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HOUSE BILL NO. 257
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FIRST LEGISLATURE - SECOND SESSION
BY REPRESENTATIVE LEBON BY REQUEST
Introduced: 2/19/20
Referred: Labor & Commerce
A BILL
FOR AN ACT ENTITLED
1 "An Act relating to the Alaska Banking Code; relating to mutual savings banks; relating
2 to interstate state banks and international banks; relating to the pledging of bank assets
3 as collateral security to tribal organizations; relating to the pledging of bank assets for
4 interest swap agreements; relating to state business licenses; relating to persons who
5 make loans secured by interests in vessels or facilities; relating to liability for the release
6 or threatened release of hazardous substances; relating to the Model Foreign Bank Loan
7 Act; and providing for an effective date."
8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
9 * Section 1. AS 06.05.005(a) is amended to read:
10 (a) The department shall
11 (1) exercise general supervision over all state financial institutions and
12 their subsidiaries and affiliated corporations;
13 (2) adopt regulations necessary to implement this chapter, including
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1 regulations providing for the retention and preservation of state bank records;
2 (3) review and approve or disapprove applications for new state banks
3 under AS 06.05.344, new bank branches under the regulations adopted under
4 AS 06.05.399, and international bank branches or interstate state bank branches under
5 AS 06.05.555;
6 (4) issue permits authorizing certain acquisitions by bank holding
7 companies under AS 06.05.235 and 06.05.570;
8 (5) determine for each state bank the amount of paid-in capital
9 necessary to operate under AS 06.05.305(a);
10 (6) review and approve transfers of state bank ownership under
11 AS 06.05.327;
12 (7) perform examinations of state banks, branch banks, and
13 subsidiaries under AS 06.01.015.
14 * Sec. 2. AS 06.05.005 is amended by adding a new subsection to read:
15 (c) Notwithstanding the other provisions of this chapter, the department may
16 not adopt a regulation that
17 (1) places a restriction, including a requirement relating to
18 collateralization, approval, reporting, or a monetary limit, on a credit card that a state
19 bank issues to an officer of the state bank; or
20 (2) sets a time limit on the disposal of real or personal property of a
21 banking business.
22 * Sec. 3. AS 06.05.050 is amended to read:
23 Sec. 06.05.050. Publication of reports. (a) Condensed forms of all reports of
24 condition required by AS 06.05.045(a) shall be immediately
25 (1) published by the state bank in a newspaper of general circulation
26 published in the place where the state bank is located; if a newspaper of general
27 circulation is not published in that place, the report shall be published in the
28 newspaper of general circulation published nearest to that place; or
29 (2) posted
30 (A) at the primary Internet website of the state bank; or [AND]
31 (B) in the lobby of the principal office and all branches of the
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1 state bank.
2 (b) Notice of the publication or posting of the reports of condition under (a) of
3 this section shall be posted either in the lobby of the principal office and all branches
4 of the state bank or on the primary Internet website of the state bank. Upon
5 request, a copy of a report of condition shall be supplied to any person at no cost.
6 * Sec. 4. AS 06.05.166(c) is amended to read:
7 (c) In an emergency, a bank may elect not to open any of its banking offices
8 on a business or banking day or, having opened, to close any banking office. The bank
9 shall notify the department of the nonopening or the closing before taking the action, if
10 possible, and [AS SOON AS POSSIBLE], in any event, not later than 15 days after
11 the nonopening or closing. Any act relating to the banking office that has been closed
12 for any period of time under this subsection may be performed on the next business
13 day that the office is open for business. No liability or loss of rights of any kind on the
14 part of any person, firm, or corporation or of the bank results from the nonopening or
15 closing, and the rights of all parties are suspended during the nonopening or closing.
