GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2017
SESSION LAW 2017-165
HOUSE BILL 462
AN ACT to make technical, clarifying, AND OTHER AMENDMENTS to provisions applicable to commercial banks, provisions applicable to bank holding companies, and PROVISIONS APPLICABLE TO CREDIT UNIONS.
The General Assembly of North Carolina enacts:
PART I. COMMERCIAL BANKS
SECTION 1. G.S. 53C‑1‑4(25) reads as rewritten:
"(25) Deposit. – A
"deposit" as defined in Section 3(1) Section 3(l) of
the Federal Deposit Insurance Act, 12 U.S.C. § 1813(1).12 U.S.C. §
1813(l)."
SECTION 2. G.S. 53C‑1‑4(46) reads as rewritten:
"(46) Non‑branch bank
business office. – Any staffed physical location open to the public in this
State in which an office of a bank, out‑of‑state bank, depository
institution established under the laws of another state, or federally chartered
institution that is not a branch, an office of a separately organized
subsidiary of such depository institution, or an office of the holding company
of such depository institution, public, at which any of the
following institutions offers one or more banking or banking‑related
products or services are offered, other than the taking of deposits. services,
but does not take deposits:
a. Bank.
b. Out‑of‑state bank.
c. Depository institution established under the laws of another state.
d. Federally chartered institution.
e. Separately organized subsidiary of a bank, out‑of‑state bank, depository institution established under the laws of another state, or federally chartered institution.
f. Holding company of a bank, out‑of‑state bank, depository institution established under the laws of another state, or federally chartered institution.
The
provision of remote deposit capture facilities or services by a non‑branch
bank business office shall not be deemed to be does not constitute a
taking of deposits. Non‑branch bank business offices include loan
production offices, mortgage loan offices, and insurance agency offices, or a
combination thereof."
SECTION 3. G.S. 53C‑2‑7(b) reads as rewritten:
"(b) Notwithstanding any
laws to the contrary, the following records of the Commissioner shall be in
the custody of the OCOB are confidential and shall not be disclosed or be
subject to discovery or public inspection:
(1) Records compiled during or in connection with an examination, audit, or investigation of any person, including records relating to any application for licensure or otherwise to the conduct of business. The OCOB may treat as confidential any response to an application.
(2) Records containing
information compiled in preparation for or anticipation of or in the course of
litigation, examination, audit, or investigation.investigation or
containing information that was privileged prior to being obtained by the
Commissioner.
(3) Records containing nonpublic
personal information about a customer, person, whether in
paper, electronic, or other form, that is maintained by or on behalf of the
financial institution; provided, however, that every report made by a North
Carolina financial institution, with respect to a transaction between it and an
officer, director, or affiliate thereof, which report is required to be filed
with the Commissioner pursuant to this Chapter, shall be filed with the
Commissioner in a form prescribed by the Commissioner and shall be open to
inspection and copying by any person.
(4) Records containing
information furnished in connection with an application bearing on the
character, competency, or experience, or information about the personal
finances of an existing or proposed organizer, officer, or director director,
or employee of a depository institution, federally chartered institution,
trust institution, holding company, or any other person subject to the
Commissioner's jurisdiction.
…
(7) Records of North Carolina
financial institutions in dissolution that have liquidated, that are under the
Commissioner's supervisory control, or that are in receivership and that
contain the names or other personal information of any customers of the
institutions.person.
(8) Records Minutes
or other records that have been obtained by the Commissioner and that are
related to meetings of, or have been prepared by a compliance review
committee or other committee of the board of directors of a North Carolina
financial institution or established at the direction of such a board of
directors that have been obtained by the Commissioner.by, any of the
following bodies of a North Carolina financial institution:
a. The board of directors.
b. A compliance review committee of the board of directors.
c. Any other committee of the board of directors.
d. A committee established at the direction of the board of directors.
e. A committee established at the direction of a committee of the board of directors.
…
(12a) Records that are confidential under Chapter 132 of the General Statutes or protected from disclosure under other applicable law.
