agreement shall at least provide for full payment of the amounts due depositors and creditors of the transferring bank. Payment for all or part of the assets and business of the transferring bank may be made in cash or by making available on demand to depositors and other creditors thereof funds on deposit with the acquiring bank. Prior to the transfer of all or substantially all of the assets and business of a Connecticut bank pursuant to this section, such bank shall obtain authorization for the transfer by the affirmative vote of at least: (i) Two-thirds of the voting power of the outstanding shares of each class of stock, whether or not otherwise entitled to vote, in the case of a capital stock Connecticut bank; (ii) two-thirds of the voting power of the depositors, in the case of a mutual savings and loan association; and (iii) two-thirds of the governing board and two-thirds of the voting power of the corporators, in the case of mutual savings bank, which voting power shall, in any event, be no less than twenty-five corporators. In lieu of such vote, the commissioner may certify in writing that the protection of depositors or creditors of the transferring bank requires that the transfer proceed without delay. (2) The provisions of this subsection shall not apply to the liquidation of all of the retail deposits of a Connecticut bank pursuant to subsection (e) of section 36a-139b . (3) When a Connecticut bank has transferred or arranged to transfer all of its assets and business in accordance with this section, the governing board of such bank shall, after receiving the approval of the commissioner as provided in subdivision (1) of this subsection, send a written notice of such transfer or proposed transfer to each of its depositors and other known creditors and shall cause a copy of such notice to be published in a newspaper published in this state and having a circulation in the town in which the main office of such institution is located. Such notice shall inform the depositors and creditors of such bank of the transfer and of the terms thereof with reference to payment of depositors and creditors. Such notice may provide that creditors other than depositors who fail to present their claims to such bank within four months of the date of the notice shall be forever barred, and that creditors whose claims are presented within the time limited but which are disallowed by such bank shall commence an action to enforce their claims within three months of receipt of written notice disallowing their claims or be forever barred. Depositors shall not be required to present claims for deposits as shown by the records of such bank. At any time during the liquidation of the affairs of such bank, the governing board may have the privileges of a business corporation in voluntary dissolution as provided by law. After the claims of depositors and creditors have been fully paid either by transfer to the acquiring bank or in cash, or barred, the liability of the transferring bank for such claims shall cease. Any surplus remaining in the hands of the transferring Connecticut bank, after it has transferred all its assets and business, shall, after payment of the expenses of liquidation, be distributed to those entitled by law to receive such surplus in the manner provided in the agreement of transfer. Thereupon the governing board shall file a certificate with the commissioner stating that the affairs of such bank have been fully liquidated. Upon verifying the certificate as to the facts stated therein, the commissioner shall endorse the certificate “approved” and shall file a copy in the office of the Secretary of the State. Upon the finding by the Secretary of the State that the certificate complies with law, the secretary shall endorse the same “approved” and record the certificate. Thereupon the corporate existence of such bank shall cease. (b) No Connecticut bank may acquire all or a significant part of the assets or business of a federal bank, a federal credit union or an out-of-state bank without the approval of the commissioner. Such Connecticut bank shall file with the commissioner an application that includes a copy of any notice, application and other information filed with any federal or state banking regulator in connection with such acquisition and such additional information as may be required by the commissioner. The commissioner shall not approve such acquisition if: (1) It involves the acquisition of a federal bank or out-of-state bank that has not been in existence and continuously operating for at least five years, unless the commissioner waives this requirement; (2) the acquiring bank, including all insured depository institutions which are affiliates of such institution, upon consummation of the purchase, would control thirty per cent or more of the total amount of deposits of insured depository institutions in this state, unless the commissioner permits a greater percentage of such deposits; or (3) the programs, policies and procedures relating to anti-money-laundering activities of the purchasing institution are inadequate, or the purchasing institution does not have a record of compliance with anti-money-laundering laws and regulations. (c) No bank or out-of-state bank may acquire all or a significant part of the assets or business of a Connecticut bank or Connecticut credit union from the receiver of such bank or credit union without the approval of the commissioner.