16 * Sec. 5. AS 06.05.210(a) is amended to read:
17 (a) Subject to the same terms and conditions applicable to other loans, a
18 director or executive officer of a state bank may borrow up to $500,000 [$100,000,
19 OR UP TO $250,000 FOR THE DIRECTOR'S OR EXECUTIVE OFFICER'S
20 PRIMARY RESIDENCE,] from the state bank at the discretion of the chief executive
21 or managing officer of the state bank. A loan to a director or executive officer that
22 makes the total amount owed to the state bank by the director or executive officer in
23 excess of the limit [LIMITS] in this subsection, or loans of any amount to the chief
24 executive or managing officer of the state bank, shall have the prior approval of the
25 board of directors and [,] shall be reported to the department within 30 days [, AND
26 SHALL BE SECURED BY ADEQUATE COLLATERAL].
27 * Sec. 6. AS 06.05.245 is amended to read:
28 Sec. 06.05.245. Disposition of property [NOT NEEDED IN THE
29 CONDUCT OF A BANKING BUSINESS]. All investments in real and personal
30 property, regardless of how acquired, not permitted under AS 06.05.230 that come
31 into the possession of a state bank shall be disposed of as soon as possible. [IF THE
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1 REAL OR PERSONAL PROPERTY IS NOT SOLD WITHIN THE TIME LIMIT
2 SET BY THE DEPARTMENT IN REGULATIONS, IT SHALL BE WRITTEN OFF
3 AND MAY NOT BE CARRIED AS AN ASSET OF THE STATE BANK.]
4 * Sec. 7. AS 06.05.260(a) is amended to read:
5 (a) A bank may not give preference to a depositor or creditor by pledging any
6 of the assets of a bank as collateral security except
7 (1) to the state to secure state funds, or to a municipal corporation or
8 other public corporation, municipal utility or municipal utility board, or political
9 subdivision of the state to secure its funds, and to the United States as may be required
10 to make the bank a depository for United States funds;
11 (2) to secure a mortgage or deed of trust in connection with the
12 purchase of banking premises as provided in AS 06.05.230, if the only property
13 pledged is property purchased in the transaction; [OR]
14 (3) to a federal reserve bank or federal home loan bank in the manner
15 required by the applicable laws, regulations, and rules of the federal reserve bank or
16 federal home loan bank, as applicable;
17 (4) to a federally recognized tribe or a wholly owned subdivision or
18 wholly owned subsidiary of a federally recognized tribe;
19 (5) to a business enterprise that is wholly owned by a federally
20 recognized tribe;
21 (6) to an inter-tribal consortium as defined in 25 U.S.C. 3202; or
22 (7) to a tribal organization as defined in 25 U.S.C. 5304.
23 * Sec. 8. AS 06.05.260 is amended by adding new subsections to read:
24 (d) A bank may pledge the assets of the bank
25 (1) to a party to an interest rate swap agreement as collateral to secure
26 the party's financial risk arising out of the agreement; the bank may make the pledge
27 on the same terms and conditions applicable to a bank chartered by the United States
28 in a pledge of assets in an interest rate swap agreement;
29 (2) to allow the bank to enter into an interest rate swap agreement to
30 manage the bank's risk of fluctuating interest rates, but not for a purpose that involves
31 a high risk of loss.
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1 (e) In this section,
2 (1) "federally recognized tribe" means a tribe that the United States
3 Secretary of the Interior recognizes as an Indian tribe under 25 U.S.C. 5131 (Federally
4 Recognized Indian Tribe List Act of 1994);
5 (2) "interest rate swap agreement" means an agreement in which one
6 stream of future interest payments is exchanged for another stream of future interest
7 payments.
8 * Sec. 9. AS 06.05.355(a) is amended to read:
9 (a) The department shall [MAY] require a state bank, [EITHER] at the time
10 the bank applies for a certificate of authority under AS 06.05.350 [OR DURING THE
11 BANK'S EXISTENCE], to become a member of the Federal Deposit Insurance
12 Corporation.
13 * Sec. 10. AS 06.05.399 is repealed and reenacted to read:
14 Sec. 06.05.399. Changes of location; branch banks. A state bank may apply
15 for and establish a branch bank, request a change of the location of the bank's principal
16 office, or request a change of the location of a branch bank as allowed under
17 regulations adopted by the department under this chapter.
18 * Sec. 11. AS 06.05.438(a) is amended to read:
19 (a) The board of directors of each bank shall hold a meeting at least once each
20 calendar quarter of [MONTH FOR AT LEAST 10 MONTHS IN] each calendar
21 year.