(13) Any record that would disclose any information set forth in any of the confidential records referred to in this subsection."
SECTION 4. G.S. 53C‑4‑12 reads as rewritten:
"§ 53C‑4‑12. Compliance review committee.
(a) For purposes of this section, the following definitions apply:
(1) "Compliance review
committee" means an audit, loan review, or compliance committee
appointed by the board of directors of a bank, or (i) a bank's board of
directors, (ii) a committee authorized by the bank's board of directors, or
(iii) any other committee or person to the extent the committee
or person acts at the direction of or reports to such a committee, whose
the bank's board of directors or a committee authorized by the bank's
board of directors when any part of the functions are of the
board, committee, or person is to audit, evaluate, report, or determine
compliance with any of the following:following standards or requirements:
…
e. Compliance with federal or State statutory or regulatory requirements.
f. Cybersecurity requirements.
…
(b) Banks shall maintain
complete records of compliance review documents, and the documents shall be
available for examination by the Commissioner or any bank supervisory agency or
government agency having jurisdiction. Notwithstanding Chapter 132 of the
General Statutes, Statutes or any other provision of the General
Statutes, compliance review documents in the custody of a bank, the Commissioner,
a government agency, or a bank supervisory agency are confidential, are not
open for public inspection, and are not discoverable or admissible in evidence
in a civil action against a bank, its directors, officers, or employees, unless
the court finds that the interests of justice require that the documents be
discoverable or admissible in evidence."
SECTION 5. G.S. 53C‑5‑1(b) reads as rewritten:
"(b) A bank shall also
have the power to engage:engage in any of the following activities:
…
(4) In any activity other
than as principal permitted under the Federal Deposit Insurance Act, 12
U.S.C. § 1831a.principal."
SECTION 6. G.S. 53C‑6‑7 reads as rewritten:
"§ 53C‑6‑7. Payable on Death accounts.
(a) If any natural person
individual establishing a deposit account shall execute executes
a written agreement with the bank containing a statement that it is
executed pursuant to the provisions of this section and providing for the
account to be held in the name of the natural person individual as
owner for one or more beneficiaries, the account and any balance thereof shall
be held as a Payable on Death account. The account shall have the following
incidents:
…
(3) Any owner may withdraw
funds by writing checks or otherwise, as set forth in the account contract, and
receive payment in cash or check payable to the owner's personal order.Unless
the individual establishing the Payable on Death account has agreed with the
bank that a withdrawal requires more than one signature, payment by the bank
to, on the order of, or at the direction of any owner is a total discharge of
the bank's obligation as to the paid amount.
(4) If the any beneficiary
is a natural person, an individual, there may be one or more
beneficiaries, each of whom shall be an individual, and the following requirements
shall apply:
…
(5) If the any beneficiary
is an entity other than a natural person, not an individual, there
shall be only one beneficiary.
…
(8) A pledge of a Payable on Death account by any owner, unless otherwise specifically agreed between the bank and all owners in writing, is a valid pledge and transfer of the account or of the pledged amount, is binding upon all owners and beneficiaries, does not operate to sever or terminate the joint ownership of all or any part of the account, and survives the death of any owner or any beneficiary.
The natural person individual
establishing an account under this subsection shall sign a statement
containing language set forth in a conspicuous manner and substantially similar
to the language set out below.following language. The following
language may be on a signature card or in an explanation of the account
that is set out in a separate document whose receipt is acknowledged by the person
individual establishing the account:
"BANK (or name of institution)
PAYABLE ON DEATH ACCOUNT
G.S. 53C‑6‑7
I (or we) understand that by establishing a Payable on Death account under the provisions of North Carolina General Statute 53C‑6‑7 that:
1. During my (or our) lifetime I (or we), individually or jointly, may withdraw the money in the account.
2. By written direction to the bank (or name of institution) I (or we), individually or jointly, may change the beneficiary or beneficiaries.
3. Upon my (or our) death, the money remaining in the account will belong to the beneficiary or beneficiaries, and the money will not be inherited by my (or our) heirs or be controlled by will.
