act-1994-0-51•Pennsylvania Act 1994-51 — BANKING CODE OF 1965 - AMEND
Pennsylvania Act 1994-51 — BANKING CODE OF 1965 - AMEND
act-1994-0-511994 Pa. Act 51Law
Act text
BANKING CODE OF 1965 - AMEND
Act of Jun. 16, 1994, P.L. 346, No. 51 Cl. 07
Session of 1994
No. 1994-51
HB 2650
AN ACT
Amending the act of November 30, 1965 (P.L.847, No.356),
entitled "An act relating to and regulating the business of
banking and the exercise by corporations of fiduciary powers;
affecting persons engaged in the business of banking and
corporations exercising fiduciary powers and affiliates of
such persons; affecting the shareholders of such persons and
the directors, trustees, officers, attorneys and employes of
such persons and of the affiliates of such persons; affecting
national banks located in the Commonwealth; affecting persons
dealing with persons engaged in the business of banking,
corporations exercising fiduciary powers and national banks;
conferring powers and imposing duties on the Banking Board,
on certain departments and officers of the Commonwealth and
on courts, prothonotaries, clerks and recorders of deeds;
providing penalties; and repealing certain acts and parts of
acts," providing for indemnity and immunity of certain
directors; and further providing for mergers, consolidations
and conversions of savings banks.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 102 of the act of November 30, 1965
(P.L.847, No.356), known as the Banking Code of 1965, is amended
by adding a subsection to read:
Section 102. Definitions
Subject to additional definitions contained in subsequent
chapters of this act which are applicable to specific chapters
or sections thereof, the following words and phrases when used
in this act shall have, unless the context clearly indicates
otherwise, the meanings given to them in this section:
* * *
(z.1) "Special institution"--any of the following:
(i) A State-chartered bank which meets all of the
following criteria:
(A) Has previously assumed or may assume deposit
liabilities of an entity which was subject to the
supervision of the department under the act of May 15,
1933 (P.L.565, No.111), known as the "Department of
Banking Code," the act of December 14, 1967 (P.L.746,
No.345), known as the "Savings Association Code of 1967,"
or this act and whose deposits were not insured by the
Federal Deposit Insurance Corporation or any other
Federal agency authorized by law to insure deposits.
(B) Is wholly owned directly or indirectly by an
agency or instrumentality of the Commonwealth, including
specifically, the State Workmen's Insurance Fund.
(C) Has deposits that are insured by the Federal
Deposit Insurance Corporation or any other Federal agency
authorized by law to insure deposits.
(ii) The nonprofit corporation created by the act of
April 6, 1979 (P.L.17, No.5), referred to as the Pennsylvania
Savings Association Insurance Corporation Act.
* * *
Section 2. The act is amended by adding a section to read:
Section 1417. Indemnity and Immunity of Certain Directors
(a) Indemnity--
(i) The department shall have the power and its duty
shall be to procure, on behalf of the members of the board of
directors of special institutions as defined in section
102(z.1)(i), directors' liability insurance or such other
contract of insurance providing for the indemnification of
these directors against any liability asserted against them
or incurred by them solely in their capacity or arising out
of their status as directors, including actions undertaken in
connection with the organization of the special institution.
(ii) The department shall have the power and its duty
shall be to procure, on behalf of the members appointed by
the Governor of the board of directors of special
institutions as defined in section 102(z.1)(ii), directors'
liability insurance or such other contract of insurance
providing for the indemnification of these directors against
any liability asserted against them or incurred by them
solely in their capacity or arising out of their status as
directors, including actions undertaken in connection with
the organization of the special institution.
(iii) The department is authorized to provide otherwise
for indemnification under this subsection in lieu of
directors' liability insurance.
(iv) Indemnification under this subsection includes, but
is not limited to, expenses and fees incurred in defending
any action or proceeding relating to their status as
directors.
(b) Immunity--Notwithstanding any other provision of law to
the contrary, the directors of a special institution shall be
deemed to be Commonwealth employes subject to and for all of the
purposes of 42 Pa.C.S. Ch. 85 (relating to matters affecting
government units). The immunity conferred under this subsection
shall apply to all actions of the directors in accordance with
subsection (a), including actions undertaken in connection with
the organization of the special institution.
(c) Applicability--This section shall apply to all actions
taken as members of the board of directors in accordance with
subsection (a) prior to the effective date of this section.
Section 3. Section 1609(a) and (b) of the act, amended July
6, 1984 (P.L.606, No.125), July 6, 1984 (P.L.621, No.128), July
10, 1986 (P.L.1393, No.119), December 18, 1986 (P.L.1702,
No.205) and December 18, 1990 (P.L.766, No.191), are amended to
read:
Section 1609. Mergers, Consolidations and Conversions of
Savings Banks
(a) Authority to merge, consolidate or convert--
(i) upon compliance with the requirements of sections
1602, 1603, 1604, 1605 and 1606, a savings bank may enter
into a merger or consolidation with one or more other savings
banks. In the event the book value of the total assets of the
acquired savings bank is less than one percent in excess of
the book value of the total liabilities, the resulting
institution may maintain as a branch, any office operated by
the acquired institution.
(ii) upon compliance with the requirements of this
section and other applicable law, one or more savings banks
and one or more associations may merge into a savings bank or
into an association or consolidate into a new savings bank or
a new association. The word "association" in this chapter
shall mean an association subject to the Savings Association
Code of 1967.