22 * Sec. 12. AS 06.05.555(a) is amended to read:
23 (a) Before acquiring a branch bank under AS 06.05.550(a) or establishing a
24 branch bank under AS 06.05.550(b), an interstate state bank or international bank shall
25 file an application with the department for and receive a certificate of authority to
26 operate a branch bank. The application must include
27 (1) all information and fees required under the regulations adopted
28 under AS 06.05.399;
29 (2) the name of the bank and the address of its principal office;
30 (3) if an international bank, the country under whose laws it is
31 organized;
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1 (4) the amount of the bank's capital actually paid in cash and the
2 amount subscribed for and unpaid;
3 (5) a complete and detailed statement of the bank's financial condition;
4 (6) the names of all other states and countries in which the bank is
5 admitted or qualified to do business;
6 (7) a copy of the bank's charter, articles of incorporation, and bylaws,
7 as applicable;
8 (8) if an international bank, evidence satisfactory to the department
9 that the bank is authorized to conduct a banking business under the laws of the country
10 of its organization, and the nature of the bank's business;
11 (9) a properly executed designation of the department as the bank's
12 agent for service of process in an action or proceeding arising out of a transaction
13 involving the branch bank; the designation must include the name and address of the
14 officer, agent, or other person to whom the department is to forward the process; and
15 (10) other information necessary or appropriate for the department to
16 determine whether the bank is entitled to a certificate of authority from the
17 department.
18 * Sec. 13. AS 06.05.990(4) is amended to read:
19 (4) "branch bank" includes an office, agency, or other place of
20 business located in the state and at which deposits are received, checks are paid, or
21 money is lent, but does not include [EITHER] the principal office of a bank or a
22 remote service unit; in this paragraph, "remote service unit" means an automated
23 teller machine, automated loan machine, automated device for receiving deposits,
24 personal computer, telephone, or similar automated or electronic device that
25 allows a customer of a bank to contact the bank to make deposits, make
26 withdrawals, and perform other banking functions and that may be equipped
27 with a telephonic device, a video device, or both;
28 * Sec. 14. AS 06.15.180 is repealed and reenacted to read:
29 Sec. 06.15.180. Borrowing. The aggregate amount of outstanding liabilities of
30 a mutual bank for money borrowed may not at any time exceed 15 percent of the total
31 assets of the mutual bank unless the department approves a larger percentage of the
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1 total assets of the mutual bank.
2 * Sec. 15. AS 06.15.190 is amended to read:
3 Sec. 06.15.190. Deposits. A mutual bank may accept [SAVINGS] deposits to
4 be held solely and absolutely in its own right by or in trust or other fiduciary capacity
5 for any person, including an adult or minor individual, male or female, single or
6 married, a partnership, nonprofit organization, association, fiduciary, corporation, or
7 political subdivision or public or governmental unit. The bank may issue a passbook
8 or other evidence of its obligation to repay the [SAVINGS] deposits.
9 * Sec. 16. AS 06.15.220 is amended to read:
10 Sec. 06.15.220. Interest on deposits. A mutual bank may pay interest on
11 deposits from net earnings and undivided profits at the rates and intervals that its
12 trustees or the persons to whom the trustees have delegated the trustees' authority
13 approve.
14 * Sec. 17. AS 06.15.240 is repealed and reenacted to read:
15 Sec. 06.15.240. Investments authorized. (a) In addition to loans and
16 acquisitions expressly authorized by this chapter, a mutual bank may deal in,
17 underwrite, and invest in for its own account the obligations that the department by
18 regulation authorizes the bank to deal in, underwrite, or invest in for its own account.
19 (b) If a mutual bank does not assume responsibility for the risk of
20 nonperformance or nonpayment of a security, the bank may purchase or sell the
21 security upon the order of a customer and for the customer's account.
22 * Sec. 18. AS 06.15.250 is repealed and reenacted to read:
23 Sec. 06.15.250. Investment in first mortgages. Subject to the provisions of
24 this chapter and the regulations adopted under this chapter, a mutual bank may invest
25 in first mortgages in the same manner and with the same limitations as a bank
26 organized under AS 06.05.
27 * Sec. 19. AS 06.15.290 is repealed and reenacted to read:
28 Sec. 06.15.290. Changes of location; branch banks. A mutual bank may
29 apply for and establish a branch bank, request a change of the location of the bank's
30 principal office, or request a change of the location of a branch bank as allowed under
31 regulations adopted by the department under this chapter.
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1 * Sec. 20. AS 43.70.105(a) is amended to read:<