_________________________________ "
…."
SECTION 7. G.S. 53C‑6‑8(d) reads as rewritten:
"(d) The written contract
referred to in subsection (a) of this section shall provide that the principal
may elect to extend the authority of the agent set out in subsection (a) of
this section to act on behalf of the principal in regard to the account,
notwithstanding the subsequent incapacity or mental incompetence of the
principal. If the principal is a natural person an individual and
elects to extend the authority of the agent, then upon the subsequent
incapacity or mental incompetence of the principal, the agent may continue to
exercise the authority, without the requirement of bond or of accounting to any
court, until such time as the agent shall receive receives actual
knowledge that the authority has been terminated. The duly qualified guardian
of the estate of the incapacitated or incompetent principal, or the duly
appointed attorney‑in‑fact for the incapacitated or incompetent
principal acting pursuant to a durable power of attorney, as defined in
G.S. 32A‑8, which grants to the attorney‑in‑fact the
authority in regard to the account that is granted to the agent by the written
contract executed pursuant to the provisions of this section, shall have the
power, upon notifying the agent and providing written notice to the bank where
the personal agency account is established, to terminate the agent's authority
to act on behalf of the principal with respect to the account. Upon termination
of the agent's authority, the agent shall account to the guardian or attorney‑in‑fact
for all actions of the agent in regard to the account during the incapacity or
incompetence of the principal. If the principal is a natural person an
individual and does not elect to extend the authority of the agent, then
upon the subsequent incapacity or mental incompetence of the principal, the
authority of the agent set out in subsection (a) of this section
terminates."
SECTION 8. G.S. 53C‑6‑18(a) reads as rewritten:
"(a) A bank may establish
in this State or another state one or more non‑branch bank
business offices as defined by G.S. 53C‑1‑4(46):G.S. 53C‑1‑4(46),
subject to the following requirements:
(1) If a proposed non‑branch
bank business office will offer a product, service, or other type of
business not previously engaged in by the bank, the bank shall provide the
Commissioner with be used in connection with a new activity for which an
application is required under G.S. 53C‑5‑1(d) or an investment
for which a notice is required under G.S. 53C‑5‑2(e), that
application or notice shall include written notification of the intent to
open the office. The notification shall include the proposed location of the
office and a description of the business to be conducted at the office. If the
Commissioner does not request additional information or object to its
establishment within 10 days of the date of receipt of the notification, the
non‑branch bank business office shall be deemed approved. In deciding
whether to object to the establishment of a non‑branch bank business
office, the Commissioner shall consider, without limitation, whether the
business proposed to be conducted at the non‑branch bank business office
is permissible for a bank, the costs of its establishment and ongoing operation
and the impact of the costs on the bank's capital and profitability, and the
ability of the bank's management to conduct the proposed business.
(2) If a proposed non‑branch
bank business office will offer only products, services, or other types of
business already engaged in by the bank, written notification is not
required under subdivision (a)(1) of this section, the bank shall provide
the Commissioner with written notification of the intent to open the office.location
of the office and a description of the business to be conducted at the office."
SECTION 9. G.S. 53C‑7‑207 reads as rewritten:
"§ 53C‑7‑207. Combination with a nonbank subsidiary.
(a) Except as provided in
subsection (c) of this section, a bank proposing to do any of the following
combinations shall give prior written notice to the Commissioner that provides such
detail the details of the proposed combination that the
Commissioner may require:are required by the Commissioner:
(1) Combine with a nonbank subsidiary, if the bank is the resulting entity of the combination.
(2) Combine a nonbank subsidiary
with another company, company that is not a depository institution, if
a the nonbank subsidiary is the resulting entity.
(3) Combine two or more nonbank subsidiaries of two or more banks under common control of the same holding company.
Unless the Commissioner, within 30 days of receiving the notice, notifies the bank or subsidiary that the Commissioner objects to the proposed combination, the bank or subsidiary may complete the combination. However, the Commissioner may extend the period to object to the proposed combination if the Commissioner determines that it raises issues that require additional information or additional time for analysis. While the objection period is so extended, the bank or subsidiary may not proceed with respect to the proposed combination.