Legislative History

(1949 Rev., S. 5755; 1963, P.A. 189; 1967, P.A. 461, S. 7; 1969, P.A. 124, S. 1, 2, 3; P.A. 78-121, S. 21, 113; P.A. 81-207, S. 4; P.A. 82-194, S. 9, 14; P.A. 83-377, S. 1–3; 83-411, S. 17, 20; P.A. 84-62, S. 1–3; P.A. 91-357, S. 5, 78; P.A. 92-12, S. 19; P.A. 93-59, S. 2, 8; P.A. 94-122, S. 89, 340; P.A. 95-155, S. 17, 29; P.A. 96-54, S. 7, 9; 96-109, S. 2; 96-180, S. 116, 166; P.A. 00-2, S. 2, 3; P.A. 03-196, S. 6; 03-259, S. 16; P.A. 04-136, S. 36.) History: 1963 act required authorization of sale and purchase by two-thirds vote of incorporators of selling institution rather than of “each party to the transaction” in cases involving savings banks under Subsec. (1)(a); 1967 act repealed Subsec. (2) which had allowed state bank and trust company to sell assets and business of savings department to one institution and all other assets and business to another institution; 1969 act added references to savings account holders and to savings and loan associations in Subsecs. (1), (3) and (5); P.A. 78-121 removed building associations from purview of section; P.A. 81-207 amended Subsec. (1) to permit the sale of the assets of a credit union to another banking institution, other than another credit union, and amended Subsec. (2) to provide that the share account holders of a credit union which has sold or arranged to sell its assets receive notice of the sale and the terms thereof, and that the procedures concerning payment of claims apply to share account holders; P.A. 82-194 changed the voting requirement to two-thirds of the stockholders or members “present and voting”, authorized the sale and purchase of “part” of the assets and business of a banking institution, added Subsec. (6) to clarify that a state institution may acquire a federal institution, added Subsec. (7) to authorize the commissioner to waive the voting requirement, and added Subsec. (8) to define “federal banking institution” and “state banking institution”; P.A. 83-377 amended Subsec. (1) to require the commissioner's opinion that a proposed sale of any state banking institution's assets to another institution is in the public interest or for the protection of depositors, savings account holder, share account holders or the bank's depositors and creditors only when 50% or more of the assets of the institution are being sold in one or a series of transactions and amended Subsec. (6) to require the commissioner's approval prior to the purchase of the assets and business of any federal banking institution by a state banking institution, other than a credit union; P.A. 83-411 amended Subsec. (1) to add the word “mutual” to the term “savings bank”; P.A. 84-62 amended Subsecs. (1) and (6) to authorize a state or federally chartered credit union located in this state to purchase all or part of the assets or business of any other state or federally chartered credit union located in this state; P.A. 91-357 changed “managing board” to “governing board” in Subsec. (2); P.A. 92-12 redesignated Subsecs. and Subdivs. and made technical changes; P.A. 93-59 amended section to apply to state chartered credit unions, amended Subsec. (a) re sale of assets of state banking institution or state chartered credit union, amended Subsec. (d) to include “share account holders” to the list of entities whose claims must be paid in full prior to the release of liability of the selling institution, amended Subsec. (f) to delete the authorization of the commissioner re waiver of voting requirement and substitute a requirement that no banking institution may buy all or a significant part of the assets and business of a federal banking institution or a federally chartered credit union and no state chartered credit union may buy all or a significant part of the assets and business of a federally chartered credit union without the commissioner's approval and made technical corrections for consistency, effective May 10, 1993; P.A. 94-122 added the requirement that two-thirds of a mutual savings bank's governing board must vote to approve the sale of its business in Subsec. (a)(3), added a new Subsec. (b) allowing waiver of the necessary vote by the commissioner, renumbered former Subsecs. (b) through (f) as Subsecs. (c) through (g), deleted former Subsecs. (g) and (h), added new Subsec. (h) clarifying that no bank may purchase or acquire the assets of a bank or credit union from its receiver without the commissioner's approval, and made technical changes, effective January 1, 1995; Sec. 36-30 transferred to Sec. 36a-210 in 1995; P.A. 95-155 amended Subsecs. (a) and (g) to add provisions re five-year requirement and re controlling deposits, effective June 27, 1995; P.A. 96-54 amended Subsec. (g) to substitute “or” for “and” immediately before Subdiv. (2), effective May 7, 1996; P.A. 96-109 and 96-180 both amended Subsec. (a) to replace numeric Subpara. designators with upper case alphabetic designators, effective June 3, 1996; P.A. 00-2 amended Subsec. (g) by requiring approval for purchase of assets and business of an out-of-state bank and adding provisions re application for approval, effective April 18, 2000; P.A. 03-196 designated existing Subsec. (a) as Subsec. (a)(1), merged existing Subsec. (b) into Subsec. (a)(1), added Subsec. (a)(2) providing that Subsec. (a) does not apply to liquidation of retail deposits of a Connecticut bank pursuant to Sec. 36a-139b(e), designated existing Subsec. (c) as Subsec. (a)(3) and merged existing Subsecs. (d), (e) and (f) into Subsec. (a)(3), redesignated existing Subsecs. (g) and (h) as new Subsecs. (b) and (c), deleted provisions applying to credit unions and share accounts, changed “sell” and “sale” to “transfer”, “purchasing institution” to “acquiring bank” and “selling institution” to “transferring bank” and made conforming changes throughout, effective July 1, 2003; P.A. 03-259 amended Subsec. (a) by inserting Subpara. (A) designator, adding Subpara. (B) re anti-money-laundering activities and compliance and making technical changes and amended Subsec. (g), redesignated as Subsec. (b), by adding Subdiv. (3) re anti-money-laundering activities and compliance; P.A. 04-136 amended Subsec. (a)(1) to make a technical change and to substitute “acquiring” for “purchasing”, effective May 12, 2004.