§ 28-1-2-23 — Change in control; department approval required; application; time frame for department's decision; conditions for approval; exempt transactions; duty to report transfer of securities; investigation by director; prior notice exemption for certain transactions

Indiana § 28-1-2-23

• Jurisdiction: Indiana
• Art. 1: DEPARTMENT OF FINANCIAL INSTITUTIONS
• Ch. 2: Powers and Duties of the Department

Text

(a) A corporation or an individual acting
directly, indirectly, or through or in concert with one (1) or more other
corporations or individuals may not acquire control of any bank, trust
company, stock savings bank, holding company, corporate fiduciary,
or industrial loan and investment company unless the department has
received and approved an application for change in control. The
department has not more than one hundred twenty (120) days following
receipt of an application to issue a notice approving the proposed
change in control. The application shall contain the name and address
of the corporation, individual, or individuals who propose to acquire
control.
(b) The period for approval under subsection (a) may be extended:
(1) in the discretion of the director for an additional thirty (30)
days; and
(2) not to exceed two (2) additional times for not more than
forty-five (45) days each time if:
(A) the director determines that the corporation, individual, or
individuals who propose to acquire control have not submitted
substantial evidence of the qualifications described in
subsection (c);
(B) the director determines that any material information
submitted is substantially inaccurate; or
(C) the director has been unable to complete the investigation
of the corporation, individual, or individuals who propose to
acquire control because of any delay caused by or the
inadequate cooperation of the corporation, individual, or
individuals.
(c) The department shall issue a notice approving the application
only after it has become satisfied that both of the following apply:
(1) The corporation, individual, or individuals who propose to
acquire control are qualified by competence, experience,
character, and financial responsibility to control and operate the
bank, trust company, stock savings bank, bank holding company,
corporate fiduciary, or industrial loan and investment company in
a legal and proper manner.
(2) The interests of the stockholders, depositors, and creditors of
the bank, trust company, stock savings bank, bank holding
company, corporate fiduciary, or industrial loan and investment
company and the interests of the public generally will not be
jeopardized by the proposed change in control.
(d) As used in this section, "holding company" means any company
(as defined in IC 28-2-15-5 before July 1, 1992, and as defined in IC 28-2-16-5 beginning July 1, 1992) that directly or indirectly controls
one (1) or more state chartered financial institutions.
(e) As used in this section, "control", "controlling", "controlled by",
or "under common control with" means possession of the power
directly or indirectly to:
(1) direct or cause the direction of the management or policies of
a bank, a trust company, a holding company, a corporate
fiduciary, or an industrial loan and investment company, whether
through the beneficial ownership of voting securities, by contract,
or otherwise; or
(2) vote at least twenty-five percent (25%) of voting securities of
a bank, a trust company, a holding company, a corporate
fiduciary, or an industrial loan and investment company, whether
the voting rights are derived through the beneficial ownership of
voting securities, by contract, or otherwise.
(f) The director may determine, in the director's discretion, that
subsection (a) does not apply to a transaction if the director determines
that the direct or beneficial ownership of the bank, trust company, stock
savings bank, holding company, corporate fiduciary, or industrial loan
and investment company will not change as a result of the transaction.
(g) The president or other chief executive officer of a financial
institution or holding company shall report to the director any transfer
or sale of shares of stock of the financial institution or holding
company that results in direct or indirect ownership by a stockholder
or an affiliated group of stockholders of at least ten percent (10%) of
the outstanding stock of the financial institution or holding company.
The report required by this subsection must be made not later than ten
(10) days after the president or other chief executive officer becomes
aware of the transfer of the shares of stock on the books of the financial
institution or holding company.
(h) To assist the department in making a determination under
subsection (c), the director may conduct any investigation the director
determines is warranted, including any background check described in
IC 28-11-5-4.5.
(i) This subsection applies to a transaction described in 12 CFR
303.83(b)(1), including the following:
(1) The acquisition of voting shares through inheritance.
(2) The acquisition of voting shares through a bona fide gift.
(3) The acquisition of voting shares in satisfaction of a debt
previously contracted in good faith, other than the acquisition of
a defaulted loan secured by a controlling amount of the voting
securities of a bank, trust company, stock savings bank, bank
holding company, corporate fiduciary, or industrial loan and
investment company.
In a transaction to which this subsection applies, the acquiring person
shall use the person's best effort to comply with the requirements of this
section. However, it is not a violation of this section if the acquiring
person is not able to satisfy the requirements of this section and notifies
the department of the acquisition not later than thirty (30) calendar
days after the acquisition and provides any relevant information
requested by the department. This subsection does not limit the
authority of the department to conduct any investigation necessary to
approve or disapprove the transaction under subsection (c).
Formerly: Acts 1933, c.40, s.25a; Acts 1965, c.356, s.20; Acts
1971, P.L.394, SEC.19. As amended by P.L.164-1988, SEC.1;
P.L.3-1990, SEC.99; P.L.33-1991, SEC.4; P.L.42-1993, SEC.21;
P.L.122-1994, SEC.40; P.L.262-1995, SEC.2; P.L.134-2001, SEC.6;
P.L.258-2003, SEC.4; P.L.213-2007, SEC.35; P.L.217-2007, SEC.33;
P.L.35-2010, SEC.97; P.L.89-2011, SEC.32; P.L.6-2012, SEC.191;
P.L.27-2012, SEC.36.