(b) A bank may, pursuant to G.S. 53C‑2‑6, appeal an objection by the Commissioner.
(c) The prior written notice
requirement of subsection (a) of this section is not required for (i) for
a combination of a nonbank subsidiary and another company when that
is not a depository institution, provided the nonbank subsidiary is
not the resulting entity, (ii) for a combination of two or more nonbank
subsidiaries of the same bank, each of which shall be effected in
accordance with applicable organizational law, or (iii) if all of the following
apply:
(1) The bank is well‑capitalized and well‑managed as demonstrated by the supervisory rating it received during its most recent examination.
(2) The nonbank subsidiary with which the combination is to be made engages in either of the following activities:
…."
PART II. BANK HOLDING COMPANIES
SECTION 10. G.S. 53C‑10‑101 reads as rewritten:
"§ 53C‑10‑101. Holdings Holding companies.
Every holding company, as defined
in G.S. 53C‑1‑4(39), of a bankthat directly or
indirectly controls a depository institution or nonbank subsidiary that has an
office located in this State shall register with the Commissioner and
maintain that registration on an annual basis in the form prescribed by the
Commissioner."
SECTION 11. G.S. 53‑232 is recodified as G.S. 53C‑10‑303 and reads as rewritten:
Each bank A holding company
subject to this act Article shall pay the following fees:
(1) An initial registration
fee of $1,000.one thousand dollars ($1,000).
(2) An annual registration
fee of $750.00.seven hundred fifty dollars ($750.00).
(3) A fee of $50.00 fifty
dollars ($50.00) for the issuance of any certified copies of documents plus
$1.00 one dollar ($1.00) per page over a number of pages
specified by the Commissioner."
SECTION 12. Article 18 of Chapter 53 of the General Statutes is repealed.
PART III. CREDIT UNIONS
SECTION 14. G.S. 54‑109.57A(a) reads as rewritten:
"§ 54‑109.57A. Payable on Death (POD) accounts.
(a) Shares may be issued to and deposits received from any natural person or natural persons establishing an account who shall execute a written agreement with the credit union containing a statement that it is executed pursuant to the provisions of this section and providing for the account to be held in the name of the natural person or natural persons as owner or owners for one or more beneficiaries. Such account and any balance thereof shall be held as a Payable on Death account. The account shall have the following incidents:
…
(8) A pledge of a Payable on Death account by any owner, unless otherwise specifically agreed between the credit union and all owners in writing, is a valid pledge and transfer of the account or of the pledged amount, is binding upon all owners and beneficiaries, does not operate to sever or terminate the joint ownership of all or any part of the account, and survives the death of any owner or any beneficiary.
The natural person or natural persons establishing an account under this subsection shall sign a statement containing language set forth in a conspicuous manner and substantially similar to the language set out below; the language may be on a signature card or in an explanation of the account that is set out in a separate document whose receipt is acknowledged by the person or persons establishing the account:
"CREDIT UNION (or name of institution)
PAYABLE ON DEATH ACCOUNT
G.S. 54‑109.57A
I (or we) understand that by establishing a Payable on Death account under the provisions of North Carolina General Statute 54‑109.57A that:
1. During my (or our) lifetime I (or we), individually or jointly, may withdraw the money in the account.
2. By written direction to the credit union (or name of institution) I (or we), individually or jointly, may change the beneficiary or beneficiaries.
3. Upon my (or our) death the money remaining in the account will belong to the beneficiary or beneficiaries, and the money will not be inherited by my (or our) heirs or be controlled by will.
____________________________
__________________________""
PART IV. EFFECTIVE DATE
SECTION 15. This act is effective when it becomes law.
In the General Assembly read three times and ratified this the 28th day of June, 2017.
s/ Daniel J. Forest
President of the Senate
s/ Tim Moore
Speaker of the House of Representatives
s/ Roy Cooper
Governor
Approved 11:42 a.m. this 21st day of July, 2017