(iii) upon compliance with the requirements of this
section and other applicable law,
(A) one or more savings banks, one or more Federal
savings banks and one or more Federal savings and loan
associations may merge into a savings bank, Federal
savings bank or a Federal savings and loan association or
consolidate into a new savings bank, a new Federal
savings bank or a new Federal savings and loan
association,
(B) one or more savings banks may merge or
consolidate with a regional thrift institution, and,
after March 4, 1990, with a foreign thrift institution,
as those terms are defined in and subject to any
applicable limits of section 117, and
(C) a business corporation which owns all of the
issued and outstanding shares of a savings bank may merge
into such savings bank.
(iv) the authority of a savings bank to merge or
consolidate into a Federal savings bank or Federal savings
and loan association shall be subject to the condition that
at the time of the transaction the laws of the United States
shall authorize a Federal savings bank or Federal savings and
loan association to merge or consolidate into a savings bank.
(v) upon compliance with the requirements of this
section and other applicable law,
(A) a savings bank may be converted into an
association,
(B) a savings bank may be converted into a Federal
savings bank or a Federal savings and loan association,
subject to the condition that at the time of the
transaction the laws of the United States shall authorize
a Federal savings bank or a Federal savings and loan
association to convert into a savings bank, or
(C) an association may convert to a savings bank. An
association whose deposits were insured by the
Pennsylvania Savings Association Insurance Corporation
prior to conversion may maintain all existing branches
operating at the time application for conversion is made
if the application is made within ninety days of the
effective date of this subclause.
(vi) upon compliance with the requirements of this
section and other applicable law and subject to the laws of
the United States, a Federal savings bank or a Federal
savings and loan association may be converted into a savings
bank or an association.
(vii) upon compliance with the requirements of this
section, a mutual savings bank may be converted into a stock
savings bank. A stock savings bank shall have authority, upon
compliance with the requirements of this section, to enter
into a merger or consolidation with one or more other stock
savings banks, banks, national banking associations, bank and
trust companies, trust companies or stock savings and loan
associations.
(viii) all mergers, consolidations and conversions in
which the resulting corporation is a savings bank or an
association shall be subject to the approval of the
department.
(b) Requirements for a merger, consolidation or conversion--
The requirements for a merger, consolidation or conversion under
clauses (ii), (iii), (v), (vi) or (vii) of subsection (a) which
must be satisfied by the parties thereto are as follows:
(i) the parties shall adopt a plan stating the method,
terms and conditions of the merger, consolidation or
conversion, including the rights under the plan of the
members, depositors and shareholders, if any, of each of the
parties, and any agreement concerning the merger or
consolidation.
(ii) if the proposed merger, consolidation or conversion
will result in a Federal savings bank, a savings bank, a
Federal savings and loan association or an association,
adoption of the plan by each party thereto shall require the
affirmative vote,
(A) in the case of a mutual savings bank, of at
least two-thirds of the trustees present at a meeting at
which the plan is proposed, and two-thirds of all the
trustees at a subsequent meeting held upon not less than
ten days' notice to all the trustees,
(B) in the case of a stock savings bank, of at least
a majority of the trustees, at a meeting held upon not
less than ten days' notice to all the trustees, and of
the shareholders entitled to cast at least two-thirds of
the votes which all shareholders are entitled to cast
thereon, at a meeting held upon not less than ten days'
notice to all shareholders,
(C) in the case of a Federal savings bank, a Federal
savings and loan association or an association, of two-
thirds of the entire membership of the board of
directors,
(D) in the case of any other party, such vote as is
required by law for merger, consolidation or conversion,
and
(E) in the case of the notice required to be given
to the trustees of a savings bank and to the shareholders
of a stock savings bank shall include a copy or summary
of the plan. The department may require such vote of the
members of an association as it deems proper.
(iii) any modification of a plan which has been adopted
shall be made by any method provided therein, or in the
absence of such provision by the same vote as that required
for adoption.
(iv) if a proposed merger, consolidation or conversion
will result in a savings bank or an association, an
application for the required approval thereof by the
department shall be made in a manner prescribed by the
department. The department may require notice to be given to
such persons as it designates. There shall also be delivered
to the department:
(A) articles of merger, consolidation or conversion,
(B) applicable fees payable to the department in
connection with the articles and with the conduct of the
investigation required by subsection (e),
(C) if the resulting corporation is an association,
any documents or other items required under the Savings
Association Code of 1967.
(D) if the proposed name of the resulting savings
bank or association is not identical with the name of one
of the parties to the plan, evidence of reservation of
such name in the Department of State, and
(E) if there is any modification of the plan at any
time prior to the approval by the department, an
amendment of the application and, if necessary, of the
articles, signed in the same manner as the originals,
setting forth the modification of the plan, the method by
which such modification was adopted and any related
change in the provisions of the articles of merger,
consolidation or conversion.
(v) if a proposed merger, consolidation or conversion
will result in a national banking association, all
requirements of the applicable Federal law shall be met.
* * *
Section 4. The provisions of this act are severable. If any
provision of this act or its application to any person or
circumstance is held invalid, the invalidity shall not affect
other provisions or applications of this act which can be given
effect without the invalid provision or application.
Section 5. This act shall take effect immediately.
APPROVED--The 16th day of June, A. D. 1994.
ROBERT P. CASEY
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